Navigating Compassionate Grounds Super: A Supportive Safety Net
Individuals are often advised to prepare for their future by saving diligently to secure a comfortable retirement. This includes building a nest egg and contributing to their superannuation funds. But life is unpredictable, and there are moments when circumstances take an unexpected turn, requiring immediate attention and financial support. This is where compassionate grounds superannuation comes into play – a safety net designed to offer relief during particularly challenging times and can be used to cover dental treatment.
Understanding Compassionate Grounds Super
Super on compassionate grounds refers to the provision that allows individuals to access their superannuation funds on compassionate grounds in specific situations. The intention is to assist people facing severe financial hardship or significant medical expenses for themselves or their dependents. While superannuation is primarily earmarked for retirement, compassionate grounds access recognises the need for flexibility in times of crisis. With limited financial capacity, people can get early access to a lump sum payment.
Common Super on Compassionate Grounds – Eligible Expenses
One of the primary reasons individuals seek compassionate grounds super is to cover the costs of medical treatment for themselves or their dependents. This can include expenses related to surgery, hospital stays, medications, and other healthcare needs.
The threat of losing one’s home due to mortgage stress can be emotionally and financially debilitating. Compassionate grounds access can help individuals in such situations to prevent foreclosure and maintain stability for themselves and their families.
Dealing with the loss of a loved one is an emotionally challenging time, and funeral expenses can place an additional burden on grieving families. Compassionate grounds super allow for access to funds to cover these immediate costs.
Individuals with disabilities may require modifications to their living spaces or vehicles to enhance accessibility. Compassionate grounds super can be accessed to fund these necessary adjustments, improving the quality of life for those facing mobility challenges.
What is Medical or Dental Treatment?
For compassionate release purposes, medical or dental treatment involves administering medicines or practising medicine, such as surgery or psychotherapy.
The medical or dental treatment must meet both of the following eligibility conditions:
Eligibility condition 1: you or your dependant must require the medical treatment to either:
- To treat a life-threatening illness or injury (or severe disability)
- To alleviate acute or chronic pain
- To alleviate acute or chronic mental illness.
Eligibility condition 2: the treatment is not readily available through the public health system.
If you or your dependant have borrowed money to pay for the medical treatment, further eligibility criteria for the borrowed amount will need to be met in addition to the above.
If you borrowed money to pay for an eligible expense and can’t repay it, you may access your super to clear the balance.
Examples of financial arrangements that may be eligible for super early are:
- amounts borrowed from family or friends
- amounts lent by a commercial lender (banks or other lenders)
- credit card debts
- amounts owed to ‘pay later’ services.
You can learn more about this on the ATO website.
Early Release Eligible Treatments
Expenses for the following medical treatments may be eligible where specific evidence is provided:
- psychiatric treatment
- medicinal drugs
- in vitro fertilisation treatments
- dental treatment
Dental Treatment Evidence
You must provide:
- A copy of your dental treatment plan with details of all stages of the treatment
- an itemised quote (no more than six months old) or unpaid invoices (no more than 30 days old)
- Two medical reports from:
- One from a registered medical specialist who is a specialist in the area that you’re applying to have medical treatment for
- One from either a registered medical practitioner or another registered medical specialist
If you are looking for compassionate grounds, early release super to pay for an expense on behalf of someone else, you may be required to provide evidence of your dependent relationship with them.
If you or your dependent require medical transport, you may also apply for compassionate release of your superannuation. This can be done in conjunction with a dental or medical treatment application.
Western Australia has schemes that assist patients in rural and remote areas with travel expenses for specialised treatment. These schemes may also provide aid for accommodation expenses and travel costs for carers. Some private health insurance providers offer travel and accommodation benefits, which can be checked by reviewing the policy to see what is included.
Medical transport refers to transportation by land, water, or air for medical appointments. To be eligible for medical transport, your treatment must meet two conditions:
Eligibility condition 1: you or your dependant must require treatment for one of the following reasons:
- treat a life-threatening illness or injury
- alleviate acute or chronic pain
- alleviate acute or chronic mental illness.
Eligibility condition 2: you have no other means to pay for transport to attend your or your dependent’s medical treatment.
- The ATO will only approve the most cost-efficient and reasonable transport option available.
- Expenses that may be eligible
Expenses eligible for reimbursement for transportation costs for medical treatment include:
- public transport such as a bus, train, or ferry
- government or non-government providers offering medical transportation services on a fee-for-service basis or ambulance
- hire car, private taxi, or ride-share
- domestic flights, international flights, or air ambulance
- goods or services directly associated with travelling somewhere to obtain medical treatment, such as the cost of parking, road tolls or fuel
- purchasing a vehicle (new or second hand) whose primary use (at least 60%) will be for medical reasons and other means of transport can’t reasonably be used.
When assessing release, the ATO will consider:
- frequency of required medical treatment
- period in which the treatment is required
- distance to treatment locations
- any other information provided.
- The ATO will consider the less expensive options for your medical transport needs
The Australian Tax Office Application Process
Accessing early release compassionate grounds super involves a thorough application process to ensure that funds are allocated appropriately and in accordance with the law.
Individuals must demonstrate that they meet specific eligibility criteria and provide supporting documentation, such as medical certificates, to substantiate their claims.
It’s crucial to note that compassionate grounds super is not an automatic entitlement, and each case is assessed individually. The Australian Taxation Office (ATO) oversees the process to ensure compliance with the relevant legislation.
Considerations and Implications
Impact on Retirement Savings
Accessing early release superannuation funds early can have long-term implications on one’s retirement savings. It’s essential to carefully weigh the immediate financial need against the potential impact on future financial security.
While early release and compassionate grounds withdrawals are your funds, there may be tax considerations depending on the specific circumstances. Seeking professional financial advice is advisable to understand the tax implications of accessing superannuation on compassionate grounds.
Individuals contemplating super on compassionate grounds should seek financial advice to explore alternative solutions and understand the broader financial implications. Professional advice can help you make informed decisions that align with your financial goals. We always recommend speaking to your family or close friends about your compassionate grounds super intentions too.
Before you Apply for Early Access
Super on compassionate grounds serves as a vital safety net for individuals facing unforeseen challenges. The Australian Tax Office use it as a mechanism to provide financial relief during times of crisis, it reflects the recognition that life’s uncertainties require flexible solutions.
While it offers a lifeline for those in need, careful consideration and professional guidance are essential to navigate the complexities and potential long-term impacts on financial well-being.
Before you apply for your early access to a compassionate release:
- Review the ATO’s requirements:
- Confirm you have a super balance that can cover the expense and any tax
- Check if your superannuation fund will allow the early release of your super
- Complete all the forms and supporting documents for your compassionate release application.
You can call the Australian Tax Office to ask any questions on 13 10 20 or visit an Aria Dental location.