Update on Super for Surgery: Changes to Application for Early Withdrawal of Super (early Superannuation release) via the ATO.
Did you know there’s a new application process for early super release or early withdrawal of Superannuation in Australia, for medical reasons such as medically-indicated surgery? Formerly, patients would apply through the Department of Human Services (DHS). But effective 1 July 2018, a new application process for early withdrawal of Super for medical reasons was put in place. To apply for early release of Super in Australia, you must NOW apply through the ATO – not the DHS.
Early Super Withdrawal in Australia for Medical Reasons/Surgery: Originally published Jan 2018 and updated in October 2018.
Helpful LINKS for application processes for early withdrawal of Super Fund for Surgery or other medical reasons.
- When you apply through the ATO, the application process can take 14 days.
- You will usually need extensive paperwork and photographic demonstrations.
- In many cases, you will be applying for either medical necessity reasons or for financial hardship.
- Reports from at least two medical practitioners or Surgeons must agree Surgery is medically indicated.
- You will apply for early super withdrawal directly from your MYGOV account.
- Your MYGOV account will keep you up to date (if you don’t yet have one, you’ll need to create one).
Link for early super withdrawal applications and information (updated October 2018):
Apply for Super through the ATO (or copy and paste this link text into your browser) https://www.ato.gov.au/forms/application-for-payment-of-ato-held-superannuation-money/
FAQ about early withdrawal of Super for Surgery
Am I guaranteed to get early withdrawal approved for medical reasons or surgery?
- No, there is no guarantee.
- It depends on your individual case and circumstance.
- You will be required to apply through the ATO and to provide extensive documentation and affirmation of your needs and surgical requirements.
How long does the process take when you apply for early Super withdrawal?
- It depends on how much information you have on hand, including medical/surgery or doctor reports, financial statements, and more.
- Allow at least 2-3 hours to complete the application online – or longer if you don’t have a MYGOV account yet, or your paperwork, photographs and documentation in order.
- Once you submit your application to the ATO for early release, a decision will be made by the ATO within about 14 days – you’ll be kept up to date via your MYGOV account.
- If approved for early release, you will then need to send the forms to your Super Fund.
- Allow at least 4 to 8 weeks for the entire process, longer if medical scans and other reports are needed or if there is a delay in processing.
Tax Implications and Impacts for Early Withdrawal of Super Funds for Surgery
What kind of tax rate will I incur if I am granted early withdrawal of Super fund monies to pay for my Surgery?
- While you may be able to gain access to your Super for medically-needed Surgery, there are, however, TAX implications.
- It may depend on your marginal tax rate as well as your PRESERVATION age (discussed further below).
- This can be a marginal tax rate or much higher, depending on numerous factors.
- Read more about ATO tax rates and Preservation Ages for early superannuation withdrawal.
- Another implication is your ultimate RETIREMENT funding for Superannuation.
- So in addition to more instantaneous tax implications, early super withdrawal can have implications on your financial stability in later life.
Media Stories: Using Super for Surgery (in the news):
Recent news stories have highlighted that some patients are using early withdrawal of their Super Fund assets for life changing surgery. It’s not a large proportion of patients but early withdrawal requests for Super for Surgery are commonly used for the following Surgery procedures.
- But the application process for early withdrawal of Superannuation has recently changed.
- You no longer apply through the DHS for early release of Super on compassionate grounds (e.g. for plastic surgery) but through your MyGov account and the ATO’s office.
Key changes to Application Processes for Early Withdrawal of Surgery for Surgery
Previously, you could apply for early release of your Super for Surgery and other Medical procedures, on compassionate grounds, from the DHS website.
This is now a function of the ATO – via your MyGov account.
Superannuation Changes as of July 2018:
- You now apply through the ATO instead of the DHS site.
- You’ll need to log in to your MyGov account.
- Be sure you use a very secure password on your MyGov account.
- They will likely require a 2-part verification process for you to log in (have your phone handy).
- Read more about medical GROUNDS for early release of Super.
- Recognise that information may be subject to sudden changes – verify these details on the ATO site or with your Superfund.
Early Release of Superannuation – Surgery and Compassionate Grounds
Criteria for Early Release of Super for Compassionate Reasons such as Medical Needs including Plastic Surgery – Reports Required and Photographic Evidence along with your Application
- Criteria for early release of Super for surgery or other medical procedures have also changed in 2018.
