Aussies accessing compassionate release of super climbs to $1.4 billion

• The total value of Australians accessing their super early on compassionate grounds has risen 2 per cent, to a total value of $1.4 billion.
• The new data, compiled by the ATO, found that while the value of superannuation accessed had risen, the total number of applications had fallen by 5 per cent.
• The tax office has warned that accessing super early was strictly a “last resort.”

Australians are being warned of predatory schemes that allow vulnerable workers to access their super early, as the value of super released hits 10 figures.

New data from the Australian Tax Office (ATO) revealed that in FY2025-26, the total value of super released early on compassionate grounds rose 2 per cent to $1.4 billion, when compared with the previous financial year.

That was despite the total number of applications for early release of super dropping by 5 per cent.

ATO Deputy Commissioner Ben Kelly said the tax office was becoming increasingly concerned that bodies in the health industry were using “predatory” tactics to entice vulnerable workers to access 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 said the tax office flagged a concerning trend: dentists urging Australians to access their super early to pay for purely cosmetic work.

“A concerning trend we’re seeing is business arrangements that target and pressure people to access their super to pay for certain procedures,” he said.

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

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“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.”

Justin Untersteiner, CEO of the Australian Health Practitioner Regulation Agency (AHPRA), said registered medical officials should never put profit before their patients’ needs.

“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,” he said.

“Practitioners should know that putting profits before patients is not only unsafe – it could cost them their right to practise.

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

What is considered compassionate grounds for early access to superannuation?

Superannuation is a tightly held asset class in Australia, and any early release must tick a number of boxes.

Currently, there are five conditions you must meet to access your super early on compassionate grounds:

• You must be a citizen or a permanent resident
• The expense must be eligible
• The expense cannot be already paid, or being paid off
• You cannot pay the expense by any other means other than your super.
• You have all the required evidence at hand.

So what then is considered an “eligible expense”?

According to the ATO, eligible expenses include things such as:

• Medical treatment for you or your dependant.
• Medical transport for you or your dependant.
• Modifying your home or vehicle to accommodate special needs arising from your or your dependant’s severe disability.
• Palliative care for you or your dependant’s terminal illness.
• Death, funeral or burial expenses for your dependant.
• Preventing foreclosure or the forced sale of your home.

The ATO stresses that early access cannot be granted to pay for day-to-day expenses, even in hardship conditions.

There are some other factors that may allow somebody to access their super early, including being diagnosed with a terminal illness.

Accessing super early carries grave implications long-term. The Super Members Council estimates that if a 30-year-old were to withdraw $20,000 from their super today, it would cost them approximately $90,000 by the time they reach retirement age.