The Pension Concession Card helps with the cost of some living expenses like prescription medicines, medical services and more1.
But in January this year, changes to the Age Pension assets test saw 330,000 retirees on the part pension have their entitlements reduced, and about 100,000 of those lose their entitlements altogether.2
The good news—the January changes are being reversed
In this year’s budget the government proposed to remove the income and asset tests for the card. Meaning if the latest budget passes legislation in full, the card will be reinstated in July 2018 and those who lost eligibility from the assets test in January, will get their card back next year.
Below are some of the ins and outs – what’s changed and how it could affect you. But remember, at this stage it’s not yet law and could change as legislation passes through parliament.
No asset test, but there are new requirements
While there won’t be an income or asset test for the card, there will be other requirements.
Currently, to be eligible for the Age Pension or Disability Support Pension you must have 10 years of total Australian qualifying residency, which must include at least one period of a minimum of five years of continuous residency3.
It's proposed that from 1 July 2018 you’ll need to have:
- 15 years of continuous Australian residency
- 10 years of continuous Australian residency, with five of those years between the ages of 16-65, or
- 10 years of continuous Australian residency without having received an activity-tested income support payment (eg Newstart) for a cumulative period of five years.
It’s also proposed that people who’ve qualified for an income support payment will receive a one-off payment of $75 for singles and $125 for couples, to help with their energy bills.
The Commonwealth Seniors Health Card and Low Income Health Card
If passed, the new law will affect the cards which originally replaced the Pension Concession Card. Those who lost access to the pension card in January 2017 were instead given:
- a non-income tested Low Income Health Care Card (LIC), and
- a non-income tested Commonwealth Seniors Health Card (CSHC) – which provided access to hearing services and certain concessions if over the pension age.
From next year, the LIC will be deactivated. But the new proposal does let non-pensioners keep their CSHC, so they continue getting the energy supplement. However, they won’t get the one-off energy assistance payment.
Overall it’s good news
If the proposal to remove the income and assets test of the Pension Concession Card is passed by parliament, more people will be eligible and will again have help with their living expenses, including medical and energy costs.
Where you can get help
To understand how the reinstatement of the card could directly affect you, we recommend you contact Centrelink.
And If you’d like to discuss the changes and their impact on your retirement goals with an adviser, give us a call today.