Ahead of a tightly-contested election and in a bid to win the senior vote, both major parties have promised to expand the eligibility of the Commonwealth Seniors Health Card (CSHC) and freeze the social security deeming rates for 2 years if elected. The CSHC is a concession card that enables eligible seniors who have reached the age pension age to get cheaper health care and some discounts, while deeming rates are used to work out the income from financial assets when applying the age pension income test.
Currently, the CSHC is available to those individuals at the age pension age, which varies depending on the year you were born. For example, the age pension age for those born between 1 July 1955 to 31 December 1956 is 66 years and 6 months, and if your birth date is on or after 1 January 1957, the age pension age will be 67. Individuals applying for the card will also generally need to have been an Australian resident for at least 10 years in total (some exceptions apply) and earn less than $57,761 per annum (single) or $92,416 per annum (couples).
No assets test applies in relation to the CSHC, although any account based income streams will be taken into account through deeming.
The CSHC allows card holders to access cheaper medicine under the Pharmaceutical Benefits Scheme, bulk billed doctor visits (depending on the doctor), and a refund of medical costs when the Medicare Safety Net is reached. Eligible card holders may also receive discounted electricity, gas, property, and water rates, as well as other health care costs (ie ambulance, dental and eye care) and reduced public transport fares.
Both major parties have committed to increasing the income threshold for the CSHC from the current rates to “around $90,000” for singles and $144,000 for couples from 1 July 2022. It is projected by the Coalition that an extra 50,000 senior Australians would be eligible under this expanded eligibility in 2022.
The other measure targeted at senior Australians is the commitment of both parties to freeze deeming rates for 2 years, which is relevant to the eligibility of the age pension. Currently, for single individuals the first $53,600 of financial assets has the deemed rate of 0.25% per year and anything over $53,600 is deemed to earn 2.25% per year. For members of a couple (with at least one individual getting a pension), the first $89,000 of combined financial assets has the deemed rate of 0.25% per year. Anything over $89,000 is deemed to earn 2.25% per year. For members of a couple (neither on a pension) the first $44,500 of joint financial assets has a deemed income of 0.25% per year, and anything over $44,500 is deemed to earn 2.25% per year.
The deeming rate was lowered at the onset of the COVID-19 pandemic in 2020 and has largely been frozen to ensure more senior Australians are able to access the age pension and other Commonwealth support payments. The announcement by both Labor and Coalition mean that the current rates will remain the same until 2024 and is expected to benefit around 450,000 age pensioners and 440,000 other payment recipients.