Australians Withdraw Billions from Retirement Funds for Medical Expenses

Australians accessed approximately $1.46 billion from their retirement savings for medical expenses during the 2025-26 financial year, marking a 220% increase since 2018-19[7].

This growing reliance on superannuation to cover healthcare costs raises concerns about the long-term financial security for many, as early withdrawals significantly diminish savings, reduce compound earnings, and affect insurance coverage[3][5]. Women are disproportionately affected, potentially exacerbating existing gender gaps in retirement savings[10].

What the records show

In the 2025-26 financial year, about $1.42 billion was specifically released for medical treatment or transport[2]. The preceding year, 2024-25, saw over $1.4 billion withdrawn for compassionate reasons[6]. Dental treatment alone accounted for $817.6 million, or 58% of the $1.416 billion approved for early super access on compassionate grounds in 2024-25, with an average withdrawal of $24,889[6]. A 30-year-old withdrawing this average dental amount could have $85,906 less in their super by age 67, according to financial modeling[5]. The Australian Taxation Office (ATO) and the Australian Health Practitioner Regulation Agency (Ahpra) have expressed strong concerns over “predatory sales tactics” and “inappropriate conduct” by some health practitioners and third-party facilitators[1][8]. Early access is permitted for specific medical treatments and transport only if other financial options are exhausted, requiring supporting documentation including medical reports[11].

The timeline

Since 2018-19, early release of superannuation for compassionate reasons, primarily medical, has increased by approximately 220%[7]. Dental expenses accounted for $108.2 million in 2020-21, making up about 23% of such withdrawals[6]. By 2024-25, dental treatment represented 58% of approved compassionate withdrawals[6]. More than 34,000 women accessed their funds in 2024-25[10]. Since July 1, 2025, the ATO has initiated over 160 reviews and audits, imposing penalties exceeding $1.5 million for false statements in applications or medical reports[8].

What changed and for whom

The surge in early superannuation withdrawals, particularly for dental work, impacts individuals’ retirement savings and potential compound earnings[3][6]. This trend places a greater burden on women, who generally retire with less superannuation than men[10]. Both the ATO and Ahpra have responded by issuing guidance for health practitioners and increasing enforcement actions against what they describe as predatory practices[1][8].

What the subject has said publicly

Justin Untersteiner, Ahpra’s Chief Executive, stated the agency is concerned about “predatory sales tactics that use social media and internet advertising to attract patients for high-cost treatments they do not need or cannot afford”[1]. He advised, “Registered health practitioners should never put profits ahead of patients”[1]. Emma Rosenzweig, ATO Deputy Commissioner, emphasized, “compassionate release of super should only be considered as a last resort” and observed “practitioners making inaccurate statements in medical reports”[4].

What we could not confirm

We could not confirm the exact number of individuals who faced financial hardship or bankruptcy before accessing their superannuation early. We also could not confirm how many of the treatments funded by early super withdrawals were genuinely essential versus elective, beyond the regulators’ allegations of some non-essential procedures. The specific impact of the new regulatory guidance on the reduction of predatory sales tactics remains unquantified.