The ATO has affirmed the early release of retirement savings should not be used for medical treatment that is readily available to the public and such actions run counter to superannuation law.
The regulator reiterated its position in a recent post on its website regarding when the tax commissioner’s remedial power (CRP) to modify the operation of superannuation law in some circumstances could not be applied.
Addressing the particular issue of extra discretion for the early release of superannuation, it referenced a case where an individual applied for a determination for early release on compassionate grounds to provide medical treatment for a dependant.
“The commissioner could not make a determination as the individual did not provide medical certification from a specialist that the treatment was necessary and not readily available through the public health system, which is a requirement under subregulation 6.19A(3) of the Superannuation Industry (Supervision) Regulations 1994,” it stated.
“Use of the CRP was proposed to modify the operation of regulation 6.19A to allow a common-sense discretion in assessing compassionate release of superannuation cases.
“The policy is clear that the intended purpose of subregulation 6.19A(3) is that a person must have two medical certificates, one of which must be from a medical specialist.
“The medical certification must state that the treatment is not readily available in the public health system.”
It noted regulation 6.19 does allow for applications to be made to pay for medical treatment expenses of a dependant, but this was a qualified discretion, based on limited criteria listed in the regulation, which could not be used to bypass the evidentiary requirements also listed there.
In rejecting the application for discretion, it added: “This issue is unsuitable for an exercise of the CRP as it is inconsistent with the intended purpose or object of the relevant provision.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason