Compassionate grounds – registered agent information

The role of an agent

Registered agents who support individuals to apply for early access to super play an important role in ensuring their clients are submitting accurate and complete applications to access their super early on compassionate grounds.

When providing this service, particularly where this is the core service your business provides, you need to ensure your clients are aware that:

• accessing super on compassionate grounds should only be used in limited circumstances where all other payment options have been exhausted, including to partially pay the expense
• amounts released
  • are considered assessable income
  • will have tax withheld in addition to any approved amounts
  • need to be reported in their income tax return
  • may impact other government benefits they receive, including family tax benefits and child support payments
• they need to speak to their fund before applying, to
  • confirm they will release any amount approved
  • confirm they have sufficient funds
  • understand the amount of tax that will be withheld and any fees that may be charged
  • understand any other implications it may have, such as insurance attached to their account
• any fees you charge must be paid separately and can't be included in the amount requested from their super
• incomplete applications may be delayed or not approved
• anyone making false or misleading statements when accessing their super under compassionate grounds may face penalties.

If you receive any incomplete or inaccurate documents for your client, do not alter them. You or your client will need to return the document to their provider, to be updated or corrected.

You shouldn't:

• have any role in preparing supporting documents
• influence or advise what content to include in supporting documents that is outside what an agent can advise on.

The relevant registered health practitioner needs to complete the medical documentation based on their professional opinion and in consultation with their patient.

ATO guidance

Before assisting people to access their super early, ensure your processes align with our information. This will reduce delays and prevent your clients receiving incorrect information.

Things to be aware of:

• Financial capacity
• Registration requirements
• Providing financial advice
• Promoting early access
• Fees you charge
• Submitting applications
• Representing your client
• Service standards

Financial capacity

Before assisting your clients to apply, you need to ensure you collect evidence that supports them to meet the eligibility criteria. This includes evidence that they have explored other options to pay the expense in part or full before accessing super.

Accessing super on compassionate grounds should be considered only as a last resort and after all other payment options have been exhausted.

We and the Tax Practitioner's Board (TPB) expect a registered agent to collect and retain evidence that supports the financial capacity of their clients (such as a declaration).

Registration requirements

If you charge or receive a fee or other reward to assist your clients to prepare or submit an application to access super on compassionate grounds, this:

• is considered a tax agent serviceExternal Link
• requires TPB registration.

Providing this service for a fee or other reward without a registrationExternal Link is illegal and can result in significant penalties from the TPB.

Providing financial advice

If you don't hold an Australian financial services licenceExternal Link, you need to ensure you don't influence, advise or encourage your clients to access their super early.

Providing unlicensed financial advice can result in severe penalties and other regulatory action from the Australian Securities & Investments Commission (ASIC).

Promoting early access

If you provide information about accessing super early on compassionate grounds, ensure:

• it is accurate
• doesn't encourage clients to consider this before other options of partially or fully paying the expense.

This applies to information on your website, social media and at your premises. If unsure, we recommend your content refer to the information on our website.

Fees you charge

If you charge a fee for your service, it can't be paid or reimbursed from your client's super. Ensure that any:

• providers you work with don't include these amounts in their quotes or invoices
• applications you assist with doesn't include these amounts in the requested amount for release.

We check for these amounts and, if identified, will deduct them from any approved amounts. Including these fees in applications:

• can cause delays
• may result in significant penalties for making a false or misleading statement for
  • your client
  • the health provider who issued the quote or invoice.

Any fees you charge:

• are not tax-deductible for your clients
• cannot be claimed in their income tax return.

Submitting applications

Applications to access super on compassionate grounds can only be submitted by individuals.

There is no pathway for registered agents to submit online applications on behalf of their clients.

myGov access

If you assist your clients to submit their application, you must not request, collect, or use their myGov sign-in details. Doing so:

• is a breach of the myGov terms of useExternal Link
• compromises the security of your clients' records
• can have significant consequences for the individual, including having their myGov account locked, suspended, or deactivated permanently.

In some cases, those found to be collecting or using their clients' myGov sign-in details may face civil or criminal penalties.

If we identify a registered agent using their client's myGov sign-in details, we will refer the matter to the TPB for further action.

Representing your client

If your client has authorised you to represent them in any interactions with us regarding their application to access super on compassionate grounds, before we can provide you any information:

• you must be registered with the TPB
• you need to have signed written authority from your client to act on their behalf for this purpose
• you must be able to satisfy our proof of record ownership (PORO) requirements.

You must meet these requirements before we can answer any enquires about applications.

If your client lists you as an authorised contact on their application but the above requirements haven't been met, we can't provide you any information about their application.

Service standards

Provided we receive a complete application, our service standards are:

• 14 calendar days for applications submitted via our online form
• 28 calendar days for applications submitted via our paper form.

These service standards apply to all applications, regardless of:

• the expense required
• the applicants' circumstances
• whether they are submitted by a registered agent.

If your client wants to check on the progress of their application during this period, they can use our self-help IVR or phone us on 13 10 20.

Behaviours of concern

We have identified several concerning practices from registered agents assisting their clients to access their super early on compassionate grounds. Examples include:

• assisting ineligible individuals to apply, including through coaching them on how to present their circumstances as eligible to health practitioners
• preparing and submitting applications that are incomplete or contain inaccurate information
• submitting applications where the individual hasn't reviewed the completed application (including supporting documents) and consented to the application being provided to us
• altering supporting documents prepared by third parties
• requesting and/or collecting the myGov sign in details of clients
• submitting applications that include registered agent fees within the requested amount.

These practices are not appropriate and is a potential breach of the Tax Agent Services Act 2009. If we identify these practices, we refer these matters to the TPB.

We also consider if the behaviour warrants other actions, including:

• imposing penalties for making a false or misleading statement
• applying promoter penalty laws
• prosecution via the court system.

We are also concerned about anyone who charges a fee for these services where they are not registered with the TPB (unregistered preparers).

Ahpra and the Dental and Medical Boards of Australia have issued a joint statementExternal Link raising concerns about reports of financial harm to patients and that some practitioners may be placing profits ahead of patient care. This statement includes the following red flags for consumers:

• The appointment for the compassionate release of super is by telehealth when a physical, in-person examination is required.
• Asking for payment upfront.
• A more expensive treatment is recommended when there are cheaper, comparable treatments available.
• Inappropriate or aggressive sales tactics.
• Limited information about ongoing costs.
• Missing financial consent information.
• Asking to use your myGov login.

Outcomes of investigations

We identified several businesses helping individuals with their application for early access to super on compassionate grounds. After investigating these businesses, we found they were:

• assisting individuals to collect the required evidence from health practitioners
• helping their clients submit their application
• representing their clients with the ATO.

These businesses charged a fee for this service but weren't registered with the TPB. We referred the businesses to the TPB for further investigation, which resulted in:

• 4 businesses obtaining the required TPB registration and continuing to provide this service
• 2 businesses making an undertaking to cease providing the service.

How to report concerns

We encourage members of the community to make a tip-off if they are aware of and have concerns about:

• individuals who have inappropriately accessed their super, or
• health practitioners or registered agents that have assisted individuals to inappropriately access their super.

We review all tip-offs about early access to super on compassionate grounds and take action where necessary.

We also encourage anyone with concerns about:

• a specific medical practitioner to report this to the relevant health regulatorExternal Link
• others providing unlicensed advice to report this to the relevant financial regulatorExternal Link.