A childhood bike accident has lead to a Perth man having to take out over half his superannuation to pay for dental work, and be hit with an unexpected tax bill.
Daniel Wright’s dental problems started when he was just five years old.
“I was on my auntie’s farm and I’d fallen off the bike, over the handlebars, and I smashed both my front teeth completely out,” Mr Wright told Nadia Mitsopoulos on ABC Radio Perth.
When his adult teeth came through they were crooked.
“I had major gaps in my teeth and I started, as the years progressed, hating the dentist. I avoided going and getting some of the work done that I needed done at the time,” he said.
He developed gaps from having teeth extracted, gum disease that caused the tops of his teeth to turn black, and severe pain.
He lost so many back teeth he was unable to chew food properly.
“The last tooth that I got pulled I thought ‘I have to get some sort of urgent help now’,” he said.
“I started having stomach problems and stuff as well. That’s when I went and started to investigate what the cost was.”
The cost of all the work he needed done came in at $67,000.
“I needed six teeth done straight away, and then all the rest of my teeth needed work as well,” he said.
“I heard about a friend of mine who accessed his super and thought ‘I’ve got plenty of super in there, so I’ll go down that line’.”
Unexpected costs
Mr Wright contacted a firm called SuperCare, which offered to take care of all the paperwork and medical reports required to access superannuation early on compassionate grounds.
For a fee of $600 SuperCare arranged for him to receive the $67,000 he need to pay his dental bills, and the money duly arrived in his bank account.
However, when he checked his superannuation balance online shortly after, he was shocked to see that $86,300 had disappeared from his super balance.
When he contacted SuperCare they explained the additional $19,300 was due to the withdrawn super being subject to income tax and the additional money had been paid to the ATO.
“No-one made me aware of that [in advance]. I just didn’t even think. It’s my money,” he said.
Withdrawing super early meant it counted as income, in the Australian Tax Office’s eyes, and subject to a tax rate of between 17 and 22 per cent.
It also had stark implications for the child support he is required to pay for his children as well because, on paper, his last tax return showed his income had gone from $80,000 a year to almost double that.
“Once again I had no idea that was going to happen either, so there’s plenty of hidden things that I wasn’t aware of,” he said.
The ABC has contacted SuperCare for comment.
A big hit in retirement
Despite sacrificing more super than he initially expected to, Mr Wright does not regret having the dental work done.
But he does think there needed to be more transparency about what the true costs are.
“Being 43 [years of age] I’ve got a long time left of chewing,” he said.
“But for people who think they’re going to want to go and do it just be aware that it isn’t just that [required] amount.”
Prior to the withdrawal of $86,300 from his super he had $148,000 in his super account.
Financial planner Nick Bruining said the withdrawal will leave a significant dent in Mr Wright’s retirement.
“I absolutely get why he would get it done, and that’s why super’s there for some people,” Mr Bruining said.
“That said, the $80,000 coming out of super, let’s say the super had been in for another 20 years, understand that that’s going to cost him on a return of about 6.5 per cent about $300,000 at the end.
“That’s a lot of money. The dental issues absolutely have been fixed, that’s fantastic. But that will have an impact on their retirement plans without question.”
Push for dental in Medicare
Greens leader Adam Bandt said the details of Mr Wright’s dental bills were “a terrible story”.
“In a wealthy country like ours everyone should be able to get the health care they need, and that includes dental,” he said.
The Greens are currently campaigning to have dental care included as part of Medicare.
There is some dental care available through Medicare for children, but Mr Bandt said that should be extended to adults.
“What we now want to do for people like Daniel, and the 60 per cent of people across this country who last year said they put off going to the dentist and cited cost as the reason, is we want to get dental into Medicare,” he said.
The federal government has said it is not looking to incorporate dental care into Medicare despite agitation from some Labor backbenchers to support it.
Have you had to dip into your super to pay for medical expenses? Are you worried about the impact that will have on your retirement? Let us know in the comments section below.
Also read: Delayed dental care leading to more hospitalisations
