People are using their super to pay for IVF, with their fertility clinic's blessing. That's a conflict of interest

People can access their superannuation early to pay for expensive fertility treatments such as IVF.

They can claim “mental disturbance” if they want part of their funds released early on compassionate grounds.

However, in our recent paper in the UNSW Law Journal, we question whether the rules are tight enough to protect future retirement incomes. We also consider whether involvement of fertility clinics and other companies in the process is a conflict of interest.

Here’s how it all works and what needs to change.

Here’s what happens

People can apply to the Australian Tax Office to legally access their super funds early on compassionate grounds for a range of medical procedures, including IVF. Last year, tax figures show almost 34,000 people did this, accessing a total of more than A$513 million. That figure has grown considerably since 2015, where 14,000 people accessed $184 million.

If that medical procedure is dentistry or surgery, people need to show the procedure is needed to alleviate pain or to treat a life-threatening injury or illness.

But to access IVF or other fertility treatments, these criteria don’t apply. So the only avenue is for people to claim they are experiencing “acute, or chronic, mental disturbance” that can only be alleviated by the fertility treatment.

People must also submit two medical practitioner reports certifying the treatment is necessary.

The Australian Tax Office did not provide a breakdown of how many people accessed super funds for IVF this way when we requested detailed figures. However, we understand accessing super for IVF is one of the main medical reasons.

We do not advocate a blanket ban on the process. For many people, having a baby is more important than the amount of money they retire with. But to protect individuals and couples seeking fertility treatment, we need to reform the rules surrounding early release of super for IVF.

This is needed so people are aware of the implications of accessing their super early, have enough money to retire on, and that this option is only available after a rigorous assessment process independent of private fertility clinics.

Read more: Considering using IVF to have a baby? Here's what you need to know

What does ‘mental disturbance’ mean?

Superannuation legislation does not define the term “mental disturbance”. It’s not a term used to diagnose mental illness. So it can be interpreted in many ways.

This might mean someone may have an “acute, or chronic, mental disturbance”, such as a diagnosis of severe depression. Or they may not have a diagnosed mental health condition, but nevertheless may be extremely distressed about wanting a baby and not being able to afford IVF.

A 2018 parliamentary paper suggested the term “diagnosed mental illness or behavioural disorder” instead; we agree. These words are consistent with the language psychiatrists and psychologists use and understand; are more specific and clearer; and people would have to meet clearly defined criteria before being diagnosed.

Who are these medical practitioners?

The legislation is vague about the qualifications a certifying medical practitioner needs to have, a topic considered in a case that went to the Federal Court.

So theoretically, it might be possible for a fertility doctor from an IVF clinic to be one of the certifying doctors, which may be a conflict of interest.

If that fertility doctor doesn’t also have psychiatric expertise, this also means the doctor doesn’t have the expertise to certify someone has a “mental disturbance”.

This situation might lead people to think the doctor might not be impartial or objective, whether or not that’s the case. This is because the fertility clinic ultimately profits from the release of any super funds.

To prevent any perceived or actual conflict of interest, we strongly recommend one of the certifying medical practitioners have clinical expertise in mental health, such as psychiatry, who would then evaluate the person wishing to access their super for IVF.

We recommend this person be independent of the fertility clinic, to be further removed from any actual or perceived conflict of interest.

An appropriately trained mental health practitioner would also ensure the person gets mental health care (in addition to medical advice) before IVF is prescribed and administered.

Other companies get involved

Specialist companies help people access their super early for services, including IVF. Some advertise their services on fertility clinic websites.

Some of these third-party intermediaries charge a fee to help people prepare and submit their applications to the Australian Tax Office. In some cases, fertility clinics refer people to them.

And a 2018 parliamentary paper noted a greater awareness of third-party intermediaries may have contributed to an increase in applications for early release of super on medical grounds.

The practice also raises ethical concerns about companies that have built their business model on taking a cut of people’s super at a time where they may be vulnerable or their mental health fragile.

This has led some consumer groups and financial planners to call for more stringent controls on third-party intermediaries and their involvement in early access to super on medical grounds, especially when medical practitioners are likely to financially benefit.

Read more: The business of IVF: how human eggs went from simple cells to a valuable commodity

Independent financial counselling

We recommend people be required to undertake affordable financial counselling before starting IVF or other fertility treatment, whether or not they’re accessing their super early to pay for it. This should be impartial and independent of any fertility clinic to avoid any potential or perceived conflict of interest.

This should allow people to make informed financial decisions based on their assets and liabilities, and the most effective and equitable funding avenues for treatment. This may or may not involve early access to super. If people do go ahead, they need to understand the short- and long-term costs of doing so.

This is especially important for women, who generally have lower super balances than men due to lower life-long earnings, gendered pay gaps and career breaks. And it’s women who are more likely to access their super early for IVF or other reasons.

Read more: Standard IVF is fine for most people. So why are so many offered an expensive sperm injection they don't need?

Where to now?

For some people, accessing their super early for fertility treatments is their only chance to start or extend their family. So they need better protection to make sure their interests are not compromised by any financial motivations of fertility treatment providers — whether perceived or actual.

We also need to reduce the need for people to rely on their super to pay for IVF in the first place. That’s why we also recommend greater availability of public funding for fertility technologies, such as IVF.

This would mean people would still be able to access IVF, regardless of whether they are in genuine distress, have a mental health diagnosis, or just want to start or extend their family.

Changes such as these might go some way in providing better security in retirement, greater faith in the fertility industry and fairer provision of treatment.

Lily Porceddu, a lawyer in private practice in Victoria, co-authored this article.