Loophole allows super raid for tummy tucks

BODY-conscious Aussies are raiding their retirement funds to pay for costly cosmetic surgery by using a COVID-19 loophole.

The loophole let people withdraw $10,000 from their superannuation savings last financial year, plus $10,000 more this financial year if they can prove to the Australian Taxation Office they are in financial hardship.

But crisis cash - intended to help keep a business afloat or pay the mortgage - is being spent on plastic surgery costing tens of thousands of dollars.

Cashing in super for cosmetic procedures is discussed on a Facebook group with close to 3000 members, dedicated to "tummy tucks'' which are often required after weight loss.

"Just submitted my Super release forms to the ATO! Fingers crossed it gets approved!'' one woman posted.

"Can you get super out for a tummy tuck?'' another asked.

"At the moment you're able to take super out under new covid rules … unemployment etc and not get taxed,'' the first woman responded.

"I wouldn't be able to afford to have my TT if I wasn't able to apply for super to pay for it.''


Facebook conversations about accessing superannuation for tummy tucks
Facebook conversations about accessing superannuation for tummy tucks

In May the Association of Superannuation Funds of Australia estimated about 1.175 million individual payments from super funds, totalling around $9.4 billion in financial support, as part of the temporary scheme.

Economist Andrew Charlton, director of consulting firm AlphaBeta, warned that people who dip into superannuation early could end up retiring in poverty.

"This program was designed to help people with COVID hardship but it is clearly not working as intended for many people," he said.

"For many people, rather than helping alleviate hardship, this program is kicking that hardship down the road to their retirement.

"The whole point of super is to support people in retirement - once it's gone, it's gone."

Australasian Society of Aesthetic Plastic Surgeons president Naveen Somia said tummy tuck surgery was approved under Medicare for patients suffering pain from sagging skin after massive weight loss.

He said patients could apply to access superannuation on compassionate grounds.

A before-and-after tummy tuck picture posted to Facebook
A before-and-after tummy tuck picture posted to Facebook

"If you have a condition that is causing chronic pain and discomfort and you do not have another method of funding surgery, and it's not available in a public hospital, you can make an application ... to access your super,'' he said.

"We've seen patients with a significant amount of loose skin who have lost 60kg or 70kg and it causes chafing and infections.''

Liz Washington, owner of Brisbane cosmetic surgery The Sharp Clinic, said "we don't recommend people use super for surgery''.

"People need to ensure they are not impacting on their retirement savings in order to pay for surgery they may not have the funds to afford,'' she said.

Federal Treasurer Josh Frydenberg said more than 2.3 million Australians had applied for early access to their superannuation - withdrawing $19 billion during the pandemic.

"The Government believes Australians are best placed to make decisions about their own money and it is important that people are able to access their superannuation at a time when they need it most,'' he said.

Arusha Watkins accessed her super for a tummy tuck. Picture: Jamie Hanson
Arusha Watkins accessed her super for a tummy tuck. Picture: Jamie Hanson

No regrets as mum tucks in

FOR Arusha Watkins the decision to get a tummy tuck was not an easy one.

The mum of two lost 26kg over the past few years, leaving her with excess skin, causing pain and health issues.

It's been a long, confusing, stressful and at times emotional journey for the 30-year-old Upper Kedron local, who was approved for compassionate superannuation withdrawal this year and did not use the COVID-19 loophole.

"It's such a big thing, that will cost a lot of money and put stress on my family during my recovery, I wanted to make sure it was all done properly," she said.

Ms Watkins is scheduled for a tummy tuck operation with a Brisbane surgeon in January.

"There is a real process to be medically approved to access your super, you have to document everything, meet certain criteria, get referrals and letters from your GP and surgeon - it's not an easy process," she said.

"I am on support groups online, which are very helpful, with everyone sharing their experience."

Ms Watkins said she would be taxed 22 per cent on her super withdrawal.

Medically approved tummy tuck procedures are partially covered under Medicare and private health insurance.