ATO sets sights on 'predatory practices' to access super

The Australian Taxation Office (ATO) noted there has been a decrease in compassionate release of super, which it said was promising, however it remains concerned about predatory practices from health practitioners attempting to access super for financial gain.

The ATO has released new data showing the number of applications approved for the compassionate release of super decreased by 5%, following an aggressive surge for dental and IVF treatments in FY25.

This year, the ATO ramped up its compliance activities, targeting individuals, health practitioners and third-party facilitators who promote access schemes, and conducted over 160 reviews since 1 July 2025, imposing penalties of over $1.5 million.

However, while application volumes have declined, the total value approved increased by 2% to over $1.4 billion, the ATO said.

Commenting, ATO deputy commissioner Ben Kelly said it was important individuals understand the immediate tax consequences of accessing their super early.

"Australians need to remember that super is there to set you up for retirement and there are strict and limited situations where people need to access their super early to pay for critical medical procedures," Kelly said.

"Our message to individuals and medical practitioners is clear - compassionate release of super should only be considered as a last resort, where all other options of paying for the eligible expenses have been exhausted."

Kelly is also observing the trend where business arrangements target and pressure people to access their super to pay for certain procedures.

"These arrangements include short online consultations and the use of templates designed to streamline the process for people to access their super," he continued.

"People should be very cautious of advertisements that promote early access to super. Taking the time to understand the risks and notice the red flags can help avoid decisions that could significantly impact your retirement savings or result in penalties.

"We will continue to take strong action against third party facilitators who seek to exploit or undermine the system, protecting its integrity for those who need it most."

The ATO has been working with the Australian Health Practitioner Regulation Agency (Ahpra) to ensure applications to pay for health-related expenses are appropriate and do not take advantage of vulnerable people.

Ahpra chiefexecutive Justin Untersteiner said registered health practitioners should never put profits ahead of patients.

"We are concerned by predatory sales tactics that use social media and internet advertising to attract patients for high-cost treatments they do not need or cannot afford," Untersteiner said.

In addition, Ahpra proactively monitors practitioners to ensure they are meeting their professional obligations.

"Practitioners should know that putting profits before patients is not only unsafe - it could cost them their right to practise," Untersteiner said

"Most practitioners do the right thing, and we welcome any signs that inappropriate use of superannuation is decreasing."