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Written by Ivan Fletcher – Senior Adviser
The CSHC provides self-funded retirees with discounted health costs and various concessions from Australian, state and territory governments. The CSHC is valid for 12 months and is reissued on 1 August each year provided the CSHC holder continues to meet the eligibility criteria.
To qualify, you must:
- Be an Australian resident, living in Australia,
- Have reached age pension age but DO NOT qualify for a Centrelink or Veteran Affairs pensions/benefits,
- Be under the INCOME TEST threshold.
WHAT ARE THE BENEFITS FOR CSHC HOLDERS
- Cheaper medicine under the pharmaceutical benefits scheme
CSHC holders pay a maximum of $6.60 for each medicine listed on the PBS.
When a CSHC holder reaches the PBS safety net threshold ($316.80 for CSHC holders), their medicine will be free for the remainder of the calendar year.
Bulk-billed doctor visits, however, this is at the discretion of the doctor. Doctors receive higher payments from Medicare if they treat a CSHC holder, therefore some practices which do not bulk bill for a general patient may bulk bill for a CSHC holder.
- A bigger refund for medical costs when you reach the Extended Medicare Safety Net
threshold for out-of-hospital medical expenses. Out-of-pocket costs count towards this threshold throughout the calendar year. When a CSHC holder reaches the concessional EMSN threshold ($697.00 for CSHC holders), they are entitled to be refunded the lower of 80% of the out-of-pocket costs or the EMSN benefit cap for that medical item.
- CSHC holders receive discounts for stamps and mail redirection from Australia Post.
- CSHC holders receive various concessions from state and territory governments, however, they vary between each state and territory but may include discounts on some of the following :
- Electricity and gas bills
- Property and water rates
- Health care costs, including ambulance, dental and eye care
- Public transport
- A person who was the holder of the CSHC on the 19 September 2016 and continuously thereafter is entitled to receive the Energy Supplement: Single $14.10 per FN and for a Couple $10.60 per FN each.
ELIGIBILITY CRITERIA – IN DETAIL
- Australian Resident
CSHC holders can travel outside Australia temporarily without having their CSHC cancelled provided the period of absence is 19 weeks or less.
2. Reached Age Pension Age – But DO NOT qualify for income support payments from Centrelink or Department of Veteran Affairs such as the age based pension or service pension.
3. Income Test Requirements
To qualify for the CSHC, a person’s Adjusted Taxable Income (ATI) plus deemed income from certain account-based income streams must be less than the income threshold. The income threshold depends on whether a person is single, a member of a couple or a member of an illness separated couple:
Income Test thresholds – Per annum
Single $ 57,761
Couple $ 92,416 (combined)
Couple illness separated $115,522 (combined)
The income thresholds are increased by $639.60 for each dependent child in the person’s care.
Adjusted taxable income – Includes ALL of the following :
- taxable income – usually taken from the prior years tax return (notice of assessment)
- reportable superannuation contributions (including salary sacrifice, and additional employer contributions above the Super Guarantee level of 10%);
- total net investment losses (including net rental property losses);
- foreign income (tax-exempt foreign income and income from sources outside Australia which tax is not paid); and
- employer provided fringe benefits exceeding $1,000.
- Deemed income from non-grandfathered account-based pensions,
Account-based Pensions / income streams
Since 1 January 2015, account-based income streams have been DEEMED to earn an income for the CSHC income test unless the grandfathering provisions apply. The balance of a person’s account-based income streams which are not grandfathered will be deemed and added to their ATI.
Account-based income streams which are grandfathered will not be assessed for the income test.
Grandfathering provisions :
A person must meet the following conditions for the grandfathering provisions to apply:
- The account-based income stream must have commenced before 1 January 2015, AND
- the person must have been a holder of the CSHC on 31 December 2014 and continuously thereafter.
Existing Grandfathering Will Cease :
- If a person with a grandfathered account-based income stream ceases to be a holder of the CSHC for any period of time since 1 January 2015, OR
- If a person rolls over an existing grandfathered account-based income stream to a new account-based income stream, the grandfathering provisions will not apply to the new account-based income stream.
If a grandfathered account-based income stream reverts to a reversionary beneficiary, the grandfathering provisions will continue to apply if the beneficiary was a holder of the CSHC on the date of reversion and continuously thereafter.
Income Test Exemption
On 1 January 2017, there were changes to the assets test taper rate and thresholds for Centrelink and DVA. Pensioners who lost their entitlement and therefore, the Pension Concession Card as a result of the changes, were automatically issued with the CSHC without the income test requirement. These pensioners were also entitled to receive the Energy Supplement provided they continued to meet the eligibility criteria. From 9 October 2017, these pensioners were reissued with the PCC without an income and assets test and were able to retain the CSHC and the Energy Supplement.