Low-Income Health Care Card – The Forgotten Concession
As most retirees are aware, Centrelink’s Age Pension provides income support and access to a range of concessions for eligible senior Australians. Unfortunately (or fortunately), you may find yourself deemed too wealthy for an Age Pension entitlement.
Many retirees consider this the end of the road in terms of subsidising the costs of retirement, however, self-funded retirees may still be eligible for a Low-Income Health Care Card (LIHCC).
Whilst the Age Pension has both an Assets and an Income test, the LIHCC is income tested only. To qualify as a “low income earner”, your income must be below $556 per week as a single or $960 per week as a couple, during the eight-week period prior to applying for the card.
Examples of some of the types of income Centrelink assess, are as follows:
- Employment income
- Rental income
- Reportable super contributions (e.g. salary sacrifice)
- Deemed income from financial investments (e.g. bank accounts, investments and shares)
- Deemed income from Account-based Pension income streams
- Income from defined benefit income streams
- Lump sum payments – compensation, redundancy, leave, or termination payments
Should you be deemed eligible for a Low-Income Health Care Card you will find yourself eligible for multiple concessions on your everyday livings costs, including:
- Cheaper medicine under the Pharmaceutical Benefits Scheme (PBS)
- Concessions offered by private companies
- Energy and electricity bills
- State and Territory Government and local council concessions, such as:
- Car registration costs
- Water rates
- Health care costs including ambulance, dental and eye care
- Public transport costs
- Stamp Duty costs
Whilst having the LIHCC won’t boost your bank account balance, it will ease everyday spending and help you to free up additional funds to provide for your other needs and wants.
If you think you might be eligible for a Low-Income Health Care Card, give the team a call and we can review your circumstances.
Good Morning,
I have recently relocated from Melbourne to Brisbane and I am looking to buy a unit in Brisbane. I have been told that you assist with stamp duty if you possess a health care card. If this is true, what do I have to do to receive this benefit?
Hi Susan
Yes, some Centrelink concession cards provide stamp duty concessions which are different in each state.
When purchasing a home you will need to advise your conveyancer that you hold an appropriate card that provides the concession.
I trust that answers your question
Regards
Courtney
Hi is the low LIHCC the same as the centerlink HCC
Hi John
Centrelink have a number of different concession cards. They include;
– Pensioner Concession Card (PCC)
– Low Income Health Care Card (LIHCC)
– Commonwealth Seniors Health Card (CSHC)
Each have different eligibility criteria and benefits. The term Centrelink HCC is generally used interchangeably with LIHCC.
Being eligible for a low income health card and actually getting one are two very different things. If you are fully self funded and rely totally upon investment income like I do, the process is a complete nightmare. I know part pensioners who are also investors and they have a far easier time than I do claiming their $18,000 part pension compared to me who claims nothing from Centrelink but the low income card (which is effectively worth about $700 to me). And the more diversified your investments, the worse the process is. My renewal this year required well over 80 pages of supporting documentation that I had to collate or produce (over and above the actual renewal itself) including each and every single transaction across every single bank account in my name and the requirement to obtain manually produced holding and income statements from every single managed fund that I have an investment in. That is a huge amount of paperwork for just one person’s claim. It really is a nightmare and I have to wonder how many people just give up on this concession given that in many cases the practical benefits are quite small. I honestly can’t wait till I start to take my superannuation down the track – with that I will be over the income limit even at the minimum income stream draw-down rate and will have Centrelink out of my life permanently!
Hi Jonathan
Unfortunately stories like yours are not unique. Centrelink give priority to processing applications for the Disability Support Pension and the Age Pension which means card applications fall to the back of the line. As you have noted, this timing issue is further compounded when you do not have straightforward finances.
We find clients with simple finances see faster processing times.
All the best
Can you help me with a clarification?
I have a LIHC. My sole income is from an Account Based Superannaution Pension. I am under 60 years old. The amount I draw fortnightly is under the threshold to retain the LIHC.
