What's wrong with my money attitude? Let's be honest about early super withdrawals for dental.

Young red-haired woman in a bright yellow shirt and a scowl on her face.

The AFR recently ran an article titled, "'It’s my money' attitude leading to illegal super withdrawals," followed by the subtitle, "Early release of super is only supposed to be allowed as a last resort. So why are so many people being approved to use it for dental work?"

You'd be forgiven if you read that to mean accessing your superannuation for dental work was an illegal withdrawal. But that’s not the case, since the "dental work" discussed later in the article involved entirely legal withdrawals. 

The headline also implies that accessing your super for dental work is somehow selfish, and should never be considered even as a last resort. As if maintaining dental health into your retirement years is a luxury. 

And the kicker is that this headline suggests that you shouldn't think of your super as your own money.

Moving past the headline, the article itself does discuss illegal withdrawals, such as setting up self-managed super funds (SMSFs) solely to access super early. It then shifts focus to an increase in compassionate release cases, which are entirely legal and have specific approval criteria.

These are separate but related issues: early withdrawals that can strain the superannuation system. It’s true that too many early withdrawals, legal or not, can cause strain.

It’s a discussion worth having; it’s just unfortunate that the headline was designed to bias you in one direction.

Compassionate release for dental work: a necessary option

A few years ago, a similar debate emerged, but the focus was on weight loss surgery instead of dental work. Critics voiced their concerns, much like they are doing now.

My argument was simple: What good is a well-funded retirement if you're overweight, suffering from back pain, cardiovascular issues and other health problems? Shouldn't people be able to access - yes, their own money - within the confines of the system as it was set up, with compassionate release as an option?

The same logic applies to dental work. What use is a well-funded retirement if you have to sustain yourself through a straw? And if you’re unsure about the importance of good dental health, the Australian Institute of Health and Welfare makes it abundantly clear.

Case in point: I used a bit of my super for dental work through early release. My dentist informed me that due to chromic bruxism (teeth grinding), I would eventually grind my teeth down to nubs without a proper mouthguard. The cost? $1,800. At the time, I was young and didn't have that kind of disposable money. After careful consideration, I determined it was worth sacrificing the $15-$20k that the $1,800 might grow to over 30 years.

In other words, I don't want to spend my retirement years sustaining myself through a straw, and the intervening years dealing with a painful jaw.

So I applied to the ATO for compassionate early release and was approved, since I met all the appropriate criteria, which you can find for yourself on the ATO’s website.

Will it strain the system? That’s for lawmakers to decide. There are laws and regulations that govern super funds. If there’s evidence that the system is being strained under the stress of too many legal withdrawals, lawmakers can tighten regulations. If there's an increase in frivolous or illegal cases, they can tighten enforcement.

However, we should keep in mind that there’s a real and pressing health need for some individuals to access compassionate release to maintain their quality of health, including dental. That’s why the provision is there in the first place.

To learn more about the wide world of superannuation, including early release options, understanding taxes and more, head on over to our super guides hub.