The federal government has introduced a wide range of stimulus measures in the aftermath of COVID-19, but one group that appears to be overlooked is self-funded retirees. However, if they know the way the system works, there is still one strategy that may be well worth pursuing. That is to apply for a Commonwealth Seniors Health Card (CSHC).
The criteria are simple. You must be of age pension age but not eligible to claim an age pension, and you must pass an income test. There is no asset test. The income test is $55,808 per annum for a single and $89,290 per annum combined for a couple. The income used is Adjusted Taxable Income ( ATI) plus deemed income from financial assets. Thanks to the changes in the deeming rates, which came into effect last month, a couple with almost $4 million in financial assets could be eligible for the CSHC and all the benefits that go with it.
The easy way to check if you qualify, is to go to my website www.noelwhittaker.com.au and use the Deeming Calculator. You will discover that assets of $2.5 million for a single person will provide a deemed income of $55,214 a year, which is just under the cut-off point, and for a couple it is just on $4 million. These are the amounts you can have across all your financial assets, such as superannuation, bank accounts, shares and managed funds.
The obvious question is whether the CSHC is worth having. It varies somewhat from state to state, but one benefit to all holders is that medicines listed on the Pharmaceutical Benefits Scheme (PBS) are supplied at the concessional rate. Once you reach the PBS safety net, you will usually be supplied further PBS prescriptions without charge for the remainder of the calendar year. It may also be possible to save on your medical consultations, if your doctors are happy to bulk bill. And, depending where you live, there could be a regional travel card, and rebate on your energy costs.
The cream on the cake is that applicants who receive the card before July 10 will receive a one-off $750 stimulus payment. If the economy tanks in October - as many economists are predicting due to the planned cut-off of JobKeeper, JobSeeker and all the repayment holidays - there may well be more stimulus payments.
National Seniors Chief Advocate Ian Henschke said this week: "The deeming rate is still too high but it's so great to see it's helping people. Some who couldn't get a part pension might be eligible and others will now be able to get a CSHC and a bit of cash. I urge them to go online and apply, and also while online consider becoming a National Seniors member or a supporter."
It's been a tough year for retirees, with dividends slashed or suspended, stock markets around the world plunging, and rents vanishing if you are a landlord. This is why any assistance you can get is worth going for. Depending on your situation, the CSHC could be worth over $6000 to you. I urge readers to check their eligibility without delay, and apply immediately if eligible. For further information, visit the Commonwealth Seniors Health Card section of the Services Australia website.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. firstname.lastname@example.org