Why does everyone love the CSHC?

The card gives holders access to cheaper prescription medications, greater access to bulk billing for medical appointments (depending on the doctor), and a full refund of medical costs for those who have met the Medicare Safety Net. In fact in some states and local government areas, holding the card can even mean lower electricity and gas bills, property and water rates, and public transport.

Sounds great, how do I get it?

It’s only available to people above age pension age (currently 66½ but increasing to 67 from 1 July 2023) who meet an income test in that their income is below a particular threshold. (Note that there is no assets test.)

It’s not necessary to be eligible to receive the age pension or any other benefits – many people who hold the CSHC aren’t eligible for any other government benefits.

And so.. what’s exciting?

There are two important things to know about the income test:

1. The threshold has recently increased. A lot.
2. There are some quirks in the way “income” is worked out for this purpose when it comes to superannuation.

In most cases, the CSHC income test threshold is now $90,000 per annum for single people and $144,000 for couples (they measure their combined income against this single threshold). But the thresholds have only been this high since November 2022. Before that they were around $61,000 and $98,000 respectively.

So for a start, a lot more people are likely to be eligible than was previously the case.

When it comes to how “income” is defined, there are broadly two components:

• an amount known as “adjusted taxable income”, plus
• an amount relating to superannuation pensions.

For most people “adjusted taxable income” is pretty much the taxable income shown on their income tax return plus some extra amounts such as certain superannuation contributions and losses made on investments.

And remember, there is no assets test for the CSHC. That means:

• members could have enormous accumulation accounts with no impact on their CSHC,
• they could even be withdrawing substantial amounts from these accumulation accounts each year (or from their pensions),
• they could even have substantial other assets such as holiday homes etc that don’t produce income – there would be no impact on their CSHC.

For a change that was ushered in quietly right at the end of last year, this one is a gamechanger.