- Criteria for super withdrawal appear to be more restrictive and require more documentation, reports and photographic evidence.
- about which types of medical procedures qualifies as necessary and which does not, and other reasons for early Super release on compassionate grounds have been simplified (see Table, below, excerpted from the ATO website).
- Procedures that reduce chronic pain may still qualify (e.g., Breast Reduction) but it may depend on your condition, your application process, your super and your income status, and other reasons for requesting early release of Superannuation for surgery.
- There is no guarantee you will be able to withdraw your super for surgery and often, it rests with not only the ATO but the actual Superfund may be able to deny or approve a recommendation for early release.
- This is subject to change.
Super Preservation Age and Tax implications of early withdrawal – something to consider.
If you request early release of your SUPER, you WILL be taxed on that income in that year.
It’s typically taxed at a higher rate and can change your annual income tax bracket; but it depends on marginal tax rates and other assessments.
- Tax rates on early super withdrawals may depend on your preservation age which rests on your date of birth.
- Find out what Preservation Age and Super Withdrawal means.
Some patients were not aware that early withdrawal of SUPER impacts their taxes and must be declared as income in the year it is released.
How TAX applies to SUPER or to EARLY RELEASE OF SUPER:
How were consumers and Taxpayers notified of these changes?
- Many news releases and media discussions occurred in relation to the new ATO application for early withdrawal of SUPER versus the prior application process through the DHS.
- Excerpt from the ATO website: “The compassionate release program will transfer from the Department of Human Services (DHS) to the ATO from 1 July 2018. If you need to apply prior to 30 June 2018, visit DHS – Early release of superannuation.”
- From 1 July 2018, you can apply for compassionate release of superannuation online. If you live outside Australia and are unable to apply online, contact the ATO to request an application form.
How to log in to your MyGov account (Australia) to apply for early Super release.
- Click here to access your MYGOV account.
- Read about normal guidelines or rules, preservation ages and retirement ACCESS to Super.
- Visit the ATO webpages for EARLY SUPER WITHDRAWAL.
Previous Ways Patients Accessed Super for Plastic Surgery or Weight Loss Surgery
Patients were using Super for Surgery for life-changing and life-enhancing surgical procedures. But this option is steadily changing; and you may lose access to Early Superannuation Withdrawal for important surgery procedures including Rhinoplasty, Breast Reduction or excess skin reduction after weight loss.
- Requests for early Super release for Surgery were typically made on compassionate grounds and are being used to address chronic and/or life-threatening health conditions.
- But they are also used for life enhancing surgeries, such as where chronic pain existed as is the case for women seeking breast reduction procedures. The argument has been that quality of life impacts overall health, well-being and longevity and that SUPER is no good to people who are no longer alive due to a condition such as obesity, which could be treated effectively with Weight Loss Surgery funded by Super Withdrawals (in the past).
Pre-2018 – Surgeries some individuals were PREVIOUSLY able to access early withdrawal of their Superannuation funds on compassionate grounds included:
- Bariatric Weight Loss Surgery (Gastric Band/Lap band, Gastric Sleeve, Gastric Bypass)
- Breast Reduction Surgery (Reduction Mammoplasty)
- Reconstructive Surgery (such as used to correct a facial deformity, reconstruct a breast after cancer or correct the appearance after an injury)
- Skin Reduction Surgery after Weight Loss (reduction of skin folds or repair of abdominal hernias)
- Rhinoplasty (Corrective Nose Surgery after Injury or to repair a deviated septum or broken nose)
- Dental Surgery
- Orthopaedic Surgery (bone surgery)
Super was ALSO being accessed early to fund IVF treatments for couples struggling with infertility.
- Many couples have also been accessing Super via early release / early Super withdrawal applications (Superannuation) to help pay for costly infertility treatments.
- These treatments involve high costs over extensive periods of time.
- This also is changing especially as success rates of IVF are more unpredictable or less robust than many couples who use IVF are led to believe.
- Only ONE IVF cycle is available per application (you can’t apply for early Super release for a series of IVF treatments or multiple IVF procedures – only one at a time).
More information is shown below on Australian trends in increases in patient requests to use Super for Surgery.
