Good news for SMSF retirees and access to the Commonwealth Seniors Health Card (CSHC)

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.