The Commonwealth Seniors Health Card

The Commonwealth Seniors Health Card (CSHC) has become something of a prized possession to Australian retirees. If you meet the income test for a CSHC you will gain access to discounted prescription medications, greater access to bulk billed medical appointments, full refund of medical costs (for those who have met the Medicare safety net) and depending on your state or local government area, lower electricity and gas prices, discounted property and water rates, and public transport. 

If you weren’t previously eligible for a CSHC, now is the time to re-apply. In late 2022, the government announced (or rather quietly whispered) some fairly significant changes to the income test threshold, and to how income is worked out for this purpose when it comes to superannuation. 

To meet the income test, you must earn less than the following:

  • $90,000 a year if you are single (previously $61,000)
  • $144,000 a year for couples (previously $98,000)
  • $180,000 a year for couples separated by illness, respite care or prison.

When it comes to how ‘income’ is defined, there are two components:

  • Adjusted taxable income, plus
  • An amount relating to superannuation pensions. 

Adjusted taxable income is basically the taxable income shown on your income tax return with the addition of some extras such as superannuation contributions and losses made on investments. 

The amount relating to superannuation in an SMSF is known as ‘deeming’ for account-based pensions that stated on or after 1 January 2015. Deeming amounts are a percentage of the account balance at the start of the year. The percentage is 0.25% up to a threshold ($56,400 for singles, $93,600 for couples) and then 2.25% thereafter. 

For example, a person with a $1.5m account-based pension in their SMSF would have a deemed income amount from that pension of:

0.25% x $56,400 + 2.25% x ($1.5m – 56,400) = $32,622

In previous years, this amount may have meant you were close to the income test threshold so any other income from other non-superannuation sources would likely have put you out of the running for a CSHC. 

Remember there is no assets test for the CSHC - that means you could have enormous accumulation amounts or substantial assets without impacting your CSHC eligibility. 

If you have believed yourself ineligible for the CSHC or have previously been knocked back, these changes are likely to make a difference to the outcome should you choose to re-apply.