But recent government changes to Early Withdrawal Application processes for Early Super Release for medical procedures indicate you MAY no longer find accessing Super for Surgery a viable option for anything but life-saving surgery such as cancer treatments or heart surgery.
Do you have enough Super?
Be sure you ask a financial advisor for information before you decide to access Super for surgery.
Is it difficult or easy to access your Super to pay for surgery?
Application Processes, Super Funds and the ATO – documentation required
- It is NOT easy or guaranteed to be granted early access to your Superannuation.
- There are very limited circumstances when you can ACCESS your super before your preservation age.
- These circumstances are mainly related to specific medical conditions or severe financial hardship.
- Your super fund may also deny an application depending on their rules or decisions (some patients then appeal).
- There are significant tax implications for some patients who access Superannuation EARLY to pay for surgery.
What are the compassionate grounds for early super release? (Excerpt from ATO website)
Eligible circumstances for compassionate release of superannuation (accessed online on 18/10/2018)
“There are specific circumstances for requesting early release of super on compassionate grounds. These are:
Why do patients seek early withdrawal of Super for Surgery?
- One of the most notable areas of patients wanting to use Super Fund resources for life-changing surgery relates to the problem of Obesity in Australia.
- Sadly, the current Medicare health system does not cover a surgical weight loss treatment for this chronic disease. And not all patients have Private Health Cover. Even if they do, there is typically a gap that can be in the thousands of dollars.
In the case of the recurring problem of obesity and the effective treatment option of weight loss Surgery, many patients are left to fund their own surgery procedures, which can be very costly.
In cases like Obesity and weight loss surgery, patients have been known to request early withdrawal of Super Fund / Superannuation resources to have this surgery. The scenario is that, for many patients who struggle with chronic Obesity, their lives would be cut short, without an effective treatment such as weight loss surgery.
A number of patients would simply not live long enough to use their Super anyway unless they first overcome the problems associated with chronic Obesity, that hasn’t been resolved by non-surgical approaches.
Using SUPER for Surgery: More on surgery that people may be able to use their Super Fund resources to fund.
- Weight Loss Surgery to reduce obesity and life-threatening health conditions (Gastric Sleeve, Gastric Bypass, Lap band or Gastric Balloon can help reduce cardiovascular risks and diabetes)
- Skin reduction surgery of redundant skin tissues to help return body contours after significant weight loss has occurred
- Breast Reduction Surgery or Reconstructive Breast Surgery (such as Breast Lift Surgery) to reduce back pain, shoulder pain or neck pain
- Abdominoplasty (Tummy Tuck) surgery to repair torn abs to strengthen the core abdominal muscles linked with back pain and urinary incontinence (e.g. to repair parts of the body damaged during pregnancy or childbirth or other abdominal traumas)
- Corrective Rhinoplasty after a nose injury or to repair a deviated septum interfering with proper breathing
- Blepharoplasty (Eyelid Lift Surgery) when sagging eyelids are impeding vision
- Male Breast Reduction for Gynaecomastia
- Infertility (helping to fund IVF treatments for couples who find themselves unable to get pregnant)
What percentage of APPLICATIONS for early super release get approved?
- This statistic is likely to change.
- It can also vary depending on who is applying and for which reasons.
Early Requests for Super Fund Access for Surgery – Past History – changing in 2018.
Should you investigate the possibility of using Super for Surgery? Each individual must decide on their own and it often is a last resort for most patients. Also, whilst it is possible for some patients to gain early release for surgery, not everyone who applies will be able to gain early access to their super funds in Australia – even if they have compelling reasons for wanting to use their Super for life-changing surgery.
How much SUPER is being released Early in Australia?
Here’s the history of recent requests for early release of Super for Surgery (Source: Department of Human Services) but future applications need to go through the ATO as listed above.
- In the year ending 2016, over $204 million Australian dollars were approved for early release from Super Funds.
- This appears to have covered a variety of reasons, including medical costs and surgery costs, increased costs of living, financial disruptions or the current housing cost crisis.
How DO patients typically pay for their Plastic Surgery procedures?
- Again, requests for early release of Super for Surgery are not as common as the news stories would have you believe, although request have increased lately in a changing economy and a more obese population requiring weight loss surgery.
