Changes to Commonwealth Seniors Health Card and Aged Pension from 1st January 2015

During 2014, legislation has been passed to include superannuation pension income in the assessment for the Commonwealth Seniors Health Card and the Aged Pension. Morrows had discussed these changes in Morrows Insight and with 1 January quickly approaching, we would like to provide you with another reminder to consider your situation.

Changes may affect your eligibility to the Commonwealth Seniors Health Card

From 1st January 2015, superannuation pensions will be deemed to earn a certain rate of income and this income will be included in the assessment for the card. This could affect your entitlement to the Commonwealth Seniors Health Card from that date onwards.

What does this mean to you?

If your superannuation benefits are in pension phase and you currently hold the Commonwealth Seniors Health Card or receive a Centrelink payment (e.g. Age Pension), existing arrangements in place will not be affected.

MOST IMPORTANTLY:

If you have not yet registered for the CSH Card and/or your benefits are not yet in pension phase and you are eligible (see details below for guidance) – contact Morrows immediately. Taking action NOW means that you will receive and retain your Health Card in the future.

Commonwealth Seniors Health Card

The Commonwealth Seniors Health Card is available to those aged 65 and over, who are not receiving any Centrelink entitlements, such as the Age Pension. The card provides valuable concessions on health-care costs such as PBS prescriptions and travel costs. Furthermore, the card may enable you to benefit from stamp duty concessions (state-based).

To qualify for the card, your adjusted taxable income needs to be less than the following:

Category                                                                  Income (per annum)^

Singles                                                                     $51,500

Couples (combined)                                                 $82,400

Couples separated by illness (combined)                $103,000

^ ATI limits increase by $639.60 per annum for each dependent child you care for.

Adjusted taxable income includes the following:

• Taxable income
• Reportable (tax deductible) superannuation contributions
• Foreign income
• Total net investment losses
• Employer-provided benefits

Currently, income received from superannuation held in pension phase is excluded from the income assessment for the purposes of determining your eligibility for the card.

Age Pension

Currently income from superannuation pensions receives concessional Centrelink treatment. From 1st January 2015, new superannuation pensions will be deemed to earn a certain rate of income and this deemed income will be included in your Centrelink assessment. This could affect your Age Pension entitlements.

Who will be affected by the changes?

Not sure if this applies to you? You may be affected by the above changes from 1st January 2015 if you are:

• Entitled to the Commonwealth Seniors Health Card and have not yet applied;
• A holder of the Commonwealth Seniors Health Card and have not yet commenced a pension from your superannuation benefits;
• Currently in receipt of the Age Pension and have a Self-Managed Superannuation Fund;
• In receipt of the Age Pension and assessed under the income test; or
• Over age 65 and have not yet commenced a pension from your superannuation benefits.

If any of the above is applicable to you, Morrows Private Wealth may be able to assist. Please contact us as soon as possible as the changes apply from 1st January 2015 and we need to ensure any changes are assessed by mid December 2014. Should you require assistance, please contact Jessica Salliss or Sara Luck on (03) 9690 5700.