Have you been putting off completing an application for the Age Pension or Commonwealth Seniors’ Health Card?
If so, it’s important to start planning now, because the treatment of certain income streams for the eligibility tests are undergoing significant changes from 1 January 2015. The reason many of our clients consider eligibility to be quite important is not always to do with the payments, but because they are concerned about the cost of medicines without a concession card.
Currently, income from an allocated or account-based pension doesn’t count at all for the Commonwealth Seniors’ Health Card (CSHC) tests, and account-based pension income receives a significant deductible amount that reduces the assessable income to the point that it’s often zero.
From 1 January 2015, these income streams will have a deemed income applied to them. The rates and threshold at the moment are 2.0% pa for the first $48,000 of capital and 3.5% pa for capital above $48,000. This could mean that you’re no longer eligible for the Age Pension or Commonwealth Seniors’ Health Card.
If you act quickly though, there are some options that may help you obtain and retain eligibility into the future such as:
- Allocated or account-based pensions that are established and make a payment before 1 January 2015 can retain treatment under the old rules
- Purchasing an annuity which pays a regular income can reduce income test assessments
- Investing in insurance or education bonds may help CSHC eligibility
We work with Centrelink assessments, tax and income streams every day of the week – so if you need a hand making sense of it all we can help you make your way through the various options and select one that’s right for you.
With changes taking effect from 1 January it’s a good idea to start planning sooner rather than later so give us a call on (02) 6247 1233 or email email@example.com to book an obligation free appointment today.