- Options for paying for desired plastic or cosmetic surgery generally include:
- Savings Accounts
- Credit Cards or Family Loans
- Gifts, Divorce Settlements or Inheritance Funds
- Pre-paying on a house mortgage as a form of Savings that can also reduce interest temporarily as you save up for surgery
- Early withdrawal requests of Super Funds based on compassionate grounds.
- It is important to do your homework and get professional financial advice on any of these options for your financial savvy and well-being.
- It’s also crucial to recognise that early withdrawal of Super for Surgery payment methods is always up to each individual Super Fund administrator AND that it has TAX implications and FUTURE retirement funding implications.
For other types of rebates or funds for surgery, such as Medicare or Health Insurance for Plastic Surgery, certain criteria may also apply.
Getting payment method advice is a great idea before embarking on any of these options for Surgery.
- Sometimes, Medicare and/or your Health Funds will also contribute a small portion to the cost of certain corrective surgeries (but not Cosmetic Surgery).
- Phone the Patient Care Team on 0388491444 or 1800033333 OR contact your private Health Insurance Fund if you have questions about eligibility requirements.
- For Medicare Rebates for Corrective Surgery after pregnancy, for example, there are specific criteria for how old your children need to be BEFORE you qualify for any rebates on Abdominoplasty or Breast Reduction, for example.
- Medicare is also changing criteria and rebate eligibility in 2018 (November 2018) – read about medicare rebates, health fund hospital coverage and plastic surgery changes here.
- Other conditions that may qualify for minor rebates often need GP or Specialist evaluations, such as vision problems relating to sagging upper eyelids (requiring Corrective Eyelid Surgery known as an Upper Blepharoplasty) or repairing a damaged nose or deviated septum with Rhinoplasty.
- But these are changing also as of 1 November 2018. Stay up to date on changes to Medicare by reading our top-rated Plastic Surgery blog and signing up for our e-newsletters.
But Medicare rebates and Health Fund Rebates are subject to change without notice; so plan ahead if you want to take advantage of any current eligibility for minor rebates.
Here are several reasons why our blogging team believes it’s important for patients with recurrent health problems to be able to request early access for Super to Pay for Surgery (when they have no other means to attain the surgery they require).
Common Reasons for early Super release requests for Plastic Surgery.
They want to be able to afford quality Australian Surgical Care – and good surgery performed in a top hospital doesn’t come cheap.
- Care standards & surgery safety precautions in Australian Hospitals are typically very high.
- Costs may also be higher as hospital theatre costs in Australia reflect many factors required to run a quality, safety-first facility with patient safety foremost in mind.
The rise in overseas medical tourism – including the consequential costs to Australia’s health care system due to many cases of botched cosmetic surgery performed overseas at cheap rates – may partially relate to the fact that people requiring surgery may have limited funds.
So some patients choose cheap or discounted surgery options with less qualified doctors or unknown medical doctors in foreign countries.
But overseas medical tourism can readily backfire, leading to disfigurement, psychological distress and the need for revision surgery (which is very expensive) and ongoing medical help. There is usually no easy way to seek recourse or revision from the original doctor, plus, not all surgical errors by less experienced Surgeon’s can be fixed.
Increased risks of medical tourism and surgery performed with unknown surgeons highlights the heightened risks. Our Patient Care Coordinators regularly receive calls from desperate patients who want revision surgery – but some things simply can’t be fixed.
Obesity: Weight Loss Surgery Saves Patient’s Lives
- Sometimes, as in the case of Obesity and Weight Loss Surgery, the patient’s life is actually at risk.
- Obesity has many components – including misfiring brain synapses that prevent a person from burning body fat the way that others do.
- Without some form of change to their condition, such as via Bariatric surgery, a person suffering ongoing Obesity has a high risk of developing numerous chronic diseases that can lead to disability and an early death.
- So some patients who need weight loss surgery and post-weight loss body contouring (skin reduction) are using early release of their Super for surgery.
Skin Folds: Body Contouring After Weight Loss to Reduce Redundant Skin Folds that are causing problems and social discomfort
- After losing weight through lifestyle changes or dietary changes, formerly heavy patients often have skin laxity (extra folds of loose skin).
- This excess skin causes recurrent skin infections for some patients as well as chaffing, social discomfort and back pain.
- Having excess skin folds after weight loss also impedes a person’s ability to exercise comfortably.