If I draw out a lump sum now to pay unexpected expenses, does that amount get treated as income for assessment for the LIHC? I have to declare the lump sum to Centrelink, and pay some tax, but I am unsure what this would mean for the LIHC…
Hi Stephanie
The assessment of your superannuation income stream will depend on when you started it. Assuming you commenced drawing a regular pension after 1 January 2015, the balance of your superannuation is deemed to earn a specific rate of return regardless of what it actually does earn or what you draw in lump sums.
Based on what you have described, I cannot see this lump sum withdrawal impacting your eligibility for the Low Income Health Care Card. That being said, i’d be more than happy to chat over the phone and apply the rules more specifically to your circumstances.
All the best
Courtney Robinson
Hi
When completing the Centrelink online application for a LIHCC it doesn’t seem to ask about a SMSF (unless I am missing something). I currently have a SMSF which I won’t be accessing until I turn 60 in April next year therefore don’t currently have an income to declare from the SMSF. The SMSF is of course generating an income within the fund from both shares and a rental property. I have however declared 2 rental properties (outside the SMSF) which is my only source of income at present. Just not sure if I am declaring everything I have to to Centrelink.
Hi Wendy
Superannuation held in accumulation phase (not paying you a pension) is not assessed by Centrelink until you reach Age Pension age. As a result, questions in the Low Income Health Care Card application only ask for superannuation details if you have reached Age Pension age or you are drawing a regular pension.
I trust this answers your questions. If you need further assistance, please call our office on 03 5224 2700
Courtney
Thanks so much Courtney – this has been very helpful.
Is there an abbreviated method to calculate if your eligible for a Low Income Card. We are self funded and I assume the value of our income is via the deeming rate on the total amount of our investments, including the value of our Superannuation, Our only income is from some shares we hold, Bank Interest and our fortnightly Superannuation Pension payment.
Prior to the Govt changing the rules to include Super as part of our Income, we did have the card. For a number of years we have been spending down our savings considerably.
It is a lengthy process that requires a lot of information and effort, don’t want to waste my time if we are not some where near being eligible.
Hi Stuart
There is no abbreviated way to determine your eligibility for the Low Income Health Care Card.
However, based on current deeming rates you might be able to quickly rule yourself out if your have financial assets over $2,300,000. Financial assets may include superannuation, shares and bank accounts.
This assumes you are a couple who have reached Age Pension age.
Feel free to call our office on 03 5224 2700 if you’d like to explore your eligibility in more detail.
All the best
Courtney
Hi..just recovering from a knee surgery and have had to give up part of my job cause I no longer can do it..so my income has halved..also have been battling leukemia since 2013..and so far winning..still on chemo tablets tho..Am I eligible for the low income card..earn from 300 – 400 a week..
Hello my wife and I are retired self funded retirees aged 64 and 60 presently living off our savings and we both have been eligible for the LIHCC the last few years. I am considering soon to start an Account Based Income Stream with my Super which will give us a payment income more than the $51220 LIHCC income limit for a couple if I take the minimum drawdown. Is this payment income amount included in the income test or is only the deemed amount method used for the calculation for the LIHCC. If only the deemed amount what is the maximum amount I can have before the cut off point. Thank you.
Hi Michael
Thanks for the question. From 1 January 2015 Centrelink “deem” the income from all new Account-based Pensions. As for the maximum you can have to be eligible for the LIHCC, unfortunately it isn’t that simple because you may have other sources of income. To give you an idea, if you had $2,000,000 in financial assets that are deemed you would be assessed as having income of approximately $43,000 under the couple deeming tiers. I hope that helps.
All the best
Courtney
Hi Courtney thanks for the reply. Just to clarify again and assuming we have no other sources of income,
if my Account based Pension was $1,500,000 and my payment with 4% drawdown was $60,000 per year,
my only income calculated for the LIHCC would be the deemed amount on the $1,500,000 which is $31990
so we would both under the couple limit and still be eligible for the LIHCC. Is that correct.
Thanks again.
Why is it that self funded retirees at 65 on a LIHCC don’t receive the stimulus package?
