Many retirees are missing out on thousands of dollars in valuable benefits simply because they are unaware of their eligibility for the Commonwealth Seniors Health Card (CSHC). Even high-net-worth individuals with assets exceeding $10 million could qualify for this generous government benefit.

What Is the Commonwealth Seniors Health Card?

The CSHC provides significant discounts on healthcare and medical expenses for self-funded retirees who meet the eligibility criteria. Currently, around 500,000 retirees already hold the card, but experts estimate that over 1 million eligible retirees are not claiming it.

The card’s primary benefits include:

• A 75% discount on the cost of prescription medicines under the Pharmaceutical Benefits Scheme (PBS).
• A lower Medicare safety net threshold, meaning out-of-pocket medical expenses are reduced sooner.
• Additional state-based concessions in some regions, including discounts on energy bills, council rates, car registration, and public transport.

How Much Is the Card Worth?

On average, a single retiree saves approximately $3,000 per year in healthcare costs. Over a 20-year retirement period, that translates to $60,000 in total benefits—potentially more than $90,000 if you live in Western Australia, South Australia, or New South Wales, where additional state-level discounts apply.

Why Are So Many Missing Out?

A key reason many retirees overlook the CSHC is a significant change in the income test for eligibility, introduced on November 20, 2022:

• The income threshold increased from $57,761 to $99,025 for singles.
• For couples, the threshold jumped from $92,416 to $158,440.

However, not all income is counted toward this threshold. The government uses an adjusted taxable income calculation, which excludes several common income sources.

How to Qualify – Even with Millions in Assets

Many self-funded retirees can legally structure their finances to qualify for the CSHC by reducing their assessable income while maintaining a comfortable retirement lifestyle. Key strategies include:

1. Leveraging Deemed Income Rules
   • The government doesn’t assess actual investment returns on account-based pensions. Instead, they apply deeming rates, which significantly understate the income.
   • A retiree with the maximum $1.9 million in an account-based pension would have their deemed income assessed at just $41,500—far below the $99,025 limit.
   • Additional assets held in accumulation superannuation (which doesn’t produce taxable income) do not count toward the income test.
2. Using Lifetime Annuities
   • Income from certain lifetime annuities (especially those sourced from superannuation) is not included in the CSHC income test.
   • A strategic partial conversion of an account-based pension into an annuity can help retirees meet eligibility requirements.
3. Structuring Non-Income Producing Assets
   • Assets such as art, classic cars, or holiday homes are not included in the income test.
   • If structured appropriately, these assets allow retirees to maintain wealth while still qualifying for government benefits.

Additional Benefits by State

The value of the CSHC increases significantly in certain states where additional concessions apply:

• Western Australia: Estimated total additional benefits of $32,440 over retirement, including discounts on council rates, water bills, car registration, and driver’s licences.
• South Australia: Additional estimated benefits of $11,540.
• New South Wales: Additional estimated benefits of $5,000.

Unfortunately, residents of Victoria, Queensland, and Tasmania receive only the health-related benefits ($3,000 per year) without extra state-based concessions.

Take Action – Don’t Miss Out

If you’re a self-funded retiree—or planning for retirement—it’s worth reviewing whether you qualify for the Commonwealth Seniors Health Card.

Given the generous income test and the ability to legally structure finances to remain under the threshold, even retirees with substantial wealth could be eligible.

For personalised guidance on how to maximise your entitlements while maintaining an optimal investment and retirement strategy, speak to your financial adviser today.