- So despite losing weight, the over-stretched skin that remains can still impinge on their ability to participate in cardiovascular exercises and to stay fit after losing weight after getting a Gastric Sleeve, Gastric Bypass, Lapband or Gastric Balloon procedure.
Large Breasts Causing Neck Pain and Back Pain: Breast Reduction Surgery can reduce physical pain and chronic skin conditions
- Women who have heavy, large breasts are often plagued with a variety of problems, from balance problems to posture issues to back pain, neck pain and shoulder pain.
- But there’s also the skin issues of chaffing or bra-strap dig ins and social discomfort.
- Pendulous (low hanging) heavy breast tissues are also a problem.
- Social, psychological and physical well being are all readily improved for most patients who choose Breast Reduction Surgery with a good Surgeon (it’s a highly complex procedure so you really want to get it right the first time).
Diastasis Recti (Separated, damaged Abdominal Muscles after pregnancy), Hernias and Skin Folds
- Pregnancy and weight loss often leave redundant, sagging skin and a very changed abdominal region for Mums.
- For some patients, there is a LOT of extra skin. Skin folds and abdominal area sagging leave patients vulnerable to recurring skin infections as well as chafing.
- This excess abdominal area fat, skin and weight also affects metabolism, mood and social well-being.
- For some women, depression about their changed bodies leads to diminished quality of life; whereas the right surgery at the right time, with a caring Plastic Surgeon, can make a major difference for them in numerous areas of their lives. Read our blogs about Diastasis Recti or the Abdominoplasty (Tummy Tuck) pages can provide information.
- Or phone (03) 8849 1444 or 1800033333 and ask for a downloadable e-book Guide to Tummy Tuck Surgery (Abdominoplasty).
- We are a sporting country, and as such, accidents are common.
- Noses get injured or broken and deviated septums are more common than people realise.
- Plus, some people are born with disproportionate nose sizes or shapes that leave them feeling less attractive or less balanced in terms of facial proportions.
- To correct breathing problems or provide a cosmetic enhancement, a well-executed “nose job” surgery procedure (Rhinoplasty surgery) for men or women can really help.
- Nose reshaping surgery is very complex, however, and can be costly to get a good Surgeon who can provide a satisfying surgical outcome. (Revision requests after Rhinoplasty are common, unfortunately, and many less experienced Surgeons can get this Surgery extremely wrong).
Eyelid Surgery to rectify Vision Impairment Caused by the sagging position of the ageing or injury-impacted eyelid
- Ageing eyelids can sag or droop to the point they are impeding on your field of vision.
- When seeing clearly out of your eyes is made difficult due to sagging eyelid skin that covers some of your pupils, you may be eligible for a minor Medicare rebate on an Eyelid lift procedure (Blepharoplasty) (or a Health Fund rebate if you have private coverage).
- Criteria apply and evaluations, paperwork and reporting are a must.
- Eligibility and Medicare codes may be changed or removed effective November 2018 or 2019 depending on the Budget and Medicare criteria reviews.
- Please note: these types of rebates do NOT apply to patients wanting cosmetic enhancements to their eye area and who’s vision is not impacted.
Male Breast Reduction for Gynaecomastia
- Some men – many men in fact – develop puffy looking breasts due to a variety of reasons.
- Plastic Surgery to reduce male breast tissues and flatten the chest appearance can help correct this condition for some patients.
- Visit the Male Breast Reduction surgery for Gynaecomastia page for procedure information.
- Infertility is common and impacts up to 1 in 3 couples, or even more.
- It’s a heart breaking condition and very expensive to treat with fertility enhancing options.
- These may include a variety of expensive In-vitro Fertilisation treatments (IVF).
- Many of these treatments need to be repeated over many months or even years, or require high-level care during pregnancy.
- This results in very large financial expenditures that continue for many months or even decades, leading to financial devastation as well as to emotional distress from infertility related conditions and a lack of success.
So IVF treatments are a key area that lead some Australian couples to explore treatment payment methods options for early release of Super Funds to payment methods these recurring IVF treatments.
So there you have it, what the news articles are reporting is that people who want surgery are seeking ways to payment methods or fund their surgery from a variety of means, including requesting early release of Super for Surgery on compassionate or medical grounds.
For further information on the plastic surgery procedures listed above, send an enquiry form below or phone us during clinic hours on (03) 8849 1444 to speak with a caring, empathetic Patient Care Coordinator.
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