Retirement
‘Explosion’ in early access requests for weight-loss
More Australians are asking to use their superannuation for weight-loss surgeries, in what a major super body is calling an “explosion”.
‘Explosion’ in early access requests for weight-loss
More Australians are asking to use their superannuation for weight-loss surgeries, in what a major super body is calling an “explosion”.
Speaking at the SMSF Association National Conference yesterday, the SMSF Association’s head of policy Jordan George said one of the association’s key interests in 2017 was the applications of early-release.
Mr George said they are currently still concerned with the growing instances of early release for medical procedures, and highlighted the prevalence of surgeons’ websites actually informing potential patients that super could be used.
“There's been an explosion in the amount of people who are accessing super early to fund medical procedures, mainly weight-loss surgery,” he said.
“You can do a quick Google search and find a number of surgeons who have on their web-page: ‘Access your super to pay for this.’ It doesn't say if you can't afford this and you need a life-saving procedure - which is what the law says - then you can access your super,” he continued.
“They just say: access your super to pay for this and we think that's something that the law needs to tighten up there.”
BT also expressed concern over loose early-release provisions. Speaking at the same conference, BT general manager of superannuation, Melinda Howes said that while there will always be a place for early-access to meet worthy needs, superannuation should ultimately be “quarantined” for retirement.
She said calls to extend early release for elective, non-critical health issues raises concerns.
“The system already has in-built provisions for access in special circumstances including for compassionate grounds and hardship, and these are assessed on a case-by-case basis. But calls to use super which go beyond this, which are for discretionary uses, will only muddy the waters and confuse super’s core purpose,” Ms Howes said.
“This is heightened by the fact that Australians are ageing and living longer than ever before. If the gates to access super are opened for other matters, this will potentially leave Australians worse off in the longer term,” she added.
Early access for domestic violence victims
While early access on medical grounds remains contentious, the SMSF Association and the Association of Superannuation Funds of Australia (ASFA) are more welcoming of early access for victims of domestic violence.
Mr George said yesterday that early access should be principles-based and if there was an authentic case of hardship, need and lack of financial capacity then early release should be considered.
In instances of domestic violence, he said it would give victims the financial resources to escape the relationship.
ASFA CEO Dr Martin Fahy agreed. Commenting on ASFA’s submission to Treasury in support of early release for domestic violence victims, he said: “Domestic violence is a significant issue in the community, so providing access to funds at such a critical time can make a real difference for victims seeking to escape the cycle of violence.”
In its submission, ASFA said that if someone had accessed domestic violence support services then they should also be able to apply for early release.
The question of provisions for early release has been in the spotlight recently, with early release for renters behind on payments and victims of violent crime also touted as potential beneficiaries in a Treasury consultation paper released last December.
In the consultation's foreword, Minister for Revenue and Financial Services Kelly O’Dwyer said that she looks forward to “working with stakeholders to ensure that the rules governing early release of superannuation benefits remain fit for purpose.”
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