Hi Phil
My guess is that the Government are trying to target specific groups and unfortunately the group that is LIHCC holders is simply too broad. The Low Income Health Care Card (LIHCC) covers anyone from a teenager to those who have almost reached Age Pension age.
All the best
Courtney
Good Morning Team
I have been reading all the comments regarding the LIHCC which is very interesting, as you do not get much information from Centrelink website and applying for this is a nightmare. I read Michael’s query dated 28-9-20 at 1.30 pm but no answer was provided.
My wife and I are self funded retirees below pension age. We were advised that we might be eligible for the LIHCC but I am uncertain if we are.
Presently, we have an allocated income stream which will easily exceed the 8 week LIHCC income cutoff if Centrelink takes this income 100%.
My question concerns, how Centrelink considers this income stream. Do they take the full amount of the monthly income stream or a percentage like how they consider the deeming rates for bank saving/shares in calculating, the 8 week income calculation for the LIHCC.
I am unable to get any assistance from Centrelink nor find any website to assist. Your assistance will be greatly appreciated.
Thank You
Hi Mikey – Thanks for posting your comment.
The good news is that Centrelink are unlikely to assess 100% of your allocated income stream payment, I suggest you call our office to dive a little deeper into your situation.
Our number is 03 5224 2700.
Thanks
Chris
Hi Team,
I’m a recently retired self funded retiree with my only source of income being an account based super pension, and am finding it incredibly difficult to determine if I’d be eligible for a LIHCC. With a balance of about $500000 and drawing $30000 annually, would I be eligible?
Hi Richard
Centrelink require all of your financial information to determine your eligibility for the LIHCC. Unfortunately we can’t make an accurate assessment based on your superannuation balance.
All the best
Courtney
Hi Team,
If you have reached pension age, is money still in Superannuation(Not Account Based Pension) deemed as income for the LIHCC.
Thanks
Regards
Peter
Hi Peter, yes it is.
All the best
Do Centrelink take into account living expenses such as rent etc when assessing for LIHC. I earn just over the $560 by approx ,$120 varying each week, so after rent alone is taken out it only leaves around 480 give or take $50. Thanks
Hi Lynda,
Centrelink do not take into account expenses when determining your eligibility for the Low Income Health Care Card.
Cheers
Courtney Robinson
Hi Team,
Could you please tell me the most up-to-date combined income of a couple (who have not reached 66.6 yrs) and who would like to apply for a LIHCC, please?
Thanking you
Bernie
Hi Team
Could you please tell me if I am eligible to get a Low-Income Health Care Card? I am over 50 and single, I lost my job as a subcontractor nearly 2 years ago since the pandemic broke out.
For the last financial year from July 01, 2020 to June 30, 2021, all my income were the Jobkeeper payments and for this financial year from July 01, 2021 to present, I have received nothing as I haven’t done any work due to inability to get another job.
I own my own home and don’t have any other investment but have a term deposit account with some savings in it. However, due to low interest rates paid, earned income are negligible or nothing.
Can I apply for a Low-Income Health Care Card and am I eligible to get it?
Thanks.
Hi there,
Your question about eligibility for support from Centrelink will require a much more in depth look at your circumstances.
If you would like to discuss this matter further, please call our office on 03 5224 2700.
Thanks
When I turn 66.5 later this year I’ll no longer receive the DSP and my husband no longer the Carer’s Payment (not sure about the Carer’s Allowance). Were thinking of taking the super as a lump sum at this point.
I’d much rather receive the Low Income Healthcare Card than the Commonwealth Senior’s Card and am wondering whether our combined superannuation of just over $1m plus around $170k in the bank would see us out of the current criteria for this card, which would help greatly with energy, council rates, car rego and pharmaceuticals. From what I can gather the Commonwealth Senior’s Card would only assist with pharmaceuticals on the PBS.
Losing the Pensioner Concession card is quite a major financial disadvantage. Your advice would be greatly appreciated. Thanks.
