Senior Partner, Sovereign Wealth Partners.
There’s an attractive gift for self-funded retirees hidden in legislation ready for parliament’s consideration at the next setting. Many more will become eligible for the Commonwealth Seniors Health Care card and get significant savings on escalating healthcare costs.
This gift is well timed with inflation now estimated at 7% and no offsetting wage growth for retirees. Interestingly its genesis was a Liberal party election promise that was matched by Labor during the Federal election campaign in May.
As it stands, the Commonwealth Seniors Healthcare Card is available to Australians over 66 and a half and who meet the income test, irrespective of work status. The card gives access to cheaper prescriptions, bulk billing of many doctor visits and significant refunds of health costs incurred over the Medicare safety net. For card holders, that safety net is set at a reduced level of $717.90 per annum, per person.
If the legislation passes, there’s to be a 46% increase in the income eligibility threshold, raising it to $90,000 for singles and $144,000 for couples. The income test includes any earned income plus deemed income from all financial assets including superannuation and pensions. As an approximate guide for retired Senior Australians, the card should become available to single persons with financial assets under $4m and couples with financial assets under $6.4m. The value of the home is ignored.
Speak to your adviser for more details.