Legislation* increasing the income limits for the Commonwealth Seniors Health Card (CSHC) has passed and received Royal Assent, which means the new income limits will be effective from 4 November 2022.

Family situation Income limits 20/09/22 to 3/11/22 Income limits 4/11/22 to 19/09/23
Single $61,284 $90,000
Couple (combined) $98,054 $144,000
Couple (illness separated) $122,568 $180,000
For each additional child $639.60 $693.30

 

The government estimates that approximately 50,000 additional older Australians will be eligible for the card.

Both the legislated increase in income limits, plus frozen deeming rates of 0.25% and 2.25% that apply to deemed account based pensions, will assist more clients to be eligible for the card.

Many older Australians who are self-funded or partially self-funded retirees, are unable to qualify for the Age Pension. However, the CSHC Card is not asset tested. The CSHC Card is income tested, however income is assessed generously. For example, Account Based Pension income is deemed so there is a large discrepancy between what you may be drawing as pension income and what Centrelink is deeming you to receive.

Benefits of the CSHC Card
  1. Cheaper medicine under the Pharmaceutical Benefits Scheme (PBS) – any medicine on the PBS list will generally only cost around $6.80 (as at 01/01/2022 ) if you have a concession card.
  2. Bulk Billed Doctors’ visits (depending on your GP)
  3. Refund for medical costs when you reach the Medicare Safety Net. That is once your out-of-pocket medical costs are more then $717.90 in a year, then you will receive back 80% of out of pocket costs or the EMSN benefits caps for out of hospital services
  4. Depending on where you live you may also receive discounts on electricity and gas bills, property and water rates, health care costs (ambulance, dental and eye care) and public transport.

How is the Income test Calculated?
The income test counts your adjusted taxable income plus a deemed amount from account based pensions.

For example
May and Bob have $30,000 of bank interest each year (taxable income). They also have $1.7 million each in Account Based Pensions. The deemed income on the Account Based Pension is $37,314 each. Therefore, their total assessable income for the Card is $104,628 ($30,000 + $37,314 + $37,314). As they are under the new income test limit of $144,000 for a couple, they will qualify for the CSHC Card from 04/11/2022.

Other criteria
If you qualify based on income, you must also qualify on age. You must be Age Pension age. This is now age 66.5 for those born 01/07/1955 – 31/12/1956 inclusive. If you are born on or after 01/01/1957, then you will have to wait until age 67. If you qualify based on age and income, then ensure you also check the residence and identity requirements.

Many of our clients make large savings on their scripts each year because of being CSHC Card holders. With the new legislation being passed, many more Australians will qualify. Even if you are not on much medication now, getting the Card is a good way to future proof in case your health deteriorates. With the cost of living increasing daily, any savings you can obtain by using the Card are well worth while.

We are here to help
If you would like to find out if you are eligible, please feel free to contact me, or give our Wealth Management team a call on (07) 4154 0400.

Alternatively, you can check your eligibility by going online to Services Australia.

 

Sources 

  1. https://www.pbs.gov.au/info/about-the-pbs#:~:text=From%201%20January%202022%2C%20you,payment%20by%20up%20to%20%241.00.
  2.  https://www.servicesaustralia.gov.au/what-are-medicare-safety-nets-thresholds?context=22001
  3.  https://www.servicesaustralia.gov.au/deeming?context=21966#howwe

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