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@ -71,7 +71,41 @@ Our Child Care Subsidy was recalculated on the basis of our finalised tax. We di
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. 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 correspondence, for the record ## 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 have received letters from the Health Minister's office and the Treasurer's office, and both lay the blame on the other. The Minister for Social Services did not even bother to respond. (The full correspondence is reproduced in the appendix at the end of this post.)
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.)
The outcomes here cannot be sustainable. I do not necessarily think that giving people access to their own super in times of acute stress is a bad idea in principle. But if the policy is going to be called compassionate, then it needs to actually be compassionate. It should provide appropriate tax treatment for amounts used for essential medical treatment, and it should not flow through to reduce income tested family payments. At the moment, every agency involved gets to claim that the problem belongs to another agency, and the family wears the cost.
### The Letters
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.
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. That is not a description of a compassionate system. It is a description of a system where each component has been designed in isolation, and where no one has been given the remit, or the incentive, to look at the result.
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 was the most egregious and insulting of all. It defended a design choice without ever addressing the interaction effect that I had specifically written to raise.
### A note on the broader context
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. Posting this publicly is not an attack on the individuals involved. It is an attempt to make the structural problem visible enough that someone with the authority to fix it takes an interest.
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.
This whole sorry saga belies a complete failure of joined up thinking across all of these systems. I am rapidly coming to the point where I ask what the point of our "world class health system" is when it thinks a better outcome is to stop a girl from playing sport, or to force her parents to use a mechanism that they have to dig into their own pockets for, after paying into the system a rather massive amount via tax. If we had gone with the public option, I can guarantee you that the comorbidities it would have caused would have made it much more expensive down the road, both for my daughter and for the system.
Perhaps this public post will make it easier for these bureaucrats to understand that their part of the system is not the only piece. It is the interactions between the pieces 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 personal loan, because that would have cost me less than the tax and lost benefits combined.
### 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. The link is on the Department of Health and Aged Care website. If you are a policy analyst inside government, and you have read this far, then the question to take back to your branch 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. 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.
@ -161,37 +195,3 @@ Kind regards,
Jill McKay Jill McKay
Chief of Staff Chief of Staff
### The Letters
Read together, the three letters 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.
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. That is not a description of a compassionate system. It is a description of a system where each component has been designed in isolation, and where no one has been given the remit, or the incentive, to look at the result.
### A note on the broader context
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. Posting this publicly is not an attack on the individuals involved. It is an attempt to make the structural problem visible enough that someone with the authority to fix it takes an interest.
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.
## 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 have received letters from the Health Minister's office and the Treasurer's office, and both lay the blame on the other. The Minister for Social Services did not even bother to respond.
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.)
The outcomes here cannot be sustainable. I do not necessarily think that giving people access to their own super in times of acute stress is a bad idea in principle. But if the policy is going to be called compassionate, then it needs to actually be compassionate. It should provide appropriate tax treatment for amounts used for essential medical treatment, and it should not flow through to reduce income tested family payments. At the moment, every agency involved gets to claim that the problem belongs to another agency, and the family wears the cost.
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 was the most egregious and insulting of all. It defended a design choice without ever addressing the interaction effect that I had specifically written to raise.
This whole sorry saga belies a complete failure of joined up thinking across all of these systems. I am rapidly coming to the point where I ask what the point of our "world class health system" is when it thinks a better outcome is to stop a girl from playing sport, or to force her parents to use a mechanism that they have to dig into their own pockets for, after paying into the system a rather massive amount via tax. If we had gone with the public option, I can guarantee you that the comorbidities it would have caused would have made it much more expensive down the road, both for my daughter and for the system.
Perhaps this public post will make it easier for these bureaucrats to understand that their part of the system is not the only piece. It is the interactions between the pieces 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 personal loan, because that would have cost me less than the tax and lost benefits combined.
### 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. The link is on the Department of Health and Aged Care website. If you are a policy analyst inside government, and you have read this far, then the question to take back to your branch 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.