Can you access your super fund for medical procedures?
Category : Practice Updates
Editor: The following relates to a newspaper article that appeared recently in a national newspaper and was then subsequently picked up by national TV and radio.
As it concerns a taxpayer withdrawing all of her $30,000 balance from her superannuation fund for weight loss, a tummy tuck and breast implants, clients who heard about it or saw it on TV may be incorrectly contemplating accessing their super.
Compassionate grounds to withdraw superannuation
The taxpayer involved suffered from obesity. On this basis, she obtained a written statement from her medical practitioner in which it was argued that without this stomach reduction procedure, it was likely that she would experience severe ill health that could possibly be a life threatening condition.
However, applications for early release of superannuation on medical grounds:
- must be approved by the Department of Human Services (DHS); and
- applicants need to supply letters from their GP and a specialist certifying that their condition is life threatening, and provide proof that expenses cannot be met by other means, including savings.
The taxpayer said that given her family history of diabetes, cancer and hypertension, her case met the criteria.
Breast implants and tummy tuck?
However, the taxpayer apparently made a second withdrawal (of approximately $20,000) from her superannuation fund to pay for breast implants and a tummy tuck.
Editor: Clients need to understand that there are only very limited circumstances under which superannuation monies can be withdrawn to pay for a medical procedure, under the umbrella of ‘compassionate grounds’.
When can super monies be released on ‘compassionate grounds’
Where an SMSF member is suffering a severe medical condition and cannot afford to pay for such medical expenses, they can apply to the DHS (not the ATO) to have some of their super funds released on ‘compassionate grounds’.
Basically, a member will be entitled to claim ‘compassionate grounds’ where:
- the medical treatment (which is not readily accessible through the public health system) is necessary to treat a life threatening condition, to alleviate acute or chronic pain, or to alleviate an acute or chronic mental disturbance/illness; and
- two registered medical practitioners (one of whom is a specialist) have certified that the above requirements have been satisfied.
Editor: However, there are many other issues involved, including significant penalties where funds are withdrawn incorrectly, so clients should contact our office before trying to withdraw any funds from their superannuation fund.