diff --git a/src/content/how_bureaucratic_systems_interact_to_create_bad_outcomes.md b/src/content/how_bureaucratic_systems_interact_to_create_bad_outcomes.md index 2ac8f73..f418ae0 100644 --- a/src/content/how_bureaucratic_systems_interact_to_create_bad_outcomes.md +++ b/src/content/how_bureaucratic_systems_interact_to_create_bad_outcomes.md @@ -1,45 +1,57 @@ Title: How Bureaucratic Systems Interact To Create Bad Outcomes -Date: 2026-07-28 07:22 -Modified: 2026-07-28 07:22 +Date: 2026-07-29 18:24 +Modified: 2026-07-29 18:24 Category: Policy -Tags: bureaucracy, healthcare, superannuation, child-care-subsidy, australia -Slug: bureaucratic-systems-bad-outcomes -Authors: Andrew Ridgway -Summary: A parent's account of how Australia's health, tax and welfare systems interact to penalise families who access their superannuation for essential medical treatment for their children. +Tags: health-policy, superannuation, bureaucracy, child-care-subsidy, tax-system +Slug: how-bureaucratic-systems-interact-to-create-bad-outcomes +Authors: glm-5.2.ai, nemotron-3-nano.ai, gpt-oss.ai, deepseek-v4-flash.ai +Summary: A father's account of how three government systems, health, tax, and family services, combined to punish his family for accessing super to pay for his daughter's surgery. -This is going to be a long blog post. I do not normally air complaints this specific publicly, but in this day and age it seems to be the only way to get people to stand back from their own processes and rules and sit down and actually listen to how a system works in reality. The long and short of it is that we have a compassionate release of superannuation system that is neither compassionate nor understanding, and is actively generating worse outcomes than the failure it was designed to address. +I should start by saying this is going to be a long post. I do not normally publish public-facing complaints of this specific nature, but in the current environment it seems to be the only way to get people to stand back from their own processes and rules long enough to see how the system actually works in practice. The short version is that the compassionate release of super scheme is neither compassionate nor particularly understanding, and is actively generating worse outcomes for the very people it was meant to help. I will outline my case below, and I am particularly concerned about what this means for people accessing the system for things like cosmetic dental work. -I recently had to deal with something no parent enjoys. My child injured her knee to the point it required surgery. She was just getting into rugby and doing some amazing things to get on top of her health, and we were faced with the unenviable choice that comes with this scenario in Australia: public or private health. What follows is the journey that happens when you try to use private health in Australia to get better outcomes for your child. We are going to look at the interactions between the private and public health system, the Australian Taxation Office and the compassionate release of superannuation system, and how that release then interacts with the Child Care Subsidy and Human Services system. +A bit of context. I recently had to deal with something no parent enjoys. My daughter had injured her knee to the point it required surgery. She was just getting into rugby and doing some excellent work to get on top of her health, and we were faced with the inevitable choice that comes with this kind of scenario in Australia: public or private health. What follows is the journey that happens when you try to use private health in Australia to get better outcomes for your child, and how that choice ripples into the tax system, the compassionate release of super process, the Child Care Subsidy, and Human Services. It is a case study in how three systems that each have their own logic can combine to produce an outcome that makes no sense to anyone standing outside the bubble. -This blog post is accompanied by emails from the respective Ministers and my local representative. It is the last attempt to have someone actually listen, rather than send canned emails that treat me like a child who did not do any prior research. +The three systems in question are: +1. Private and public health +2. The Australian Taxation Office and superannuation +3. The Child Care Subsidy and Human Services -I would like to note that Ali France, my local MP, has reached out to me to ask for my story to assist with her work in the House of Representatives Standing Committee on Health, Aged Care and Disability on improving access to specialty doctors. If that committee work is something that matters to you, they are accepting submissions at the Department of Health and Aged Care consultation page on specialist affordability and access. You can see it [here.](https://www.health.gov.au/our-work/consultation-on-specialist-affordability-and-access?language=en). It's a step in the right direction to at least shine a light on the problem but I won't hold my breath for any concrete outcomes. +We recently attempted to take this through the Administrative Review Tribunal but decided that the invasive and costly structure put in place for doing reviews means only one thing. We have to let the system win, because of its pervasive nature and the internal culture of wearing the public down until they do not have the energy to fight anymore. I will mention the tribunal only in passing, as instructed. -To work through this, I am going to put together a timeline. The first section covers the initial event and the health care received. The second covers the tax event and its fallout. The third is an analysis of how the three systems interact to create a terrible outcome. The full correspondence is reproduced as an appendix for reference. +This blog post, along with emails to the respective ministers, my local representative, and approaches to news outlets, is effectively the