As you navigate the golden years of retirement, managing finances becomes a crucial aspect of maintaining a comfortable lifestyle. For many Australian retirees, every dollar counts, and finding ways to stretch the retirement fund is a constant pursuit.
It’s surprising, then, that over one million are missing out on a significant opportunity to save thousands of dollars through a little-known Centrelink benefit because of a lack of awareness.
This benefit you might be missing out on is Centrelink’s Commonwealth Seniors Health Card (CSHC). It is a gem in the realm of retiree benefits, offering access to cheaper healthcare and a range of state-based discounts that can ease the burden of expenses such as electricity, rates, public transport, and other bills.
Yet, despite its value, many retirees are unaware of their eligibility for this card, which is designed for those who have reached the pension age of 67 but are not receiving Centrelink payments like the age pension.
The absence of an asset test for the CSHC makes it an attractive option for many, with only an income test to navigate. Retirement Essentials has crunched the numbers and estimates that the savings from the card can be as much as $3,000 a year for a single person. Over 20 years, this could amount to a staggering $60,000 in potential savings, assuming one lives until 87.
James Coyle, the chief customer officer at SuperEd, has highlighted the scale of this missed opportunity, estimating that up to 1.5 million self-funded retirees are not receiving the CSHC, with only about 500,000 taking advantage of it.
‘Some of these will have high incomes from rental properties, shares, etc so may not be eligible but a conservative calculation would be in the order of one million self-funded retirees that could be eligible that are not receiving it,’ he told The Australian Financial Review.
The underutilisation of the CSHC may stem from a lack of awareness regarding recent changes to the income test. Legislation has been passed to significantly increase the income thresholds for the card over the last few years, with the test being reviewed annually in line with the Consumer Price Index.
From September 20, 2024, the income thresholds will rise to $99,025 for singles and $158,440 for couples combined.
Services Australia assesses eligibility by considering both your adjusted taxable income and a deemed amount from account-based income streams. This means that the government uses a deemed income, which is often less than the actual income, in the test.
For instance, someone with a maximum of $1.9 million in an account-based pension would be deemed to earn around $41,500, comfortably below the $99,025 threshold for singles. This deeming approach can make a significant difference in eligibility for the CSHC.
If you suspect you might be eligible for the CSHC, it’s worth exploring the eligibility and income rules further and considering making a claim.
To summarise, you can get a CSHC card if you meet all the conditions below, per Services Australia:
- Must have reached age pension age,
- Must meet residence requirements,
- Must not be receiving an income support payment from Centrelink or the Department of Veterans’ Affairs,
- Must provide a Tax File Number or qualify for an exemption,
- Must satisfy identity verification requirements, and
- Must meet the income eligibility criteria.
The benefits are tangible: CSHC cardholders can access medicines for just $7.70 a script under the Pharmaceutical Benefits Scheme, with an annual cap of $277.20, after which medicines are free for the rest of the year.
Moreover, cardholders may also enjoy bulk billing doctor visits, though this is at the discretion of the doctor. State-based discounts can also add up, with potential savings on utilities, property rates, healthcare costs, and public transport.
Challenger’s research indicates that residents in Western Australia, South Australia, and New South Wales could gain an extra $32,440, $11,540, and $5,000, respectively, in benefits over their lifetime.
While age pension recipients are not eligible for the CSHC and instead receive a Pensioner Concession Card, the CSHC remains a valuable resource for those who qualify. It’s a reminder that staying informed about available benefits can make a significant difference in retirement living standards.
We at YourLifeChoices encourage retirees to share their cost-of-living stories and experiences with the CSHC. Have you taken advantage of this card, or were you unaware of its potential savings? Share your thoughts in the comments below.
Also read: Centrelink offers up to $6,548 extra cash for Australians—check if you qualify!
I just called AGL to register my CSHC and was told they are not eligible it must be a health card associated with a pension card.
Yes, this card is only used for a very limited number of discounts in some states. The main purpose of the card is cheaper meds and Medicare safety net is lower.
To add to the above I also rang the local council and got the same answer. The health care card alone dose nit count for these discounts. You must have a pension card or be on a vet affairs pension.
Misleading headline. Commonwealth Seniors Health Card is not a benefit. It is a card only, not a payment.