Online at http://www.financialcareservices.com.au/newsletters/vol-1-ed-6
Newsletter Volume 1 Edition 6
Sent July 2011
Commonwealth Seniors Health Care Card
The Commonwealth Seniors Health Care Card featured in the Carbon Tax debate. The media proclaimed that ‘wealthy retirees’ would receive the same compensation as pensioners. Actually the Commonwealth had announced that Commonwealth Seniors Health Care Card holders were included among the groups to receive compensation.
So why the Commonwealth Seniors Health Care Card?
Pensioner Concessions were so envied by self funded retirees that many tried ‘to get on the Pension’ just to have the Pensioner Concession Card. Seniors would spend unwisely, gift lavishly and invest inappropriately to be entitled to as little as one dollar per fortnight of Age Pension and the coveted Pensioner Concession Card.
The Commonwealth realised that seniors could be better off by not depleting their assets or forgoing income just to be eligible for the Pensioner Concession Card. Also some retirees with very low incomes were excluded from the Age Pension by the impact of the Asset Test. Thus the Commonwealth reckoned that an overall economic and social benefit could be gained by offering the Pensioner Concessions to self funded retirees of moderate income.
Hence the Commonwealth Seniors Health Care Card.
Commonwealth funded Benefits
Commonwealth Seniors Health Care Card holders are entitled to the Concession Rates for PBS pharmacy items. They also receive the Seniors Supplement paid on a quarterly basis via Centrelink, currently $816 per annum for a Single person. The Seniors Supplement is intended to help with water and energy bills and replaces the previous ‘utilities allowance’.
Health care providers such as doctors and radiology practices often grant fee discounts to Commonwealth Seniors Health Care Card holders. Each practice has its own ‘rules’ regarding fee scales and discounts so Commonwealth Seniors Health Care Card holders need to ask about concessions.
Some doctors will ‘bulk bill’ Commonwealth Seniors Health Care Card holders for consultations during ‘standard office hours’; but evening and weekend appointments and consultations for ‘travel medicine’ are likely to be charged on a full fee basis.
Concessions from other providers
The Commonwealth Seniors Health Care Card does not provide entitlement to ‘Pensioner Discounts’ from State or local government fees and charges.
The Victorian government offers a Seniors Card to any Victorian resident who has attained age 60 years and is not actively engaged in the paid workforce for more than 35 hours each week. Seniors Card holders are eligible for significant concessions on metropolitan public transport.
Many small businesses give ‘seniors discounts’ when requested. To avoid offence to younger people and committed workers, the ‘seniors discounts’ are rarely offered but widely granted.
Eligibility for the Commonwealth Seniors Health Care Card
The Commonwealth Seniors Health Care Card is available for people who have attained their Age Pension Age and have an adjusted taxable income not exceeding $50,000 per annum for Single Person or $80,000 per annum combined for a ‘couple living together’. The adjusted taxable income limit for a ‘couple separated by illness’ is $100,000 per annum. These income limits are fixed in legislation and not subject to any form of indexation.
Who is a ‘couple at Centrelink’? was discussed in the April 2011 issue of Financial Care Services N
Age Pension Age is 65 years for females born after 1948 and all males. All females born before 1 July 1947 have now attained their Age Pension Age. Females born between July 1947 and December 1948 have an Age Pension Age of 64 years and 6 months.
When applying for the Commonwealth Seniors Health Care Card, recent retirees may use an estimate of their ‘taxable income’ for their first financial year as retirees.
The main groups of Commonwealth Seniors Health Care Card holders are the ‘wealthy retirees’ with substantial superannuation and/or income generating assets, and the asset rich but income poor seniors.
For example, the beach block occupied by the family ‘holiday shack’ could now be so highly valued by Centrelink that retirees of modest financial resources are excluded from the Age Pension by the Asset Test.
Applications for Commonwealth Seniors Health Care Card
Self funded retires may apply to Centrelink for the Commonwealth Seniors Health Care Card only after they have attained their Age Pension Age. Early applications will be rejected. In contrast, Age Pension applications may be lodged well in advance.
Centrelink require ‘proof’ of identity and Australian residency, that is, documentation to verify who the applicant is and that they are entitled to live in Australia and receive Commonwealth support. In addition, the verification of the adjusted taxable income estimate requires financial data including a recent Income Tax Assessment Notice. Remember Centrelink and the Australian Taxation Office cross check their data diligently.
The Application form for the Commonwealth Seniors Health Care Card is a ‘short form’ booklet. Help is available for people who are stressed by Centrelink forms. A consultation with Financial Care Services can be an opportunity to collate the client’s personal records and complete the Centrelink forms to apply for a Health Care Card, Pension or Carer payment.
About Us
Clients of Financial Care Services receive impartial confidential financial advice from an actuary. Financial Care Services is an independent professional financial advisory service which holds Australian Financial Services Licence number 299570.
Clients are charged flat fees for advice and assistance; no upfront commissions are accepted in respect of clients’ investments. Home visits and out of hours appointments are available to assist client families.
For more information call Christine on 9808 0338 or visit www.financialcareservices.com.au
Financial Care Services specialises in advising seniors through life’s transitions.
Remember, referring your clients for impartial professional financial advice enhances your profile and reduces the potential for later complaints.
Christine Hopper
Fellow of Institute of Actuaries of Australia
Director and Authorised Representative
Financial Care Services
Telephone 03 9808 0338
www.financialcareservices.com.au