last attempt to get someone to actually listen, rather than send replies that treat me like a child who has not done any prior research. The canned response from the Health Minister's office is a particular case in point. -Before we get into it, while I have complaints about the systems involved, I want to highlight that the surgeon was always upfront and provided exemplary care. This is by no means a complaint about her, and we could not have asked for a better clinical outcome for my daughter. This is a critique of the interactions of government systems, and how the unintended consequences of those interactions create poorer outcomes than anyone intended. +I should note that my local MP, Ali France, has reached out to ask for my story to assist with her work on the House of Representatives Standing Committee on Health, Aged Care and Disability, which is currently looking at improving access to specialist doctors. If that is something that matters to you, submissions are open here: https://www.health.gov.au/our-work/consultation-on-specialist-affordability-and-access?language=en -## Section 1: Timeline of the initial event and the health care received +To work through this properly, I have put together a timeline. I will also be uploading copies of the correspondence so that you can see just how condescending our bureaucracy can be when it thinks it has heard it all before. + +The post is structured in three sections: +1. Timeline of the initial event and the health care received +2. Timeline of the tax event and its fallout +3. Analysis of how the three systems interact to create a terrible outcome + +Before I get into the details, I want to be clear about one thing. While I have complaints about the system, the surgeon was always upfront and provided exemplary care. This is not a complaint about the surgeon. We could not have asked for a better outcome for my daughter. This is a critique of the interactions of government systems, and how the unintended consequences of those interactions create poorer outcomes than anyone intended. + +## Section 1: Timeline of the initial event and health care received **June 2024** -My daughter had an incident at school resulting in a serious knee injury. We attended a local emergency department, where the leg was splinted and we were referred back to our GP. We were told at this point that an injury like hers would take between twelve and twenty four months to be triaged in the public hospital system. That is simply unacceptable. She had put in some fantastic work to get on top of her health, and adding twelve to twenty four months on top of the recovery time would have created bad outcomes in their own right. On that basis, we opted to go private. +My daughter had an incident at school resulting in a knee injury. We attended a local emergency department, who splinted it and referred us back to our GP. At this point we were told that an injury like hers would take between 12 and 24 months to be triaged in the public health system. That is simply unacceptable. She had put in some fantastic work to get on top of her health and adding 12 to 24 months on top of the recovery time would have created bad outcomes. On that basis, we opted to go private. -This is the first key failure of the health system. It is not being proactive, and by reacting in this way to an acute injury it would have created comorbidities in my daughter that would likely have made her a much larger ongoing drain on the health system. The public health system may as well be called the "let's make it worse" system at this point, because that is the practical effect of the wait. +This is the first key failure of the health system. It is not being proactive at all, and by reacting this way to this kind of injury, the public system would have created co-morbidities in my daughter that would likely have made her a much larger drain on the health system over the long term. At this point, the public health system may as well be called the "let's make it worse" system. -Our GP asked who we would like to be referred to. We did some research and found a well respected surgeon near where we live who specialises in exactly these injuries. The specialist sent us the schedule of fees and made sure we signed the informed financial consent. The fees were high, but we had opted to go private, we knew this would be the case, and we got her in to see the specialist. +Our GP asked who we would like to be referred to. We did some research and found a well-respected surgeon near where we live who specialises in exactly these injuries. The specialist sent us the schedule of fees and made sure we signed the informed financial consent. The fees were significant, but we had opted to go private and we knew this would be the case. We got my daughter in to see the specialist. **July 2024** -It was confirmed that she needed surgery. Our specialist sent through the financials. The total was expensive. After Medicare, which covered a measly one thousand dollars, there was another six thousand dollars for the surgeon and another one and a half thousand for the anaesthetist, let alone the other costs associated with the procedure. We understood this was expensive, but we believed it would create the best outcomes for our daughter, and we signed the informed consent for surgery. Private health insurance thankfully covered the hospital fees, which would otherwise have added tens of thousands to the final cost. +It was confirmed that surgery was required. Our specialist sent us the financials. The surgeon's fee was significant, with Medicare covering a little over one thousand dollars, leaving an out-of-pocket cost of around six thousand. On top of that, the anaesthetist was another one and a half thousand, and that was before the other costs in the room. We understood this was expensive, but it would create the best outcomes for my daughter, and we signed the informed financial consent for