Hi Anna,
Given your eligibility for the various concession cards hinges on a number of criteria, we cannot provide an opinion without more information.
Please call our office on 03 5224 2700 and one of our advisers will be able to help you.
All the best.
Muirfield
Hi Team
We are both 65 and don’t qualify for a pension until 67 years old, but we currently qualify for the LIHCC. We wish to retire shortly from our part-time work and be completely self-funded until pension age. We only have one Superannuation account which is still in accumulation mode with no current plans to convert it to a pension. We currently qualify for the LIHCC, if I make a lump sum withdrawal once a year from my Super will that count as a lump sum income or just be added to our bank account assets and deemed as per other bank accounts? Thank you
Hi Brian,
Based on the information you have provided, correct, any lump sum withdrawals left in your bank are considered an asset and deemed to earn an income at the applicable rate.
I trust this answers your question.
Cheers
Courtney Robinson
Hello my wife and I are both of pension age and are not receiving any pension as we are just above the asset limit for couples. Our Super is our only asset other than owning our own home with a small amount of savings in the bank. We have an allocated pension which is giving us $70000 a year to live on, that is our only income which we started 3 years ago. Is that $70000 included in the income test for the LIHCC or is it only the deemed amount of our super thats is used in the income test. If its only the deemed amount of our super then we would easily be within the income test limit for couples for the LIHCC.
Hi Robert,
Superannuation Pension accounts are assessed using the deeming rules. By the sounds of it you are across the rules and I hope my comments point you in the right direction.
Cheers
Courtney Robinson
Hello can a couple hold both the Low Income health care card and the Commonwealth Seniors card at the same time if eligible for both. I have noticed the LIHHC has some discounts that the Commonwealth Seniors card doesn’t have like Car reg discount and Ambulance here in Victoria. just curious.
Thanking you Alan.
Hi Alan, you can and should hold both cards if you’re eligible.
I am.just wondering if I am eligible for a low income health care card if I have sold a investment property with a sizeable profit. Is the sale profits of the sale included as income?
Hi Leeann,
We cannot determine your eligibility for a benefit without knowing your entire personal and financial situation.
If you would like to chat further, please call our office on 03 5224 2700.
Cheers
Courtney Robinson
Can you tell me if there is any benefit in having a low income healthcare card as well as a pensioner card,please? I am a pensioner and have been approved a LIHCC, but will it be any different from having only a pensioner card?
Hi Chris,
We typically encourage clients to apply for both cards if they are eligible. In the past, the Government has paid various supplements (think COVID) to Commonwealth Seniors Card holders and not LIHCC holders.
All the best.
Courtney Robison
Hi. I am looking at applying for the low income health care card and have a question of my eligibility and how the income test works.
I am 63 and not pension age yet. I am retired so will be relying on my Superannuation to cover me until I reach age pension age. I am thinking about setting up an income stream with my superannuation account to pay me weekly to cover my expenses until age pension age.
Is this accessed as income under the income test with the low income health care card? Or is this deemed income?
I don’t have any other financial assets like second house, second car, shares or anything. Just the main home and car and my super balance.
Thanks for any help.
Hi Rajesh,
Centrelink rules state that Superannuation kept in accumulation phase is not used in their means tests (income and assets) until your reach Age Pension age.
If you commence an account-based pension (income stream), it will be included in the means tests, regardless of your age.
Superannuation income streams commenced today are deemed to earn an income. Centrelink do not go by the actual income drawn from your Superannuation.
I hope this helps.
Please bear in mind I have provided general information.
All the best
Courtney Robinson
Good afternoon.
I have a similar question to the user above regarding the low income health care card and superannuation.
I have been approved for the low income health care card. I earn a gross wage of $944 a week which is under the income test limits to get the card. I also don’t have any other income. Just my weekly wage.
Now I am looking at withdrawing around $10,000 from my superannuation and move it to my bank account (savings with Commonwealth Bank).
I am over 65 so I don’t need to pay any tax on taking the money out of my superannuation.
Will withdrawing the super make me ineligible to keep the low income health care card?
