Compassionate Release of Super: Eligibility, Form and Scams to Avoid

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What Is Compassionate Release of Super?

Super is normally locked away until you meet a condition of release, such as retiring after your preservation age. Compassionate release is one of the few exceptions. It lets the ATO approve the release of a set amount of your super to pay for a specific eligible expense.

It is not a way to pay everyday bills. If you are struggling with general living costs, you may instead be able to apply for early release on the grounds of severe financial hardship, which you apply for directly through your super fund. Our guide to accessing your super early explains all the legal options.

In 2025-26, Australians withdrew $1.46 billion from super on compassionate grounds, most of it for medical costs (ABC News, October 2026).

What Expenses Are Eligible?

According to the ATO's compassionate release guidance, you may be able to have super released on compassionate grounds to pay for:

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  medical treatment for you or your dependant
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  medical transport for you or your dependant
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  modifying your home or vehicle to meet special needs arising from your or your dependant's severe disability
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  palliative care for your or your dependant's terminal illness
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  death, funeral or burial expenses for your dependant
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  preventing the foreclosure or forced sale of your home.

Two rules apply to every application:

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  The expense generally must not have been paid yet. If you borrowed money to pay for it, you may be able to access super to repay the outstanding loan.
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  You must have no other way to pay. The ATO expects you to have considered savings (including your partner's), mortgage redraw, available credit, selling assets, payment plans and loans first. If you can pay part of the cost, you can apply only for the remainder.

Who Can Apply?

You can apply for your own super. Members of a self-managed super fund (SMSF) also apply through the ATO. Members of some exempt public sector super schemes apply directly to their scheme instead, unless the fund tells them otherwise.

If you have a terminal medical condition, there is a separate pathway: you apply directly to your super fund, and the amount released is not taxed.

How to Apply for Compassionate Release

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  Check you are eligible and what evidence the ATO needs for your type of expense.
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  Contact your super fund to confirm it will release super on compassionate grounds, that your balance covers the expense and the tax, what fees it charges, and how the release affects any insurance in your account.
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  Apply online: log in to myGov, open ATO online services, then select Super, Manage, Compassionate release of super (see the ATO's application instructions).
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  Or apply on paper: if you can't use online services, phone the ATO on 13 10 20 to request the compassionate release of superannuation form, and post it with your supporting document
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  Wait for the decision. If approved, the ATO notifies your fund, which then pays the amount.

The ATO updated the online and paper application forms from 17 November 2025. If you are applying on paper, use the current version, as old forms may be cancelled.

How Much Can You Get, and How Is It Taxed?

The ATO only approves the amount you need for the eligible expense, after taking into account what you can pay through other means. The released super is paid and taxed as a normal super lump sum. The rate depends on your age, your preservation age and the components of your super. You must include any taxable amount in your tax return for that year.

Make sure your balance covers the expense and the tax withheld. If you are later certified as having a terminal medical condition, at the time of payment or within 90 days, you may be able to ask for a refund of the tax withheld.

What the ATO Is Cracking Down On

The ATO checks applications closely and may ask for bank statements, letters from lenders or providers, or statutory declarations to show that you couldn't pay another way. Making a false or misleading statement can lead to penalties.

In October 2026, the ATO, with support from the Australian Federal Police, executed a search warrant at a Melbourne dental practice linked to a former health practitioner. The practitioner allegedly supplied false medical reports to support compassionate release applications for dental work where the applicants weren't eligible, or the work was never done. The alleged scheme supported 1,178 applications and the release of more than $36.4 million in super (Accountants Daily, October 2026).

Warning signs of an illegal early release scheme:

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  someone offers to "get your super out" for a fee or a percentage
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  a provider offers to write a medical report, or inflate a quote, to support your application
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  you are told to set up an SMSF so you can access your super early
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  you are told the money can come back to you outside the super system.

If you have taken part in an arrangement like this, get advice straight away. Our article on tax scams in Australia covers how to report suspicious contact to the ATO.

Before You Apply: What to Consider

Using super now reduces your retirement savings and can affect your insurance cover inside super, family tax benefit and child support. Before you apply:

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  ask your medical provider about payment plans and what Medicare or your health insurer will cover
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  check state patient travel schemes for medical transport costs
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  check NDIS or state support for disability-related modifications
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  consider free financial counselling, such as the National Debt Helpline.

If you'd like advice on the long-term impact on your retirement, our financial advisors in Adelaide can help you weigh it up.

How The Kalculators Can Help

We can help you understand the tax on a compassionate release payment, include it correctly on your tax return, and, if you have an SMSF, ensure the release is handled within the rules. Our SMSF administration team works with trustees to keep their funds compliant.

The Bottom Line

Compassionate release of super can help in a genuine crisis, but it is a last resort; it is taxed, and the ATO is watching for false claims. Check every other way to pay first, talk to your fund, and wait for approval before committing to the expense. If you want help understanding the tax impact, book an appointment with our team.