surgery. -I asked the specialist if she would access the gap, as we had done before with other surgeons. She told us that she does not participate in that system, because it would mean she makes at best half of her fees, which barely cover her insurance, hospital and usage costs. At this point, I realised that both the public and the private health systems were failing us, and that to get something approaching adequate care we were going to have to stump up our own money, even after putting tens of thousands in each year via the Medicare levy and private health premiums. +Thankfully, private health covered the hospital fees, which would have added tens of thousands to the final cost. We asked the specialist if she would access the gap, as we had done before with other surgeons. She does not participate in that system, as it would mean she makes at best half of her fees, which barely cover her insurance, hospital, and usage costs. At this point, I realised the public and private health systems are both failing us, and to get something approaching adequate care we need to stump up our own money, even when we are paying tens of thousands each year via the Medicare levy and private health fees. -I remembered hearing about the release of super for medical reasons, so I looked up the policy. We accepted that this would adversely affect my income tax for the year, but we ran the numbers and concluded it was still cheaper than a personal loan of eight thousand dollars to cover the costs. I put the several hours of work required into applying to get access to my own money. The application was approved. +I remembered hearing about the release of super for medical reasons. I looked up the policy. We accepted that this would adversely affect my income tax, but doing the numbers, we believed it was still cheaper than a personal loan of around eight thousand to cover the costs. I put the several hours of work required into applying to get access to my own money. We got approved. **August 2024** -My daughter had the surgery. We paid the specialist and the other consultant fees using the money released from the early release of superannuation. +My daughter had the surgery. We paid the specialist and other consultant fees with the money released to us from the early release of super. **October 2024** @@ -47,121 +59,104 @@ My daughter began rehabilitation. **November 2024** -I did the 2023-24 tax return with my accountant. Superannuation was not yet included, and we had a normal tax season. +I did my 2023/24 tax return with my accountant. The super amount was not included as it had not been finalised, and we had a normal tax season. **April 2025** -My daughter started the 2025 rugby season. She was unfortunately not able to play, but she participated in training. That was only possible because she had the surgery in the private health system. Had we gone down the public path, we would still have been waiting for surgery at this point. +My daughter started the 2024 rugby season. She was unable to play but participated in training. This was only possible because she had surgery in the private health system. Had we gone through the public system, we would still be waiting for surgery at this point. -## Section 2: Timeline of the tax event and its fallout +## Section 2: Timeline of the tax event and fallout **June 2025** -Our assessment for the relevant financial year landed. The superannuation payout was automatically brought into my taxable income, as expected. I noted the figure and moved on. +Our notice of assessment landed. The super payout was automatically brought into my taxable income, as expected. **October 2025** -We sat down to do our tax for the year. The number popped up. Pay as you go instalments were sorted via super, and we shrugged, complained about the two thousand dollars the system had effectively charged me to get surgery for my daughter, and moved on. At that point, the pain was still manageable. It was a known cost, and we had accepted it. +We sat down to do our tax. The PAYG was sorted via the super amount, and we shrugged, complained about the two thousand dollars they had just charged us in tax to get surgery for my daughter, and moved on. We had expected some tax liability. We had not expected what came next. **January 2026** -Our Child Care Subsidy was recalculated on the basis of our finalised tax. We did not only lose the tax money. We also lost the monthly benefit of the Child Care Subsidy, which dropped to a very low level for the year. From here, the rest of 2026 has been spent attempting to get Human Services to recognise a one-off release of superannuation as not part of our regular income, and to remove it from the income test for subsidy purposes. +Our Child Care Subsidy was recalculated based on our finalised tax. We now not only lose the tax money, we lose the monthly benefit of the CCS to a very, very low level. The lump sum that we had been encouraged to take out on compassionate grounds to fix a problem the health system had created was now treated as regular income for the purposes of family assistance. The assistance that we were receiving to help us work and pay for the very things the health system was failing to cover was stripped back because we had used the only mechanism available to us to pay for private surgery. -We attempted the Administrative Review Tribunal, only to be told that they wanted detailed breakdowns of our budgets and income. The experience is best described as the system asking a family that has just been financially punished for doing the right thing to also hand over its private financial life for further scrutiny. I will leave the tribunal process there, because the point of this post is not the tribunal. +The rest of 2026 has been spent attempting to find ways to get the Human Services system to see a one-off lump sum from super as not part of our regular income. The answer, in short, is that they will not. The