Senior cards offer savings for many aged 60 and over 😊
Nearly 50,000 senior citizens have been guaranteed savings that could add up to thousands of dollars each year.
Within hours of this week’s announcement of changes to the eligibility rules for the Commonwealth Seniors Health Card by the government, the opposition agreed to match the plan. So, regardless of who wins the May 21 federal election, the changes will be passed.
And the benefits will be locked in for at least two years if the Coalition’s promise to freeze Centrelink’s deeming rates is also matched by the Labor Party.
Presently, the Commonwealth Seniors Health Card (CSHC) is limited to those singles over the pension age who earn less than $57,761 per annum and couples with a combined $92,416 per annum.
Both major political parties have agreed to increase the threshold to $90,000 per annum for singles and a combined $144,000 for couples. Centrelink regards couples as a single entity when calculating benefits and concessions – in other words, all of that income could be generated by one member of a couple.
At the very least, the CSHC will get you a significant discount on Pharmaceutical Benefits Scheme (PBS) listed drugs at $6.80 per script, capping out at $326.40 per annum.
That concession alone could save you thousands of dollars a year.
Depending on which state you live in, the CSHC combined with a state government-issued Seniors Card might also get you discounts on other services as well. (Refer to the section at the end of the article for each State’s eligibility and discounts available)
In Queensland for example, seniors receive rebates on electricity of up to $340 per year, and in Western Australia seniors holding both cards get the same discounts as a pensioners, including hefty discounts on local government charges and water supply. Almost all states provide discounts on public transport and other state government services and charges. Some doctors will also bulk-bill seniors holding a CSHC. (See more discounts offered for Seniors Cards in your State)
While the rules vary from state to state, state seniors cards are issued to residents aged 60 or more who generally work 20 hours or less per week.
Thousands of eligible seniors don’t have the CSHC, simply because of common misunderstandings about how Centrelink calculates income. As a rule of thumb, the CSHC is issued to those seniors who miss out on an age pension because of means testing. There is no asset test for the CSHC, but there is an income test.
Actual cashflow is disregarded completely.
It is the source of the money that counts and even that springs up some surprises.
All money withdrawn from conventional super funds is completely ignored.
That includes regular drawdowns from your account-based pension accounts and all lump-sum withdrawals, no matter how much.
Money held in super accumulation phase is ignored completely. It only comes into account when you move it into retirement phase, typically as an account-based pension or ABP.
And this is where the Coalition’s election promise of freezing the deeming rates for the next two years comes into play.
Money in an ABP is captured under the complicated deeming rate system. This is similar to the methodology used by Centrelink to calculate Centrelink assessable income to determine entitlements for pensioners under the income means test.
Under the system, the first $53,600 of a single’s ABP investments is deemed to be earning 0.25 per cent per annum. For couples, that 0.25 per cent deemed rate of return applies to the first $89,000 of their combined ABP investments, For singles and couples, all amounts above these limits is deemed to be earning 2.25 per cent.
It means that a single who has maxed-out the amount they can transfer into an ABP under the transfer balance cap rules to $1.7m would have Centrelink deemed income from their ABP of $37,178 per annum. That’s well under the current CSHC limit of $57,761 and way under the proposed limit of $90,000.
For couples as always, the numbers are even better.
Sidenote: The Commonwealth Seniors Health Card (CSHCC) also entitles you to get the Economic Support Payments and the recent Cost of Living Payment. Such as the $750 paid from March 2020 and July 2020, $250 paid from December 2020 and March 2021 and the recent $250 one-off Cost of Living payment.
For more information on your State’s eligibility, card benefits and how to apply – Visit our Seniors Card insights page here
– Senior cards offer savings for most of us. The Australian. 9 May 2022 by Nick Bruining.Read more
– SuperGuide. Your simple guide to state Seniors Cards: How they can save you money. 7 January 2022 by Janine Mace. Read more
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