9 December 2022

Changes to Commonwealth Seniors Health Card eligibility could save you thousands

| Dione David
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Senior Australian women selects medication of the shelf at a pharmacy

The Government estimates about 50,000 additional older Australians will be eligible for the Commonwealth Seniors Health Card following its increase to income tested thresholds. Photo: File.

About 50,000 additional older Australians could be looking at savings of around $3000 per annum, and some of them might not know it.

This is the number of people estimated to be eligible for the Commonwealth Seniors Health Card (CSHC) following the Government’s income test threshold increase.

RSM Canberra Financial Advisor Chris Oates said analysis showed it could amount to about $3000 annually for some older Aussies.

“As we get older, we can start to have quite a lot of medical expenses,” he said.

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“Some seniors might be paying $30 to $50 regularly at the chemist each time they need a script filled. Some of the more complex medications can be even more expensive – $80 to $100 or even more.

“If you have the Commonwealth Seniors Health Card and your medication is on the Pharmaceuticals Benefits Scheme that amount gets reduced to $6.80. And when you reach a certain safety net, it’s free.

“As you can imagine, that represents potentially substantial savings for people; we estimate about $3000 per annum.”

Other benefits include access to certain bulk-billed benefits that some people on higher incomes typically miss out on.

RSM Canberra Financial Advisors Chris Oates and Lindsay Walker. Standing by Lake Burley Griffin

You may be missing out, say RSM Canberra Financial Advisors Chris Oates and Lindsay Walker. Photo: Thomas Lucraft.

As of November 4 this year income limits dictating CSHC eligibility increase from $61,284 to $90,000 for singles, $98,054 to $144,000 for combined couples and $122,568 to $180,000 for couples separated by illness.

RSM Canberra Financial Advisor Lindsay Walker said that even with these substantially increased thresholds, eligible people may be missing out.

He said people with pensions exceeding these amounts should not automatically assume ineligibility, as there are a number of mitigating factors to consider.

“For starters, there’s no assets test affecting your eligibility for the Commonwealth Seniors Health Card. It’s based solely on your adjusted taxable income,” he said.

“That said, the Government is adding deeming to account-based pensions. Once you’re retired you don’t have a group certificate and account-based pensions don’t appear on tax returns, so to be fair the formula to see whether you fall under the threshold is your adjusted taxable income plus deeming.

“Older retired public servants on a PSS (Public Service Superannuation) or CSS (Commonwealth Superannuation Scheme) with incomes above the CSHC threshold may also be mistakenly assuming they are ineligible. They should be mindful that PSS and CSS have different taxable components, and only a portion of it may count as ‘taxable income’.”

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Lindsay said depending on which defined benefit pension a person was on, they might be surprised that for the purposes of the CSHC income eligibility test, they qualified.

“This change means for people on higher incomes who normally miss out, when they take everything into consideration they might get a positive outcome,” he said.

“Anyone near this threshold who is doing this calculation for themselves should consider reaching out for advice.”

Lindsay said with the mounting cost of living pressures, having more retirees on the CSHC was the right move for a caring society.

“I do think it was a review that was overdue,” he said.

“And if you think about it, it’s not a major cost to the Commonwealth. We’re not talking hundreds of millions. Yet it could make a real difference for our senior citizens as they grapple with inflation.”

Contact RSM Canberra if you require advice on eligibility for your Commonwealth Seniors Health Card.


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