Commonwealth Seniors Health Card… who is eligible?

Who is eligible?

To be eligible for the Commonwealth Seniors Health Card (CSHC), an individual must:

  • be residing in Australia
  • be an Australian citizen or a holder of a permanent residency visa or a holder of a Special Category Visa
  • have reached Age Pension age (currently 66) or pension age for veterans who have qualifying service (currently 60)
  • not be receiving a Government pension or a benefit or an income support supplement from the DVA
  • quote their tax file number (and partner’s tax file number if applicable), and
  • have income below the income test threshold.


Important: CSHC holders who also meet the Low Income Health Care Card (LIHCC) requirements can qualify for and retain both concession cards.


Income test

Eligibility is based on Adjusted Taxable Income (ATI), plus deemed income from certain account based pensions.  The relevant year for income is usually the tax year immediately preceding the current tax year. Income includes:

  • taxable income
  • foreign income
  • total net investment losses
  • employer-provided fringe benefits
  • reportable superannuation contributions, and
  • deemed income from account based pensions unless the grandfathering rules apply.


Change of circumstances

Changes must be communicated to Centrelink within 14 days. This includes where the annual income exceeds the prescribed amounts, or where a new account based pension is commenced.


Assessment of account based pensions

Account based pension payments received from a taxed source are classified as non-assessable and non-exempt income where the person is aged 60 and above. Therefore, these payments are not captured under the definition of ATI when determining eligibility for the CSHC.

Instead, deemed income from non-grandfathered account based pensions is added to the person’s ATI and then assessed against the income test threshold to determine eligibility for the card. Deemed income is calculated by assuming the account based pension (or cumulative pension balances if applicable) is the only financial investment  of the person (or couple).


Grandfathering rules

Account based pensions commenced prior to 1 January 2015 are grandfathered and are excluded from the assessment if the individual:

  • held the CSHC immediately before 1 January 2015, and
  • has continuously held the CSHC from 1 January 2015.


Account based pensions commenced from 1 January 2015 are subject to deeming. In the event of the cardholder’s death, an account based pension will retain its grandfathered status in the hands of a reversionary beneficiary only, so long as the beneficiary is also a CSHC holder at the time of reversion.


Automatic entitlement for certain individuals

On 1 January 2017, the pension assets test thresholds and taper rate changed. Clients who lost entitlement to the Age Pension or DVA Pension and therefore the Pensioner Concession Card (PCC) due to the rule changes were automatically granted the CSHC. These individuals will continue to be eligible for the CSHC indefinitely regardless of their income in the future.



Because eligibility is based on ATI, the deprivation rules do not apply. Therefore, gifting does not impact an individual’s eligibility to hold the CSHC.


Renewal of CSHC

Once issued, the card is valid for 12 months (subject to ongoing eligibility – see ‘Change of circumstances’). The card is renewed in August each year, provided the individual continues to meet the eligibility requirements.


Travelling outside Australia

If a CSHC holder temporarily departs Australia, they can continue to hold the card for up to 19 weeks before it is cancelled. The Department of Human Services should be notified prior to departure and the person will need to re-apply upon return. If an absence from Australia is permanent in nature, entitlement would cease on the day of departure.


Cardholder benefits

  • Cheaper medicine under Pharmaceutical Benefits Scheme (PBS)
  • Access to PBS prescriptions, generally without charge, for the remainder of the year after reaching the PBS Safety Net
  • Bulk billed doctor visits at clinic’s discretion
  • Low out-of hospital medical expenses through the Medicare Safety Net
  • Energy supplement (ES) if applicable3 ▪ Certain State, Territory and Local Government concessions. These concessions can vary based on the State or Territory


Determining ‘income’ for the Commonwealth Seniors Health Card

Danny is 68 and wishes to apply for the Commonwealth Seniors Health Card (CSHC).

His wife Dawn is aged 58. Both are retired. Their income in the reference year includes:

  • Both: Pension payments from account-based pensions (both taxed funds)
  • Danny: defined benefit pension from an untaxed fund
  • Both: Rental income from an investment property
  • Both: super accumulation funds (100% taxable), and
  • Dawn withdraws a single lump sum from super accumulation of $30,000 for a holiday.


What income will be subject to assessment under the income test when determining whether Danny is eligible?

a) Rental income, the defined benefit pension, deemed income from Danny’s account based pension and taxable income from Dawn’s account-based pension.

b) Rental income and defined benefit pension only.

c) Rental income, the defined benefit pension and deemed income from both of the account-based pensions and Danny’s accumulation fund

d) Rental income and deemed income from both of the account-based pensions, defined benefit pension and the accumulation interests.


Answer is a)


This is because:

  • rental income is taxable income
  • untaxed income from the defined benefit pension is taxable and is therefore captured in the taxable income definition
  • Danny’s account-based pension is not grandfathered, so income is deemed
  • Dawn is under age 60, so taxable income payments from her account-based pension are accounted for in the taxable income assessment (her pension isn’t deemed until she turns 60), and
  • the $30,000 withdrawal from Dawn’s super is assessed as taxable income, even though a tax offset ensures she doesn’t pay tax on the amount (up to her low rate cap).


Assessment of income for the CSHC

Eligibility for the Commonwealth Seniors Health Card (CSHC) is assessed based on:

  • adjusted taxable income (ATI), plus
  • deemed income from certain account-based pensions.


Adjusted taxable income includes:

  • taxable income
  • foreign income
  • total net investment losses
  • employer-provided fringe benefits, and
  • reportable superannuation contributions.


Income doesn’t need to exceed the tax free threshold to be included for this assessment.

Deemed income from an account-based pension is assessable unless the grandfathering rules apply. Grandfathering only applies where the account-based pension was commenced before 1 January 2015 and the pension recipient held the CSHC on the same date and has done continuously since that time.

Amounts not included in the income test include super withdrawals under the compassionate grounds- coronavirus condition, First Home Super Saver super withdrawals and certain income accepted to be ‘one-off’ in nature (see ‘estimates of income’ below).

Note: If a person was receiving a grandfathered account-based pension and Age Pension, but has lost eligibility for Age Pension, their ABP will not be grandfathered for CSHC purposes. Also, CSHC was automatically granted (without an income test) to Age Pension recipients who lost their entitlement on 1 January 2017 when the Age Pension asset test limits were reduced.


Which year is used to assess eligibility?

Centrelink assess income based on the ‘reference tax year’ which is usually the financial year immediately prior to application. The person will use their Notice of Assessment to substantiate their income. If they haven’t yet received this, the preceding year is assessed.


Estimates of income

Estimates of income may be accepted where the person can demonstrate that there has been a significant change of circumstances, meaning their reference tax year doesn’t provide an accurate indication of ongoing income. This might be accepted for example where:

  • a person has just retired and doesn’t expect any ongoing employment income
  • a highly unusual economic event has caused a significant loss in taxable income, or
  • a withdrawal from superannuation has occurred to pay for one-off costs for certain medical and health related expenses.


What are the current income limits?

The income limits are reassessed each 20 September. To meet the income test, from 20 September 2020 you must earn no more then the following:

  • $55,808 a year if you’re single
  • $89,290 a year for couples
  • $111,616 a year for couples separated by illness, respite care or prison.


For a further explanation, please contact your Pinnacle Advisor.