Dental care is becoming increasingly unaffordable for Australians, leading to a significant surge in early superannuation withdrawals to cover treatment costs. According to the Australian Tax Office (ATO), applications for compassionate release of superannuation have risen by over 75 percent since before the COVID-19 pandemic, jumping from approximately 39,000 in the 2019-2020 financial year to nearly 69,000 in 2023-2024.
The data reveals that out of the applications for medical care, around 73 percent were approved, resulting in a staggering $1.04 billion being withdrawn from superannuation funds. The average amount accessed per individual reached $20,800. This trend underscores a growing issue regarding access to affordable dental care in Australia.
The approval process for early withdrawal is not straightforward. The ATO maintains strict criteria, allowing access only in limited circumstances, which may include urgent medical treatments for chronic pain or critical injuries. Applicants must demonstrate that necessary medical treatments are not readily available through the public health system.
Significantly, more than half of the applications in the current financial year—approximately 32,000—were made to fund dental treatments. This fact highlights the ongoing debate about who bears the cost of dental care in Australia. While public dental services are available to select groups, such as those holding a Centrelink pensioner concession card or children under specific programs, the majority of Australians rely on private dental providers.
Despite two-thirds of dentists advocating for essential dental services to be included in Medicare, cost remains a barrier. The Grattan Institute estimates that adding dental services to Medicare would cost around $5.6 billion annually, while the Greens party suggests the figure could be as high as $7.5 billion.
During discussions leading up to the May election, Health Minister Mark Butler stated that the government would “love to bring dental onto Medicare at some stage,” emphasizing the need for further action on this critical issue.
In the financial year 2022-2023, Australians collectively spent over $7.6 billion on dental services. Health insurers contributed $2.5 billion, while federal, state, and territory governments collectively spent $2.4 billion. This totals approximately $12.5 billion annually on dental care.
The situation is dire, with 32 percent of Australians aged between 35 and 54 experiencing dental issues such as cavities or missing teeth—a number that climbs to 60 percent for those aged 55 to 74. The financial burden is compounded by the fact that around 2 million Australians are delaying or forgoing dental care due to cost concerns.
Waiting times for subsidized dental treatment vary widely across the country. In Victoria, the average wait for non-urgent dental services can be up to 12.4 months, while in Tasmania and the Northern Territory, it can extend to 2.5 years.
The implications of early superannuation withdrawals are significant. The total of $665 million withdrawn annually for dental treatment raises concerns about long-term financial security for those affected. If a person accesses their superannuation at age 30, this could result in a loss of nearly $96,000 by retirement age, potentially impacting their reliance on the aged pension.
While accessing superannuation for medical emergencies is justified, many argue that individuals should not be forced into such measures. The Australian Dental Association has proposed a means-tested dental scheme for seniors, estimated to cost between $1.1 and $1.4 billion annually. Although these figures are substantial, they pale in comparison to the long-term financial losses incurred from early superannuation withdrawals.
As the landscape of dental care continues to evolve, the need for comprehensive reform is clear. With the current system leading to a situation where individuals are using their retirement savings to cover essential health needs, it is vital for policymakers to address the shortcomings in dental care access and affordability. The rising numbers provide compelling evidence that urgent action is necessary to ensure that all Australians can receive the dental care they need without jeopardizing their financial futures.
