ATO’s “compassionate grounds” withdrawal process needs drastic overhaul – ‘predatory’ clinic collapses with millions in withdrawn super

Supercare Dental and Cosmetics Tuggerah is in liquidation, with over A$2 million likely to never be paid back to hundreds of patients who paid upfront for treatment. The assigned liquidator this month found that there are compelling indications that the director moved “substantial” funds from business accounts into personal ones and related entities they controlled.

$2 million dollars gone

Over 330 unsecured creditors put in claims to the liquidator in the hopes to claw back money for treatments not provided, however, over A$2.1 million is unlikely to ever be retrieved. Reporting to the host of creditors, the liquidator said that while investigations are still ongoing, a combination of financial mismanagement, and potential statutory breaches were dominant in the resulting failure of the company.

On LinkedIn, Syma Usman lists herself as Managing Director at “Supercare dental & cosmetics”. The liquidator has shared that the preliminary investigation has shown the director had breached their legal duties, with the NSW Department of Fair Trading also informing them of similar precedent behaviour. The Department additionally suspects historical contraventions of Australian Consumer Law by Usman, her husband and the company.

The findings are stark. Part of the report reads, “At this stage, there are insufficient funds to meet the cost of the liquidation and accordingly, it is unlikely that a dividend will be paid in the liquidation to any class of creditors”.

“Poor corporate governance”

The increasingly concerning twists in Supercare Dental & Cosmetics’ operations has grown in impact, particularly as to how the now likely lost money was sourced. Of concern is that the administrator noted, months ago, that a significant portion of the money had originated from patient superannuation balances.

The group is reported as having five clinics in NSW, Corrimal, Tuggerah, Penrith, Kotara and Wilton, all operational under the Supercare Dental franchise name. As far back as April, Kotara and Tuggerah branches were put into voluntary administration. While the investigation is ongoing, numerous former employees have come forward sharing that they too are owed money in the thousands.

With behaviour deemed “suspicious” by the Department, and “mismanagement of the business and poor corporate governance” by the liquidator, further fallout is the way in which hundreds of Australians were able to pay substantial sums of money upfront to the clinic in the first place.

Staggering increase in withdrawn super

As evidenced by ATO records, the early release of superannuation for dental treatment has only shown an upward trajectory since 2018. From $66.4 million in 2018-2019, that figure has ballooned to eight times that amount in 2023-2024, standing at $526.4 million last year.

When questioned by the ABC, the ATO stated that access to super on compassionate grounds was only possible in “very limited circumstances”. Trish Gyler spoke to the ABC about her experience at Supercare Dental & Cosmetics Tuggerah, and the incredible ease it was to get the money out. But it is in what she alleges about Supercare’s role in helping her with the process that significant concern builds.

After she was quoted $43,000 for treatment, Gyler alleges the dental group then advised her on how to withdraw her superannuation from the ATO on compassionate grounds. She states that the process was, “way too easy” and ended up taking out $56,000.

“I felt like an absolute fool. I couldn’t believe that I had trusted these people.”

Gyler is not alone in being left significantly worse off in terms of super. She shares that she still lives with bad teeth but now has a drained superannuation balance, impacting her ability to plan and cover costs in her later years.

Impacts on aged care

With the liquidator strongly indicating that unsecured creditors are unlikely to receive any money back to due “insufficient assets”, people like Gyler are left in the lurch and for many, unable to retire or prepare for costs associated with the new pricing models for Support at Home and other aged care needs.

The story of the hundreds who had been able to withdraw money from their super on compassionate grounds throws the process of doing so squarely in the spotlight. While the ATO states that withdrawing under this allowance is “very limited”, the increasing stories from Australians like Gyler show a disturbing trend that many would argue opens up predatory tactics towards many Australians, particularly seniors.

With lowered superannuation balances, the impact to funding and ability for the sector to remain financially sustainable is brought to the fore. Increasingly as funding models show strain, providers across the sector struggle to be profitable and re-invest in maintenance, new beds and innovative care. Everything must be done to safeguard Australians and their super to meet the costs of aged care for themselves and the sector at large.