Understanding financial advice
Financial life goals
Tools and resources
Products and services
Investing with IOOF
Your retirement goals
Understanding super & money
By Stuart Sheary, Senior Technical Manager
For discounts on medicines, utilities, council rates and more, many retirees wish to hold a concession card. These cards are typically income tested and clients may be looking to confirm their eligibility as well as the benefits that come with the card.
This article will look at the eligibility and benefits of the top three cards as well as strategies to obtain and retain the cards.
The three most popular concession cards are:
There are others such as state-based seniors’ card which generally becomes available to those aged 60 and not working full time.
Self-funded retirees of age pension age may be eligible for the commonwealth seniors health card (CSHC). Card holders are eligible for various discounts and concessions such prescription medicines at concessional rates through the Pharmaceutical Benefits Scheme (PBS). See ‘Benefits across cards’ table.
In addition to being age pension age to get the CSHC card, clients must also:
The income test threshold is indexed annually on 20 September. The threshold is also increased for each dependent child by $639.60 per year. There is no asset test for this card.
The low-income health care card (LIHCC) may also be available to self-funded retirees. To be eligible for the LIHCC clients must be:
To be eligible, client’s gross average weekly income for the 8 weeks prior to claim must be below maximum income thresholds which will vary depending on whether your client is single, a member of a couple or have dependent children.
Upon receiving or renewing the LIHCC, your client’s assessable income must remain below 125% of income limits in any rolling eight-week period. If it reaches these thresholds (outlined below), your client must notify Centrelink within 14 days.
Ordinary income for social security purposes is assessed for the LIHCC. Ordinary income can include income not captured as taxable income such as ‘deemed income’.
Strategies to assist with the income test for Age Pension purposes can assist clients to qualify for the low-income health card. See table ‘Assessment of income’ below.
The LIHCC is issued for 12 months and Centrelink will contact clients towards the end of this 12-month period to remind them to renew their card.
To renew their card, your client’s income must not exceed the maximum gross income to qualify within the 8-week assessment period. This period is assessed between 4 and 12 weeks before card expiration. This period will be identified on the renewal form.
Social security pensioners (Age Pensioners, Disability Support Pension, Carers Pension and DVA service pensioners) will automatically receive a Pensioner Concession Card (PCC). Some long-term income support recipients (continuously received a payment for at least 39 weeks) over 60 receiving an allowance such as JobSeeker Payment may also receive a PCC. See Social Security Guide - Qualification for PCC for an expanded list of eligible recipients.
Clients who lost their age pension entitlements on 1 January 2017 due to changes to the asset test taper rates can be entitled to an indefinite PCC as no means testing applies.
A PCC is issued for 2 years and reissued around the time of the cardholder’s birthday, provided they continue to qualify. If a cardholder loses their social security benefit, they are generally required to stop using the PCC.
Adjusted taxable income + deemed income on account-based pensions (non-grandfathered)
Adjusted taxable income include:
Deemed income from account-based pensions (non-grandfathered).
Examples of ordinary income includes:
Types of ordinary income that affect a recipient's payments can be found on the Social Security Guide website
In addition to ordinary income the following are also assessed:
Details of other income assessed are available on the Social Security website
Eligibility under the income test is typically based on income in the most recently completed tax year. If a tax notice of assessment (TNA) is not available for the most recently completed financial year, then the TNA for the earlier financial year can be used. Income estimates for the current financial year can be provided in limited situations.
Acceptable events include reduced income due to retirement, an increase in taxable income due to withdrawals from various sources to fund medical and health care services, transition to assisted living and to cover certain costs associated with natural disasters.
Gross average weekly income for the 8 weeks prior to claim must be below the following thresholds.
14 days upon breaching 125% rule
14 days of change of circumstance
Common benefits across cards include:
The concessions and benefits extend beyond medical expenses. Card holders can get discounts on utility bills, council rates, car registration as well as cash rebates on energy bills. These benefits can vary across cards and states. The table below ‘Card benefits across states’ provides a good starting point on entitlements.
Another benefit of holding the card is that clients can become eligible for ad hoc Government stimulus measures or incentives. For example, as part of the Government’s COVID-19 Economic response card holders received two lump sum payments of $750 in 2020.
Dependants can be added to the PCC and LIHCC and receive discounted benefits. Dependants cannot automatically be added to the CSHC and they are not eligible for any discounts associated with the card unless they apply and are accepted separately.
The table below provides a good starting point for clients wishing to identify available benefits and concessions.
New South Wales
Victoria Families Fairness and Housing
Tasmanian Government Discounts & Concessions
COTA Northern Territory
As income and eligibility is assessed differently across cards the following table may assist in identifying strategies to make the various cards become available.
Add a reversionary spouse to a grandfathered ABP
*It will be necessary to check with the product provider to confirm they can add a reversionary pensioner without commuting the original pension
Yes – ABPs that automatically revert will retain their grandfathering
(provided the surviving spouse is receiving an eligible pension at time of reversion)
Concession card holders can benefit from many discounts ranging from medical costs to utilities and travel. Identifying available cards and their associated benefits has the potential to save your clients a substantial amount of money.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
DisclaimerThe information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.