If you are 67 or older and not yet qualified for a Commonwealth Elderly Health Card (CSHC), you may be eligible from July 1.
Indeed, during the election campaign, both parties promised to significantly increase the income threshold above which access to the card is cut off.
The table below describes the new situation: The government estimates that 50,000 additional people will now be eligible for the card.
“It’s a substantial increase and means a lot of people who just missed out will be eligible,” said John Goldie, director of Paramount Financial Solutions.
Currently, singles and couples cannot get a card if they earn more than $57,761 and $92,416 respectively.
The new limits will be $90,000 and $144,000 respectively.
Obtaining the card entitles you to bulk billing at many medical clinics and means you can get many prescriptions listed in the Pharmaceutical Benefits Scheme from just $6.60 per script.
There is no assets test on the CSHC, but your superannuation will have deemed income attached, which will contribute to the income test.
The presumptive rate will be frozen for the next two years at 0.25% for the first $53,600 of assets for a single person and for the first $89,000 for a couple.
Above these figures, income will be deemed to earn 2.25% per year.
The table above shows how many assets outside your home you will be able to hold and still be eligible for CSHC.
How did you get it?
Although no law has yet been passed to provide more generous income limits, the Services Australia website note that they are coming.
“I would ask immediately because these things are usually backdated when legislation is passed,” Mr Goldie said.
You can apply in two ways. The easiest is probably to visit Centrelink and apply directly.
But for many people, that’s not an attractive option, as it could mean waiting in a long line and possibly being exposed to COVID-19 or the flu while you’re in the office.
The other option is to go online and fill out the forms directly or print them out and mail them.
Fill the forms
Like many official forms, those related to CSHC can be intimidating, but if you follow the instructions, you’ll get the hang of it.
A potential stumbling block with the form, however, is how you report your income.
The form asks for your estimated taxable income, but for many retirees their only income will be a super pension, which is not taxable.
You therefore do not need to report super pensions here.
However, if you have a part-time job, you must declare your income at this stage.
And if you have investment property or other investments that pay income, you must also report that in this part of the form.
The form will direct you to another form – SA 330 – if you answer that you have superannuation income.
So complete this one if you have a super pension or an annuity. Centrelink will establish deemed income from this amount and use it to establish your eligibility.
The deeming provisions of the CSHC only apply to pensions and annuities. If you have other assets, these will be measured only by the income they produce.
If you have vacant investment property or stocks that do not pay dividends, this will not limit your eligibility, as no deemed income will be imputed to them.
“You can have enormous wealth and still qualify for CSHC, which raises social equity issues in my view,” said Paul Versteege, policy officer at the Combined Pensioners and Superannuants Association.
Annuities can be an advantage when it comes to claiming CSHC.
Indeed, only 60% of their value, for fixed-term annuities, or no value, for life annuities, will be subject to the presumption.
There are many sweeteners added to CSHC depending on where you live. State and territory governments offer cardholders a number of additional benefits.
These range from rebates on energy and transport to the colossal sum of $1,660.60 in sweeteners from the Government of Western Australia.
For many people, there is also strong emotional value in getting the card.
“The senior card has almost become a symbol for some people,” Mr Versteege said.
“They say, ‘I may not get the pension, but I get something from the government’.”