Is the Commonwealth Seniors Health Card worth it and do we qualify?
The Commonwealth Seniors Health Card extends lower cost health and medical services enjoyed by government age pensioners to self-funded retirees.
Q: My retired husband, 71, believes we have too many assets for the Commonwealth Seniors Health Card and doubts it’s worth the effort of finding out. I am 64 and don’t yet qualify. He has $2.38 million in super, of which $2.2 million is in pension phase. I understand only super in pension phase counts towards the deeming test. On adjusted taxable income, he earns about $2500 in dividends (after franking) plus about $10,000 in bank interest a year. I work part-time and earn about $16,000 a year untaxed, plus dividends of $7000 after franking. I have $2.5 million in super, of which $880,000 is in pension phase. We have no major health issues, but who knows what the future holds? – Anne
A: The first thing to tell your husband is that the Commonwealth Seniors Health Card has no asset test. Eligibility turns on income tests and not asset wealth. On the figures you’ve given, Perth financial planner David McGregor says he could well qualify.
The Commonwealth Seniors Health Card income tests count two things: your adjusted taxable income, plus deemed income from any account-based pensions. Bethany Rae
McGregor, a director at Bruining Partners, puts it plainly: while he is right in one respect – you do have substantial assets – this isn’t the key test for card eligibility.
The CSHC income tests count two things: your adjusted taxable income, plus deemed income from any account-based pensions. Adjusted taxable income is broadly your taxable income with some items added back – like salary-sacrificed super, net investment losses and the like. Your husband’s $10,000 of bank interest simply counts as ordinary income. One wrinkle, though, is that franking credits are grossed up, so a $700 franked dividend counts as $1000.
By contrast, deemed income is based on a formula where Centrelink assumes your account-based pensions earn a set return – currently 1.25 per cent on the first $106,200 of a couple’s combined assets and 3.25 per cent above that – regardless of what it actually
Acccumulation-phase super is ignored by both measures, as is the family home so, of your combined $4.88 million, roughly $1.8 million sits in accumulation, invisible to the test.
As far as your pensions are concerned, because the CSHC income test for a couple is combined, your account-based pensions are added together and deemed. The only escape is grandfathering – a pension started before January 1, 2015 and held by a continuous cardholder since – which cannot help a new applicant, so your $880,000 is counted alongside his $2.2 million.
That makes your deemable pool $3.08 million. Applying the current rates – 1.25 per cent on the first $106,200, then 3.25 per cent on the remaining $2.97 million – the deemed income works out at roughly $98,000. Add your actual adjusted taxable income – about $39,000 once dividends are grossed up – and your combined assessable income is about $137,000, comfortably under the $161,768 couple threshold.
McGregor, running his own numbers, lands at $134,126 and the same verdict. “Even though you are not eligible, the couple test still applies,” he says. On his calculation, “your husband would be eligible for the concession card”. He sits more than $24,000 under the cut-off.
Three things to keep in mind. First, Centrelink works off your latest tax return and super statements, so the figures move with them. Second, the deeming rise that occurred on March 20, 2026 matters: after years frozen, the rates have risen twice, most recently to 1.25 per cent and 3.25 per cent. McGregor agrees future increases in the deeming rates could reduce the level of funds you can hold in your pensions and still get the concession card.
Third, at 64 you cannot hold the card yourself yet, but your husband can apply now, and you will qualify on your own account at 67. And if one of you were to die, the survivor is tested against the much lower single threshold of $101,105, which the income on these balances would exceed.
McGregor is blunt: “Those thresholds for a single person are pretty rough. They don’t give a lot more from the government than what a couple get. When we pay tax, we’re treated as an individual, but when we apply for social security, we’re a couple – the government cherry-picks.”
Regarding your husband’s doubts, for a healthy couple the card is worth modest money: its main benefit is cheaper Pharmaceutical Benefits Scheme medicines, where concession holders pay $7.70 a script against the $25 general rate. A couple filling 30 scripts a year might save about $500.
Where the card really earns its keep is the PBS safety net, which caps a concession holder’s medicine bill at $277.20 a year and then makes every script above that free for the rest of the year – so the card’s value climbs steeply if serious illness ever arrives.
Two Medicare extras do the same job. The card nudges doctors toward bulk billing (still their own call) and lowers your Extended Medicare Safety Net threshold. This is a separate net for out-of-hospital fees that doctors and specialists charge.
Once those fees hit $861 – about $1800 below the threshold for those without a concession card – Medicare refunds 80 per cent of future costs. There are state concessions too, such as the $200 NSW seniors energy rebate, aimed squarely at self-funded retirees who hold the card.
There is, however, a superannuation tax-related twist, when it comes to your pensions. While your husband’s pension is maximised at $2.2 million, your pension is different. Depending on the transfer balance cap when you started your pension, a significant proportion of the $1.6 million difference between your pension and your total super – perhaps $1 million – could go towards starting another pension.
The CSHC catch is that the money moved into the pension is then deemed, lifting your combined income, so the very step that saves tax could cost your husband his card. On McGregor’s estimate the saving could run to around $9000 a year, many times what the card is worth.
“Consider moving more funds into pension phase to optimise your overall position,” says McGregor. “With the tax savings, you can shout your husband a holiday instead.”
In other words, the quirk that helps him qualify is also a hint that money may be sitting in the wrong place. For a healthy couple, $9000 of tax saved comfortably beats a few hundred dollars of healthcare concessions.
John Wasiliev is a veteran SMSF specialist and has provided answers to readers’ questions on superannuation for decades. Have a super question you’d like answered? Email John at superquestions@afr.com