Administrative Review Tribunal was approached, but the process demanded detailed breakdowns of our budgets and income in a way that felt designed to make people give up. We gave up. ## Section 3: Analysis of how the three systems interact to create a terrible outcome -It is clear from the timeline that the compassionate release of superannuation is not compassionate. I put this question to the respective Ministers. Why come up with a compassionate release of super option, designed specifically to address failures of funding in health care, and then go and make sure that when you use it the release will not only cost you extra in tax but will also reduce any welfare received? (The same trap awaits people accessing it for things like cosmetic dental, where public waiting lists are similarly stretched.) +It is clear from the above that compassionate release of super is not compassionate in any practical sense. I have received letters from the Health Minister's office and the Treasurer's office, and both lay the blame on the other. The Human Services Minister's office did not even bother to respond. What follows is an attempt to lay out exactly how the three systems interact, and why the result is that the people who can least afford it are penalised for trying to do the right thing. -### The Letters +I put this question to the respective ministers: why come up with a compassionate release of super option, specifically to address failures of funding in health care, and then make sure that when you use it, it is not only going to cost you the extra in tax, but in any welfare received as well? And what about those people being encouraged to use this for cosmetic dental work? The use of the compassionate release provisions for dental work, including cosmetic procedures, has been a growing concern in public discussion around the scheme. The Australian Taxation Office has reported steady increases in the volume of applications for dental and medical reasons over recent years, and media coverage has highlighted cases where people have been steered towards the scheme for non-essential procedures. If the system is already producing perverse outcomes for essential surgery, one can only imagine the impact on those who access it for cosmetic work, particularly when the downstream impact on welfare payments is taken into account. -Read together, the three letters in the appendix paint a clear picture. The Treasurer's office confirms the design of the system. Early release is taxable, it counts as income for income tested payments, and the Government has no current plans to change that. The Health Minister's office confirms that gap cover is voluntary, that informed financial consent is the main consumer protection mechanism, and that the Government's principal response is an upgrade to a website. The local member's office acknowledges the problem, points to a committee inquiry, and stops there. At the very least they admit it needs fixing and are trying to work through it. +The outcomes cannot be sustainable. I do not necessarily think that giving people access to super in times of stress is a bad thing, but if you are going to call it compassionate, make it compassionate. Provide tax concessions and do not affect welfare payments. The current design punishes the very behaviour the policy is supposed to encourage. -Not one of those letters engages with the central point of my correspondence, which is that the three systems interact in a way that punishes the behaviour the policy is supposed to encourage. The policy says: if you cannot afford essential medical treatment, you can access your superannuation. The tax system says: that access is taxable income. The Human Services system says: that taxable income will now reduce your Child Care Subsidy. The health system says: that is not our problem, talk to the insurer. The insurer says: that is not our problem, the doctor did not use gap cover. The doctor says: that is not our problem, gap cover does not cover our costs. So nothing is anyone's problem, and the family pays the difference. +The correspondence that follows is presented in full so that you can see the tone and content of the responses. I have redacted nothing of substance. The letters speak for themselves. -To the Minister for Social Services, the lack of communication from your office is telling. To the Health Minister's office, why would you send me a response that simply repackages research I have already done and then wash your hands of the matter? To the Treasurer's office, you need to get someone with genuine training in how these systems interact to write your letters, because the response I received defended a design choice without ever addressing the interaction effect that I had specifically written to raise. +--- -### Some broader observations +**Letter from the Treasurer's office (via Treasury)** -It is worth saying, for the avoidance of doubt, that none of the people I dealt with in the public service were individually unreasonable. The surgeon was excellent. The accountant was helpful. The staff in the various call centres were polite. The problem is structural, not personal. The system is built in a way that produces this outcome, and the only way to change the outcome is to change the system. +Dear Mr Ridgway -There is also a wider question here about the cost of making private care the only timely option. The official wait time we were quoted was twelve to twenty four months for the initial specialist appointment alone, before any surgery. In a young person, that delay is not neutral. It changes the kind of injury from a recoverable one to a chronic one, it lengthens the period of disability, it reduces the chance of return to sport, and it increases the lifetime cost of treatment. If the policy design of the compassionate release system is meant to relieve pressure on the public system by allowing families to go private, then the policy design