Dr Rachel David calls for action to keep retirement savings safe

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Private Healthcare Australia CEO Dr Rachel David says the Australian Government’s plan to tighten the definition of superannuation is a much-needed change that will keep retirement savings safe and help protect vulnerable Australians.

Few would argue that things have been tougher than expected for the majority of Australians over the past few years. We’ve learned to live with COVID, but many families are still facing economic hardship due to cost of living pressures, inflation and rising interest rates.

Since the start of the pandemic and the Morrison Government’s decision to allow people under financial stress to withdraw up to $20,000 from their superannuation, government has identified a growing trend of consumers using their superannuation to fund none emergency surgery.

Accessing super for urgent medical procedures is not new, but the proliferation of unregulated commercial operators purporting to help people write applications to release their superannuation funds to pay often exorbitant medical costs, is.

These companies advertise in the waiting rooms of “less scrupulous” medical practitioners. Some of this material is even finding its way into doctors’ rooms. People seeking medical care are vulnerable and can be affected by physical or emotional pain. They are being taken advantage of and have little recourse if the procedure fails or there are complications. Surely, this practice warrants an investigation by financial regulators.

A quick Google search for ‘can I withdraw my super for X surgery’ reveals dozens of surgery clinics and ‘financial services’ advertising assistance to withdraw superannuation for cosmetic surgery, bariatric (weight loss) surgery, spinal surgery, IVF, dental work, orthopaedics and other procedures.

This issue is drawing a lot of political attention and media commentary, but the fact remains - compulsory superannuation exists to provide a retirement income for Australians, not to fund medical procedures, some of which have unclear value and no proven benefit whatsoever.

Not only does this practice come with high financial risks for consumers particularly if they need to pay hefty fees when medical complications emerge - it is also causing inflation in medical out of pocket costs which can impact across the sector.

Private Healthcare Australia is therefore backing the Albanese Government’s plan to tighten the definition of superannuation. Rather than being a “super grab by stealth” as some describe, it will actually help to protect vulnerable Australians from being coerced by unscrupulous middlemen into accessing superannuation to fund medical procedures.

There are alternatives. Private health insurance is a better option for people with chronic illness or at risk of complications. But not everyone can afford to have private cover. Patients should talk to their doctor about alternative ways to seek out ‘self-pay’ surgery as well as go on a waiting list. Going down the superannuation path is high risk and riddled with obstacles - if it goes wrong, your money’s gone and you’ve lost all your retirement savings.