Call to ban predatory ads pushing super withdrawals for non-essential medical and dental procedures
The Super Members Council has stepped up its call for a ban on predatory advertising that encourages early super withdrawals for non-essential medical and dental services, after two major regulators warned Australians are still being targeted by businesses seeking to profit from vulnerable people draining their retirement savings.
“The scale of continuing financial harm being inflicted on vulnerable Australians by predatory advertisements promoting these services should be a wake-up call to lawmakers,” said the Council’s CEO Misha Schubert.
“As a start, Parliament should urgently ban predatory ads that promote early withdrawal of super for non-essential treatments and stop third parties from taking a cut of your super to fill out the forms.”
The Australian Taxation Office today revealed it has commenced more than 160 reviews and audits since 1 July 2025 into potentially false or misleading statements in compassionate release applications or medical reports, imposing more than $1.5 million in penalties.
Compassionate early access to super is designed to be a last‑resort safety net for people facing critical, urgent or life-threatening medical needs — not a funding source for elective or non‑essential procedures.
While the number of approved applications fell 5 per cent last year, the dollar amount of super approved for release rose 2 per cent to more than $1.4 billion.
The ATO and Australian Health Practitioner Regulation Agency have issued a fresh warning about predatory sales tactics. It identifies red flags including social media and internet advertising of high-cost treatments, business arrangements that pressure people to access their super, short online consultations, and templates designed to streamline applications.
Ms Schubert said the regulators’ warnings were welcome and reinforced an urgent need to shut down predatory business models built around encouraging Australians to raid their retirement savings.
“Businesses should not be allowed to profit from pushing vulnerable Australians into withdrawing their retirement savings early to fund non-essential dental and medical treatments,” Ms Schubert said.
“Compassionate release is an important safety net, but it must always have very strong safeguards to protect Australians retirement savings. It should never be able to be used as a sales tactic or a business model.”
Withdrawing super early can cost workers tens of thousands of dollars by retirement, even for relatively modest amounts taken out earlier in life, increasing people’s financial stress, seriously eroding their retirement income, and placing more pressure on the Age Pension.
Super Members Council analysis shows someone who withdraws $20,000 from their super at 30 for a non-essential dental or medical procedure could be $93,000 poorer at retirement due to lost compound returns.
The Council renewed its call for stronger consumer protections around compassionate release of super, including:
- banning advertising that promotes early access to super for non-essential medical or dental treatments
- banning third parties from charging consumers fees simply to facilitate or fill out compassionate release applications
- stronger, clearer warnings about the long-term impact of early withdrawals on retirement savings.