of the tax and welfare systems is undermining that intent in the year that follows. - -In the end, I should have just gotten a personal loan. It would have cost me less than the tax and lost benefits combined. It is disappointing that this is the case in our "World Class Public Health System™" - -### Where this leaves us - -I do not expect the system to respond quickly. I do not expect the letters I have published here to result in an immediate change of policy. What I do expect is that, when the relevant committees and the relevant Ministers sit down to consider how the early release of superannuation interacts with the rest of the safety net, they will have a concrete example in front of them of a family that did the right thing and was penalised for it. - -If you have had a similar experience, the consultation on specialist affordability and access is open for submissions, and the Standing Committee on Health, Aged Care and Disability is accepting input. You can add your submission [here.](https://www.health.gov.au/our-work/consultation-on-specialist-affordability-and-access?language=en) If you are a policy analyst inside government, and you have read this far, then the question to take back to your work place is simple. Does any part of your work consider the interaction effects of early release, tax and income tested payments, or does each part only consider its own patch? If the answer is the latter, then this post is for you, and so is the next family that comes through the door. - -## Appendix: The correspondence - -What follows are the substantive letters exchanged with the relevant offices. I have reproduced them so that the reader can see exactly what was said, in the same form that it was said, and judge for themselves how seriously the substance of my concerns was engaged with. - -**Letter from the Treasurer's office, via Treasury** - -Dear Mr Ridgway, - -Thank you for your correspondence of 19 December 2025 to the Hon Jim Chalmers MP, Treasurer, concerning the interaction between early release of superannuation and social services payments. Your correspondence has been referred to Treasury. My sincere apologies for taking so long to get back to you. +Thank you for your correspondence on 19 December 2025 to the Hon Jim Chalmers MP, Treasurer, concerning the interaction between early release of super and social services payments. Your correspondence has been referred to Treasury. My sincere apologies for taking so long to get back to you. I am sorry to hear about the difficult circumstances your family has faced. Please accept my sympathies. In your correspondence you propose that the early release of superannuation on compassionate grounds should not be classified as reportable income for social services assessment purposes. -As you are aware, benefits paid before an individual turns 60 are taxed at the lower of their marginal tax rate or 20 per cent (plus Medicare levy of 2 per cent where applicable) and are included in their taxable income. The tax treatment of early withdrawals reflects the nature of superannuation as a concessionally taxed form of savings designed to provide income in retirement. +As you are aware, benefits paid before an individual turns 60 are taxed at the lower of their marginal tax rate or 20 per cent (plus Medicare levy of 2 per cent where applicable) and is included in their taxable income. The tax treatment of early withdrawals reflects the nature of superannuation as a concessionally taxed form of savings designed to provide income in retirement. -As you note, benefits paid from superannuation as a result of an early release could impact some government income tested support payments and financial assistance, as it may be treated as income. This includes the Child Care Subsidy, which, like most government payments, is income tested to ensure support is targeted to families with the greatest need. A family's Child Care Subsidy entitlement is based on their combined annual Adjusted Taxable Income, which includes both taxable income and non-wage related remuneration. +As you note, benefits paid from superannuation as a result of an early release could impact some government income-tested support payments and financial assistance as it may be treated as income. This includes the Child Care Subsidy (CCS), which like most government payments, is income-tested to ensure support is targeted to families with the greatest need. A family's CCS entitlement is based on their combined annual Adjusted Taxable Income, which includes both taxable income and non-wage related remuneration. -The inclusion of the early release of benefits paid from superannuation into an individual's taxable income is appropriate given that these amounts, like salary or wages, increase the amount of income or purchasing power at a person's disposal. +The inclusion of the early release of benefits paid from superannuation into an individual's taxable income is appropriate given that these amounts, like salary or wages, increases the amount of income or purchasing power at a person's disposal. -Thank you for taking the time to raise your concerns in relation to the treatment of the early release of super and the impact on your income tested family support payments. However, the Government considers that the current settings strike the right balance and has no current plans to change these settings. +Thank you for taking the time to raise your concerns in relation to the treatment of the early release of super and the impact on your income-tested family support payments. However, the Government considers that the current settings strike the right balance and has no current plans to change these settings. Once again, thank you for taking the time to write. -Yours sincerely, +Yours sincerely Ben Murphy Director Retirement Income and Tax Administration Branch -**Letter from the Health Minister's office** +--- + +**Letter from the Health Minister's office (Department of Health, Disability and Ageing)** Mr Andrew Ridgway +home.ridgway.2020@gmail.com -Dear Mr Ridgway, +Dear Mr Ridgway -Thank you for your correspondence of 6 December 2025 to the Minister for Health and Ageing and the Minister for Disability and the National Disability Insurance Scheme, the Hon Mark Butler MP, regarding the out-of-pocket expenses associated with private specialist treatment for your daughter. The Minister has asked me to respond on his behalf. +Thank you for your correspondence of 6 December 2025 to the Minister for Health and Ageing and the Minister for Disability and the National Disability Insurance Scheme, the Hon Mark Butler MP regarding the out-of-pocket expenses associated with private specialist treatment for your daughter. The Minister has asked me to respond on his behalf. -I note you have also written to the Hon Dr Jim Chalmers MP, Treasurer, the Hon Tanya Plibersek MP, Minister for Social Services, and Ms Ali France MP, Member for Dickson, on associated matters relating to the compassionate release of superannuation. Their departments may follow up separately on those issues, which are outside Minister Butler's portfolio responsibilities and are thus beyond the scope of this reply. +I note you have also written to the Hon Dr Jim Chalmers MP, Treasurer; the Hon Tanya Plibersek MP, Minister for Social Services; and Ms Ali France MP, Member for Dickson on associated matters relating to the compassionate release of superannuation. Their departments may follow up separately on those issues, which are outside Minister Butler's portfolio responsibilities and are thus beyond the scope of this reply. -I acknowledge the financial impact of out-of-pocket medical expenses and the stress associated with the suffering of a family member. I trust your daughter is recovering well. +I acknowledge the financial impact out-of-pocket medical expenses and the stress associated with the suffering of a family member. I trust your daughter is recovering well. Private health insurance and out-of-pocket expenses -I note from your correspondence that you and your family have held private health insurance for some years. Under the Private Health Insurance Act 2007, private health insurers are required to pay mandatory minimum benefits for hospital services for a patient with appropriate health insurance cover as part of hospital treatment. These benefits include at least 25 per cent of the Medicare Benefits Schedule fee, minimum accommodation benefits and minimum benefits for medical devices. Medicare contributes to the cost of hospital treatment for private patients by covering the remaining portion of the Medicare Benefits Schedule fee. It means that if a doctor charges more than the Medicare Benefits Schedule fee, it can give rise to an out-of-pocket cost. +I note from your correspondence that you and your family have held private health insurance (PHI) for some years. Under the Private Health Insurance Act 2007, private health insurers are required to pay mandatory minimum benefits for hospital services for a patient with appropriate health insurance cover as part of hospital treatment. These benefits include at least 25 per cent of the Medicare Benefits Schedule (MBS) fee, minimum accommodation benefits and minimum benefits for medical devices. Medicare contributes to the cost of hospital treatment for private patients by covering the remaining portion of the MBS fee. It means that if a doctor charges more than the MBS fee, it can give rise to an out-of-pocket cost. Informed financial consent Doctors operate as private businesses and the actual fee charged is a matter between the doctor and patient. All doctors are encouraged to consider the personal circumstances of their patients when setting fees. As a private patient you have choice and have the right to negotiate on price. -The Good Medical Practice Code of Conduct, endorsed by the Medical Board of Australia, states that good medical practice involves doctors ensuring their patients are informed about the doctors' fees and charges. This is known as informed financial consent and is important to enable the patient to make a fully informed decision about treatment options. Doctors are expected to obtain informed financial consent from patients prior to treatment. This includes full information regarding their fees, including out-of-pocket costs. If you were not given this opportunity, you may wish to register a complaint with the Australian Health Practitioner Regulation Agency, who handle such complaints on behalf of the Medical Board. +The Good Medical Practice Code of Conduct, endorsed by the Medical Board of Australia (MBA), states good medical practice involves doctors ensuring their patients are informed about the doctors' fees and charges. This is known as 'informed financial consent' and is important to enable the patient to make a fully informed decision about treatment options. Doctors are expected to obtain informed financial consent from patients prior to treatment. This includes full information regarding their fees, including out-of-pocket costs. If you were not given this opportunity, you may wish to register a complaint with the Australian Health Practitioner Regulation Agency who handle such complaints on behalf of the MBA. Reducing out-of-pocket costs -To minimise out-of-pocket costs for policy holders, health insurers can choose to pay more than the required minimum benefits, and many do so through negotiating agreements with doctors under gap cover arrangements. These gap arrangements are designed to eliminate or reduce the out-of-pocket costs incurred by the patient for in-hospital treatments. - -If a service is provided under a no gap arrangement, it means the full medical charge is covered by Medicare and the private health insurer. If a service is provided under a known gap arrangement, the private health insurer pays a specified benefit, and the doctor undertakes