Would you cash in your super to be slim?
BOTH Joanna and Jade have withdrawn their super early to pay for weight-loss surgery. Would you trade in your financial future for a slimmer body?
Superannuation can be withdrawn early to pay for weight-loss surgery and a growing number of Australians are choosing to trade their financial future for a slimmer body.
Two years ago, at the age of 30, Joanna Metzi faced a decision that would significantly impact her future: continue battling morbid obesity on her own, as she had unsuccessfully done for most of her adult life, or withdraw half of her superannuation -$25,000 - to fund gastric sleeve surgery.
"If I kept going the way that I was, I wasn't going to enjoy that money, because I wasn't going to make it to retirement age," Metzi says. She was 128kg with a BMI of 47.6 and already suffered from high blood pressure and lower back problems.
She was also well aware of her increased risk of chronic disease such as type 2 diabetes, stroke and cardiovascular disease.
The National Health and Medical Research Council says weight-loss surgery is "the most effective intervention for severe obesity" - and Metzi believed it could work for her.
"I needed help," she says. "I was happy to use that money to prolong my life."
To pay for her surgery, Metzi was able to access her superannuation early based on medical compassionate grounds - she discovered this option during her research into weight-loss surgery.
According to the Australian Department of Human Services, applications for compassionate grounds have risen by more than 50 per cent in the last reported financial year with almost $205 million approved for release.
Gastric sleeve surgery, also known as sleeve gastrectomy, involves permanently removing 80 to 90 per cent of the stomach so it can only hold 200ml of food and liquid.
It also decreases levels of the hunger hormone ghrelin by 50 to 65 per cent.
Since the surgery 21 months ago, Metzi, now 32, has lost 51kg (BMI 28.3), but she's adamant that it's not the lazy person's weight-loss solution. She's committed to a healthy lifestyle overhaul to ensure the results of the surgery are long-lasting.
"I had to change 30 years of bad habits and an unhealthy relationship with food," she says. "I used to eat lots of takeaway until I was stuffed. Now I do cardio and strength training, and eat lots of protein and vegetables."
More than 76 per cent of sleeve gastrectomy patients lose excess weight in the first year and 56 per cent keep it off after five years.
While surgery isn't easy, it also isn't cheap, with Australians paying $17.8 million in out-of-pocket expenses for sleeve gastrectomy in 2014-2015, according to a report from the Australian Institute of Health and Welfare (AIHW).
Weight-loss surgery is also increasingly popular: The AIHW found there were 22,700 admissions that year compared to 9300 in the 10 years prior.
Dr Craig Taylor, a bariatric surgeon at OClinic in Sydney, estimates 5 per cent of his patients access their super to pay for weight-loss surgery. To be eligible, patients need to meet weight-loss surgery criteria in order to get a referral from their GP and a specialist, then submit an application to Centrelink.
"The minimum criteria for weight-loss surgery is that a patient has to have a BMI in excess of 35 and hasn't been able to bring their weight under control for the past five years, despite a concerted effort to do so through dietary and lifestyle means," Taylor says.
"For a patient to be able to access super, they need to fit the above criteria but at a more severe level, so their weight doesn't just have the potential to affect their health, it has to be directly affecting their health right now."
Jade Mirovic weighed 123kg, with a BMI of 41, when she started investigating surgery last year. "I was morbidly obese and I felt, with the amount of weight I wanted to lose, that gastric sleeve surgery was appropriate," the 28-year-old says.
Because she had private health insurance to cover the surgery and private hospital stay, Mirovic needed an extra $6550 plus tax from her super to pay for other fees.
She's lost 20kg since starting her pre-op diet and undergoing the surgery in July.
Like Metzi, she's determined to change her relationship with food - especially after seeing other people regain the weight after surgery.
"The sleeve isn't a quick fix and it isn't permanent unless you're committed to a healthy lifestyle," she says. "Accessing my super for the surgery has given me a healthier life. When I get to whatever age I decide to retire at, it probably won't make much of a difference. I have time to make up the money."
Taylor points out that patients who undergo a sleeve gastrectomy also have a much higher earning capacity than when they were obese as chronic issues that may have prevented them from working are alleviated. "The money they withdraw from their super to pay for hospital costs is more than made up for by the increased productivity after surgery," he says.
"I think it's entirely appropriate for patients to access their superannuation now, undergo the lifesaving surgery and enjoy a healthier, longer life so they're able to have a happy retirement in the future."
Early access to super: the lowdown
You're able to access your superannuation early for medical treatment or associated travel if you suffer from these conditions:
- A life-threatening illness or injury
- Acute or chronic pain
- Acute or chronic mental illness
You must also show that:
- You can't get the treatment through the public health system
- You can't pay any other way, such as using savings or selling assets
Once an application has been submitted to Centrelink, it takes up to 28 days for it to be assessed.
What the financial planner says
"The ramifications of accessing super early could be really significant," Ben Marshan, head of policy at the Financial Planning Association, says.
"Conservatively, every $1000 that you have in super at age 30 will be worth about $4500 at age 60. If you take $1000 out now, you have to put in $4500 over the next 30 years to get back to the same position. Financially, for a lot of people that can be a massive struggle and they'll never actually catch up."
Get professional financial help to understand the implications for yourself, Marshan advises.
"Accessing your super early should only ever be a last resort."