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Expanding Commonwealth Seniors Health Card eligibility

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By Aden Wilkins Ambitious Retirees

More Australians will now have support in the form of accessible healthcare thanks to changing legislation to the Commonwealth Seniors Health Card (CSHC) eligibility. The Commonwealth Seniors Health Card is a concession card for more affordable health care and discounts once you have reached Pension age. In assistance with the rising cost of living, from the 20th of September, it is estimated that a further 50,000 self-funded retirees will become eligible to access the CSHC. This change follows the Labor government’s election commitment to raise the CSHC income limit for both singles and couples.

Previously, the income threshold to determine eligibility for the card was $57,761 for single self-funded retirees, and $92,416 for couples. Subject to the legislation coming into effect, the new income thresholds for the card will be $90,000 a year for singles and $144,000 for couples.

Let us explain what these changes mean for you, what you need to know and how we can help.

So, what is the CSHC?

The CSHC provides eligible cardholders with access to cheaper medical prescriptions, bulk billed GP appointments, reduced out-of-hospital medical expenses and several other state and federal concessions. In Western Australia, the estimated benefit of the concessions is $1,660 per year.

Does this change affect me?

Individuals with an asset base of up to $4 million and couples with an asset base of up to $6.4 million may now be eligible recipients of the card.

How do I know if I’m eligible?

There are several criteria that need to be satisfied in order to qualify for a CSHC.

To be eligible an individual must:

  •  Have reached the qualifying age for the age pension;
  • Be an Australian citizen, or holder of a permanent visa, or a special category visa holder;
  •  Reside in Australia;
  • Not be receiving a Centrelink social security pension or benefit;
  • Meet the requirements of an annual income test based on adjusted taxable income plus deemed* income from account-based income streams.

*Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn.

The worked example below illustrates a couple who would now become eligible to receive the card.

Let us explain

  • A & B are both aged 75, retired and live in Australia;
  • A & B have a joint investment portfolio worth $1 million owned in their personal names earning $30,000 a year of taxable income;
  • A has an account based pension (commenced after 2015) worth $1.5 million;
  • B has an account based pension (commenced after 2015) worth $1.5 million;
  • The total value of their account-based pensions ($3 million) is subject to deeming;
  • The first $93,600 of assets is deemed at 0.25% ($93,600 x 0.25% = $234);
  • Anything above $93,600 is deemed at 2.25% ($2,906,400 x 2.25% = $65,394);
  • Their total annual income is then determined as: taxable income + deemed income (i.e $30,000 + $234 + $65,394 = total income of $95,628);
  • Under the previous threshold for couples ($92,416), A & B would not be eligible for the card. However, now that the threshold has increased to $144,000 for couples, they would become eligible card recipients.

Are you ready to apply?

To apply for the card you are required to complete the form on the DVA website and either submit it online or as a hard copy.

We understand that whenever a change like this occurs, it can be confusing to wrap your head around. If you think you are eligible or you would like support in applying, we encourage you to contact your adviser, or review the National Seniors’ Concessions Calculator provided in the link below.

The information provided on this site is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different and you should seek advice from a financial planner who can consider if these strategies and products are right for you.

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