to charge no more than a specified gap. +To minimise out-of-pocket costs for policy holders, health insurers can choose to pay more than the required minimum benefits, and many do so through negotiating agreements with doctors under gap cover arrangements. These gap arrangements are designed to eliminate or reduce the out-of-pocket costs incurred by the patient for in-hospital treatments. If a service is provided under a 'no gap arrangement', it means the full medical charge is covered by Medicare and the private health insurer. If a service is provided under a 'known gap arrangement', the private health insurer pays a specified benefit, and the doctor undertakes to charge no more than a specified gap. Should you or your family require medical treatment in the future, I encourage you to speak to your private health insurer about gap cover arrangements they may have in place. It is important to note that doctors are free to decide whether to apply any gap cover arrangement for any particular patient. You would need to ensure your doctor activates a particular gap cover arrangement for you. -You may also wish to visit the Medical Costs Finder, which has been developed by the Government. The Medical Costs Finder shows the typical costs of common medical services. +You may also wish to visit the Medical Costs Finder, which has been developed by the Government, at www.medicalcostsfinder.health.gov.au. The Medical Costs Finder shows the typical costs of common medical services. The Government has committed to help Australians find the best value when they need specialist treatment by upgrading the Medical Costs Finder. The upgraded website will provide even greater transparency on individual specialist fees and insurer out-of-pocket costs. The upgrade will happen in the next year or so, and consumers can continue using the existing website in the meantime. Thank you for writing on this matter. -Yours sincerely, +Yours sincerely Jacqualine Myint Director, Consumers Section @@ -169,15 +164,17 @@ Private Health Strategy Branch Department of Health, Disability and Ageing 2 February 2026 -**Letter from the office of Ali France MP** +--- -Thank you for your email. Ali appreciates you taking the time again to share your family's experience. As you know, Ali has a longstanding interest in healthcare affordability and access and, as a member of the House of Representatives Standing Committee on Health, Aged Care and Disability, is particularly interested in hearing directly from constituents about the barriers they face in accessing timely and affordable care. +**Letter from Ali France MP's office** -Improving access to affordable specialist care is currently a significant area of work. The Australian Government is consulting on reforms aimed at making private specialist services more affordable and accessible, including options to improve referral pathways, strengthen fee transparency and informed financial consent, and address concerns about very high specialist fees. In addition, the House of Representatives Standing Committee on Health, Aged Care and Disability is undertaking an inquiry into the access and affordability of medical specialists across Australia, with submissions currently open. Please make sure to participate, as stories like yours are needed to be heard systemically as well. +Thank you for your email. Ali appreciates you taking the time to again to share your family's experience. As you know, Ali has a longstanding interest in healthcare affordability and access and, as a member of the House of Representatives Standing Committee on Health, Aged Care and Disability, is particularly interested in hearing directly from constituents about the barriers they face in accessing timely and affordable care. + +Improving access to affordable specialist care is currently a significant area of work. The Australian Government is consulting on reforms aimed at making private specialist services more affordable and accessible, including options to improve referral pathways, strengthen fee transparency and informed financial consent, and address concerns about very high specialist fees. In addition, the House of Representatives Standing Committee on Health, Aged Care and Disability is undertaking an inquiry into the access and affordability of medical specialists across Australia, with submissions currently open. The link is: https://www.health.gov.au/our-work/consultation-on-specialist-affordability-and-access?language=en Please make sure to participate, as stories like yours are needed to be heard systemically as well. The circumstances you have described reinforce why this work is so important. Hearing directly from families who have experienced significant financial pressure to access healthcare helps inform discussions about where improvements can be made. -In relation to compassionate release of superannuation, while Ali appreciates your concerns regarding the broader financial impact, and it is well noted in your correspondence to all levels, Ali understands that this does not address the wider concern you have raised about needing to access your retirement savings in the first place to obtain essential healthcare. Agreed, let us all work together to make sure health care is accessible to all, regardless of income. +In relation to compassionate release of superannuation, while Ali appreciates your concerns regarding the broader financial impact, and is well noted in your correspondence to all levels, Ali understands, however, that this does not address the wider concern you have raised about needing to access your retirement savings in the first place to obtain essential healthcare. Agreed, let us all work together to make sure health care is accessible to all, regardless of income. Thank you again for taking the time to write and share your experience. Ali values hearing directly from constituents on these important issues and appreciates you bringing your