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Who is It For ?

For those self-funded retirees who do not qualify for the Age Pension.

Who is it NOT for ?

You are Not Eligible if you are receiving a Centrelink pension or benefit, a DVA Service Pension or Income Support Supplement;

What Can it be used for ?

  • cheaper prescription medicines through the Pharmaceutical Benefits Scheme 
  • various concessions from the Australian Government and state, territory and local Governments. 

What are the General Residence Requirements / Criteria ?

  • have reached pension age for Centrelink (currently 65.5 for men and women) or 
  • Department of Veterans’ Affairs (DVA) Service Pension (currently 60 for veterans) 
  • be an Australian citizen, a holder of a permanent visa, or a Special Category Visa 
  • holder and meet other residence requirements where applicable;
  • reside in Australia;
  • provide their tax file number.

Are there Travel Restrictions ?

Applicants are required to be in Australia at the time of claim, however once received, 

cardholders can travel outside Australia temporarily without having their CSHC 

cancelled providing the period of absence is 19 weeks or less

Is it Means Tested ?

Yes, it is subject to an Income Test  (but no assets test).

Your income needs to be under the following threshold :

Couple separated by illness (combined)

*  Income limits are increased by $639.60 for each dependent child in a person’s care. 

Exemption to Means Testing 

Where a person lost their Age Pension because of the 1 January 2017 assets test changes, they were automatically issued a non-income-tested CSHC.  These CSHC  holders are still required to meet the General Residence requirements mentioned above.


  1. Adjusted taxable income (ATI) 
  2. Deemed  income from account-based income streams (Pensions) 

1. Adjusted Taxable Income (ATI) 

ATI = Taxable income (per tax return)  plus the following add backs

  • reportable superannuation contributions (including salary sacrifice, personal 

deductible and additional employer contributions);

  • total net investment losses (including net rental property losses);
  • target foreign income (tax-exempt foreign income and income from sources outside Australia which tax is not paid on), and;
  • employer provided fringe benefits.

Proof  of ATI – If you do not have a tax return or Tax notice of assessment for the financial year prior to the year of claim  Centrelink/DVA will request other documentation to verify a person’s ATI.

2. Deemed Income –   Specifically for Account Based Pension (Allocated Pension) 

Under Age 60, APs are not deemed as they are still assessable via the Adjusted Taxable Income. 

Over Age 60 – Any Personal Pension Accounts are not taxable and instead are deemed to earn an income (unless grandfathering  provisions apply – see below) 

 Exemption  (Grandfathering provisions pre 1 Jan 2015)  
Where a person purchased an Allocated Pension (AP) before 1 January 2015 and that person was a holder  of a CSHC on 31 December 2014, deemed income from their AP will be exempt from the income test as long as:

they continue to hold a CSHC (without disruption) ; andthey retain the same AP.

Tips To Avoid the Loss of Grandfathering Provisions Don’t leave the country for more than 19 weeks  Don’t change Pension account providers or roll to a new pension product.

Deeming Rates 

Single PersonUp to $51,2001.75%
 Over $51,2003.25%
Couple (Combined) Up to $85,0001.75%
 Over $85,0003.25%

Example Case – Income Assessment

For example, Freddie is currently aged 66, single and does not qualify for the Age Pension under the Asset Test due to a holiday house he owns. He is working part time earning $35,000 per annum and also has an Account Based Pension worth $500,000. 

            Adjusted Taxable Income          $35,000

            Deemed Pension Income           $15,482

            Total Assessed Income           $50,482

            Single Threshold is $54,929 so  passes the Income test. 

Managing The Income  Test 

If you are close to the Income Test (above or below the threshold) it would be of value to discuss this with your adviser to look for avenues to reduce your Income calculation.  

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