Ask The Expert: More people are eligible for a Seniors Health Card – here’s how to apply

Nurses are set to play a bigger part in delivering health care to patients around the country.

Nurses are set to play a bigger part in delivering health care to patients around the country. Photo: Getty

  • Question 1: With regard to ‘deeming’ and the aged pension – I’m confused. I can find nothing to which deeming rules are applied to rental income from an investment property. Is that the case? Is this income treated as actual net amount?

Deeming is used by Centrelink so simplify the assessment of financial investments. These investments include:

  • Cash
  • Bank accounts
  • Term deposits
  • Shares
  • Managed funds
  • Superannuation once over age pension age
  • Account-based income streams.

Rental income from an investment property, though, is treated separately.

The net income received from an investment property is assessed under the income test.

Generally, the rules for assessing income from real estate are the same as the tax rules and the latest tax return is used. However, some items that are deductible for tax purposes are not deductible for social security purposes. These include:

  • Capital depreciation and development costs
  • Establishment loan fees
  • Offsetting of losses between rental properties.

If a tax return is not available (for example, in the first year of renting a property), Centrelink will allow the rental income to be reduced by a minimum of one-third to cover expenses, plus a deduction is allowed for interest costs.

Another point worth noting is that if the net income from your property is negative (i.e. you are negative gearing), the income recorded for social security purposes is nil. Unlike tax, where you can have a negative figure that reduces your other taxable income.

Commonwealth Seniors Health Card

  1. My friend Roger has $500,000. Is he eligible for a pension or seniors health card? He is single and has severe arthritis, heart fibrillation and memory loss.
  2. We are a couple. I am aged 72 and my husband 75. Are we entitled to the senior health care card or are our assets assessable?
  3. When can you apply for a Commonwealth Seniors Health Card?

I am receiving lots of questions in relation to the Commonwealth Seniors Health Card (CSHC) as per the above three questions.

The CSHC assists with healthcare costs and a limited number of concessions offered by government bodies and certain private companies.

To be eligible for the card you must be age-pension age (or service pension age for DVA) but not receiving the age or service pension. If you were in receipt of the age pension you would receive the Pension Concession Card.

There is no asset test, and the income test rules have been recently relaxed, and it is now very generous.

The income test takes into account your taxable income plus deemed income from your account-based pension (superannuation income stream).

For singles you are eligible under the income test if annual income is below $90,000, and if a couple if below $144,000.

Putting that into perspective, if you are single and earned $60,000 per annum and had an account-based pension of over $1.3 million you would still be eligible for this card under the income test.

For new applicants, income is generally determined by the financial year immediately prior to the year of application.

If new applicants have not received their prior year income tax notice of assessment at the time an application is lodged, the notice from two years prior will generally be assessed.

Where a change to income levels can be demonstrated (eg due to retirement, illness or certain other one-off events) an estimate may be supplied to Centrelink.

You can apply here via Services Australia.

  • Question 3: If my husband or myself had to go into a nursing home, roughly how much would we have to pay as we have approximately $200,000 in assets and own our home, worth about $400,000.

That’s a far more complicated question than you may think.

Firstly, you have to be eligible to enter into an aged-care facility (nursing home), as your costs would be subsidised somewhat by the government.

The costs and amounts would be different depending on whether one or both of you had to move in. You always must be left with some assets.

Another variable is the facility and the rooms themselves. Each facility must disclose the maximum daily accommodation cost and the refundable accommodation deposit.

These will differ not just from facility to facility but within each facility there will be different room types (single or shared, own bathroom, size of room etc).

The My Aged Care website is the best place to start for information and guidance. They provide information not only on aged-care homes but short-term help and help at home.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

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