Legislation was recently introduced into Parliament paving the way for more SMSF retirees to access the Commonwealth Seniors Health Card (CSHC) which is a valuable concession that provides access to cheaper healthcare and other discounts. The change to the legislation means that a single person earning less than $90,000 a year adjusted taxable income (ATI) or couples earning less than $144,000 ATI a year will be able to access the health card. Currently, the thresholds are $61,284 ATI a year for a single person and $98,054 ATI for couples therefore, the increase in the thresholds are material and will mean more retirees will be able to access the CHSC card.
To qualify for a CHSC card a person must:
· Be Age Pension age (66.5 yrs) or older
· Meet the residence rules
· Not in receipt of a payment from Centrelink or Department of Veterans Affairs
· Meet identity requirements
· Meet the income tests (changing to $90,000 ATI for a single person and $144,000 ATI for a couple).
What is Adjusted Taxable Income (ATI)
· Taxable Income
· Total net investment loss on assets such as shares or real estate
· Target foreign income
· Employer provided fringe benefits
· Reportable employer superannuation contributions (RESC).
Importantly, since 2015, Services Australia deems a portion of a person’s account-based pension to generate income even if that pension is in retirement phase.
Note that the criteria to qualify for a health card are different to those that apply for the age pension which uses an asset test assessment process.
What are the benefits of a CHSC?
· Cheaper medicine under the Pharmaceutical Benefits Scheme (PBS)
· Bulk billed doctor visits
· Refund for medical costs when the Medicare Safety Net is reached ($717.90 for 2022).
If you would like to know more about the changes or how we can help you reach your financial goals, contact Symmetry Accounting & Tax Pty Ltd today.
