“I am "Age Pension" age and can’t get any Centrelink entitlements because I have too much money.”

I hear this statement quite a lot. Although in some situations it is true. I find more often than not – there is always some potential benefits clients can obtain from Centrelink, even those who think they have too many assets or income.

The entitlement I am referring to is the Commonwealth Seniors Health Care Card.

This - as quoted from the Services Australia website gives access the card holder access to:

• Cheaper medicine under the Pharmaceutical Benefits Scheme
• Bulk billed doctor visits - this is up to your doctor
• A refund for medical costs when you reach the Medicare Safety Net.

This card is generally available to those who are of age pension age and can’t get an age pension due to their asset level or income level. There are other criteria also however I am going to focus on the asset/income part.

This entitlement is means tested, however it only looks at the income part of your situation, it ignores all your assets.

I have an example below of someone who is age pension age, significant level of assets but still eligible for the Commonwealth Seniors Health Care Card.

Client: Bob

Date of Birth: 28/04/1957 (67)

Assets:

• Principal Residence = $1,000,000
• Car = $20,000
• Contents = $10,000
• Deemed account based pension: $2,000,000

Income:

• Retired and drawing $100,000 per annum from the account based pension.

Now the income limit as at the time of writing is $95,400 a year for singles, $152,640 a year for couples or $190,800 a year for couples separated by illness, respite care or prison.

So on face value it looks like Bob has too much income. However, Centrelink won’t actually consider any income he draws from the pension as income. This is essentially because it isn’t taxable and comes from a “deemed” account based pension that isn’t grandfathered for Centrelink purposes. Therefore Centrelink will apply their own deeming rates to the account based pension which at the time of writing falls well under $50,000 a year of “deemed income”. As I said before, they ignore the asset values, (so they ignore his home, his car, his contents and the asset value of the account based pension). Therefore based on this his only income is the deemed income which falls under the $95,400 per year limit which means he will be entitled to the card. Where as previously he thought he won’t be eligible for anything as the upper threshold for the age pension for a single home owner is only $674,000 of assets (excluding the home you live in).

If you think you might be eligible – please speak with a Financial Information Services officer from Centrelink which is a free service. Or if you think you would like some personalised financial advice around your situation. Feel free to get in touch with myself – a licensed financial adviser.