Qualifying for the Commonwealth Seniors Health Card



The Commonwealth Seniors Health Card (CSHC) provides self-funded retirees and workers over pension age with concessions on prescription medicines and a range of other benefits, such as:

  • Bulk-billed doctor appointments (at the doctor's discretion).

  • Lower PBS Safety Net threshold.

  • Concessions on health, transport and education costs provided by state governments.

  • Retail discounts and concessional rail travel on some services.


In order to ensure that people with similar incomes are treated consistently, account based pensions are included in the CSHC income test in the same way as non-superannuation financial investments. The income is calculated using Centrelink’s deeming rates, not the actual payments received from the account based pension.


Who is eligible?


The CSHC is available to those who have reached Age Pension age but do not qualify for a payment from Centrelink or the Department of Veterans’ Affairs.


Singles are eligible for a CSHC if their annual income is less than $54,929. For couples combined, the limit is $87,884. Account based pensions are included in the calculation of this income.


For a single person relying entirely on financial investments for their income, the first $51,200 of their investments is deemed to earn 1.75% per annum, and any amount above this, 3.25% pa. At these rates, a retiree can have total financial investments of up to $1,678,984 and be eligible for the card.


For a couple, and assuming investments are split reasonably evenly, the first $85,000 is deemed to earn 1.75% pa and the remainder 3.25% pa. So combined, a couple will need to have less than $2,687,723 in financial assets to qualify.


Be aware that figures quoted may not be so clear cut. Other factors can come into play when determining eligibility, including which year’s income Centrelink will apply the test.


Watch out


Current holders of a CSHC who go overseas for more than 19 consecutive weeks will lose the card. On their return they will have to apply for a new one.


Another aspect to be cautious of is that deeming rates can change. If the cash rate increases so may the amount of deemed income. Card holders who are close to the income thresholds may lose their cards.


Seek advice


While it is possible to construct financial strategies that can help people qualify for a CSHC, these may be detrimental to their long-term financial position. It is therefore important to talk to us by calling 1300 707 955 or emailing info@cpfinancialplanning.com.au so we can examine your overall situation, and advise on the best course of action.




Sources:

Department of Human Services website www.humanservices.gov.au “Commonwealth Seniors Health Card”

Department of Human Services website www.humanservices.gov.au “Deeming”

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