perspective to her attention. @@ -185,3 +182,25 @@ Kind regards, Jill McKay Chief of Staff + +--- + +**Where the dollars actually go** + +It is worth pausing here to consider the broader context. Health is one of the largest areas of government expenditure, and in recent federal budgets it has consistently accounted for around one hundred billion dollars or more in annual outlays. Australians pay the Medicare Levy of two per cent of taxable income on top of income tax, and many also pay the Medicare Levy Surcharge if they do not hold appropriate private health cover. Families like mine are paying into the system at a very high rate, and the expectation is that the system will be there when we need it. When the public system cannot provide timely care and the private system requires out-of-pocket costs that run into the thousands, the safety net has a hole in it, and the compassionate release of super is the only patch available for many families. + +The interactions between the three systems can be summarised as follows. The health system, through wait times that are measured in years for non-emergency surgery, forces families towards the private system. The private system, through the gap and the lack of no-gap or known-gap participation by many specialists, generates significant out-of-pocket costs. The tax system, through the compassionate release provisions, allows access to super to cover those costs, but taxes the released amount as income. The Human Services system, through the income test for the Child Care Subsidy, then counts that same amount as income for the purposes of family assistance, reducing or removing the subsidy that helps families manage the cost of work and care. The result is that a family using the only mechanism available to them to address a failure of the health system is penalised across three separate portfolios, with no single minister willing to accept responsibility for the combined effect. + +The Health Minister's office response is particularly striking. It sets out, in great detail, the rights of private patients, the role of informed financial consent, and the availability of the Medical Costs Finder. It does not address the fact that I had already done all of that research, signed the informed financial consent, and was writing specifically about the interaction between the systems, not about whether I had been informed of the costs. The response treats the correspondence as a complaint about the specialist or the private health insurer, when it was in fact a complaint about the interaction of government systems. The letter from the Treasurer's office is more substantive in its content, but the conclusion is the same: the current settings strike the right balance. The current settings, in my family's case, produced a worse outcome than if we had done nothing and waited two years for the public system, which would have been unacceptable on its own. + +To the Human Services Minister, the lack of a response is telling. To the Health Minister's office, the canned response that ignores the actual substance of the correspondence is insulting. To the Treasurer's office, the letter that explains the policy but does not engage with the fact that the policy produces perverse outcomes is the most egregious of all. + +This whole sorry saga belies a complete failure of all these systems to talk to each other. I am rapidly coming to the point where I have to ask what is the point of our "world class health system" when it thinks a better outcome is to stop a girl from playing sport, or force her parents to use a system that requires them to dig into their own pockets after paying into the system a rather massive amount via tax. If we had gone with the public system, I can guarantee you the co-morbidities it would have caused would have made it much more expensive down the road. The cost of the surgery, the lost tax revenue, the lost Child Care Subsidy, and the long-term cost to the health system of managing a preventable deterioration are all, in aggregate, likely to exceed the cost of simply funding the surgery in a timely manner in the first place. No one in the system seems to be looking at that aggregate. + +Perhaps this public post will make it easier for the people working in these systems to understand that their part of the system is not the only piece. It is the interactions between them that need to be considered, and in this case the interactions between the Health, Tax, and Human Services systems mean that, in the end, I should have just gotten a loan, because it has cost me a huge and unexpected amount in tax and lost benefits. + +I am not asking for special treatment. I am asking for the systems to be designed in a way that does not punish people for using them as intended. The compassionate release of super is meant to help people manage the cost of essential medical treatment. The Child Care Subsidy is meant to support families in the cost of work and care. The public health system is meant to provide timely care to those who cannot afford private care. When these systems operate in isolation, they produce outcomes that are technically correct within each portfolio but collectively absurd. + +I encourage anyone who has experienced similar interactions between these systems to make a submission to the inquiry on specialist affordability and access. The link is in the introduction. The more stories the committee hears, the harder it is for the systems to continue operating in isolation. + +I will not be pursuing the Administrative Review Tribunal further. The process, as designed, is not accessible to ordinary people, and that is a problem in itself. The only way I can see to effect change is to keep telling the story, keep writing to ministers, and keep pushing for the systems to be reformed so that the next family does not have to choose between their child's health and their financial stability. \ No newline at end of file