Uninsured Aussies raiding super to pay medical bills

The rules for access to super haven’t changed in 20 years.

But figures show that last year alone, 15,000 people used $200 million in retirement savings to pay medical bills – more than half for weight loss procedures.

Financial Services Minister and Acting Treasurer Kelly O’Dwyer has initiated a review of the early access rules after evidence of a significant increase in the number of people tapping their superannuation on supposed compassionate grounds

2 ways to save on Health Insurance:

The AMA supports the limited use of savings, but under strict guidelines.

“There are grossly inadequate bariatric services in our hospitals, so people are told there’s no alternative, they don’t have private health insurance are choosing to raid their super” says Michael Gannon

Savings can be accessed on compassionate grounds, or for financial hardships.

Labor’s Tanya Plibersek says “the fact that we see people reaching deeper and deeper into their superannuation for medical expenses is an indictment on the health funding cuts of the federal government.”

The Acting Treasurer says she wants to make sure the balance is right.

“We want to make sure that people get access to their money where it is appropriate but we strike the right balance, that we make sure we are protecting peoples retirement incomes because at the end of the day that’s money they are going to need,” Kelly O’Dwyer said.

The Financial Planning Association estimates a person in their 40s accessing $10,000 dollars would lose more than $42,000 in retirement savings over 20 years.

For someone in their 30s who used $10,000, it’d mean $180,000 less.

One member of the public interviewed by 9 News said: “I think it’s too risky – you end up with nothing when you retire.”

But another said: “If they haven’t got the money to pay for it, yeah they should have access.”

All this will be included in the consultation process as part of the treasury review with recommendations due early this year.