Weight-loss Surgery using Super Funds
Cost-of-living pressures forced more than 10,000 Australians to raid their superannuation last year, with many paying for medical treatments including radical weight-loss surgery.
Doctors say up to 25 per cent of their patients having surgery such as gastric banding are dipping into their super before retirement in order to pay for life-saving procedures.
”Patients view this money as something they may not see, so they may as well use it for healthcare,” said Ken Loi, a gastrointestinal surgeon at St George Private Hospital, who performed 600 bariatric operations last year.
Dr Loi said that, each year, about 100 of his patients pay for weight-loss surgery, which costs about $15,000, using cash from their super funds.
”A lot of people don’t know they can use their super,” he said. ”The hope is that, after surgery, patients will be healthier and they will work longer.”
In most cases, Australians cannot unlock their super until they reach ”preservation age”, which is between 55 and 60, depending on birth date.
But, under exceptional circumstances, the Department of Human Services will assess early access on ”compassionate grounds”, which include medical procedures to treat life-threatening illnesses and chronic pain, medical transport, mortgage assistance and home and car modifications. Super funds make the final decision to release the cash.
”People are seeking surgery that they can’t find in the public sector,” Dr Loi said. ”For weight-loss surgery, patients must have a letter from their doctors proving they have metabolic problems, such as diabetes, which could later lead to heart failure.”
Tamara Wilks, who had gastric sleeve surgery last year, is among 18,024 people who applied to the Department of Human Services for early release of super on compassionate grounds during the 2012-13 financial year. Of those, 11,510 were approved.
Ms Wilks, 44, a nurse at Gosford Hospital, withdrew $6000 from her super account to pay for the surgeon and anaesthetist when her health insurance failed to cover the full cost.
”It would have taken me a long time to save that money,” she said. ”I was 145 kilograms and it was affecting my work and my life. I knew I had to get help straight away.”
In 2001, she dipped into her super to pay for gall bladder surgery through the private system.
”That’s how I knew I could get super for gastric surgery,” Ms Wilks said. ”Most people don’t know they can get the money. As more people drop their private health cover, they will turn to super for help.”
Since 2004, the number of applications to the Department of Human Services for early access to super on compassionate grounds has almost doubled. The average amount released for each approval has surged from $6480 to $12,643. Last year, there were about 15,000 weight-loss operations in NSW, with almost all done in the private health system.
Ken Wong, a central coast gastrointestinal surgeon, says in the past five years the number of patients using super to pay for weight-loss surgery has jumped from 5 per cent to about 25 per cent.
Other medical treatments, such as dental work, palliative care and autism therapy, are also being paid for from the retirement pot.
Nicole Rogerson, chief executive of Autism Awareness, said it was ”common practice” for young families to get early release of super to pay for managing children with autism.
”It is a parents’ decision to risk their own retirement and security,” she said. ”There are a generation of kids that just can’t wait for treatment.”
Under limited circumstances, you can apply for early access to superannuation for:
– Medical treatment expenses
– Medical transport
– Modifications to home or car (to accommodate a disability)
– Funeral and palliative care expenses
– Terminal illness
– Arrears on your mortgage to prevent your home being sold
– Severe financial hardship