I read if your income goes above the limit over an 8 week period then you become ineligible. So 8 weeks x 944 = $7552.
$7552 + $10,000 super withdrawal will put me above the $11,270 (couple combined) to retain the card.
So have I done my maths correctly that withdrawing $10,000 super into my bank account will make me ineligible to keep the low income health care card?
Regards,
Abhishek.
Hi Abhishek,
The key rule to understand is that Superannuation in accumulation phase is not assessed by Centrelink until you reach Age Pension age. If you begin to draw a regular pension from your Superannuation, it will be fully assessable by Centrelink regardless of your age.
More specifically to your question, if you take a lump sum withdrawal from Superannuation, the withdrawal amount is not necessarily assessed as income. Rather, the $10,000 is deemed to earn income at the applicable rates which can be found online.
I suggest you speak a Centrelink Financial Information Officer who can provide an exact assessment.
All the best
Muirfield
Good afternoon, I ma retired an dof pension age. i have an ABP and a few share and money in the bank.
So have I understood the calculation for the LIHC card correctly as being the arithmetic sum of ABP, share value, share income, franking credits and bank interest, with that total being deemed ?
Hi Daryl,
In general terms, the deemed income on financial investments is a contributing factor in determining your eligibility for the card.
Financial investments include bank accounts, shares and Superannuation accounts (if you are of Age Pension age).
You may also have assessable income from employment, rental properties or other types of investments.
I hope this helps.
All the best.
The Muirfield Team
Hi,
I have enjoyed reading your updates and answers to questions asked here. You are providing a very important service.
My question is based around defined benefit schemes and how they are assessed for income purposes for the LIHCC?
As an example, if a married person is 63 years old, and on a defined benefit scheme with an income of $2560 per fortnight and a tax free portion of 3%. What portion of that dfs would be assessed.
Thanks again.
Regards
Greg
Hi Greg,
We’re glad you have found value in our online forum.
That is a great question. Defined benefits are assessed under what’s called the deductible rule. This means your entire pension is assessed as income, minus the tax free (deductible) amount.
In your case, this is 3%. As a result, the majority of your pension is used to determine your eligibility for the card.
All the best
The Muirfield Team
Hi,
I have a programming question.
I would like to apply for LIHCC, but as I don’t have a passport, I tried to do it through their Centrelink portal.
It doesn’t allow me to put birth certificate in, as it’s my maiden name (of course), not my current name now. There is no avenue to add marriage certificate as a next step, brings the application to a standstill and directs me to write (not email) Centrelink. Or phone them…. I believe this is problematic, the phone system.
Any ideas would be greatly appreciated, but I will hang off the phone for hours if that’s what you reccommend,
Many thanks,
Kath
Hi Kath, I can appreciate your frustration.
Unfortunately the online application system is a little rigid and does not make allowances for slightly different situations like yourself.
We typically recommend to our clients to take a few forms of ID into their closest service centre.
I hope this works for you.
All the best
Hi, thanks for all the information you are providing regarding the LIHCC (which I never knew existed!). My question involves the treatment of rental income. I have two investment properties that are only slightly positively geared (less and less so as interest rates are rising). When calculating my income from the rental properties, does Centrelink look at the rent received over the past 8 weeks less interest paid on the loans? Could I also deduct other expenses such as maintenance that has occurred on the properties over the last 8 weeks?
Many thanks,
Mark
Great question mark. Centrelink use your net rental income (income minus costs) when determining your eligibility for the card.
The simplest way to provide this information is to submit your annual tax return which will include a property profit and loss statement. Centrelink will break down the net annual income into a weekly amount.
If you do not complete a tax return, Centrelink provide a worksheet to help deliver the information they need.
I hope this helps.
All the best.
My husband is a self funded retiree and I still work 27 hrs per week, am I eligible for a lihcc? And how do I show what my husband receives in a fortnight from his super
Hi Elvira, unfortunately we cannot determine your eligibility for the card based on these few details.
If you would like to understand your eligibility, please email mfs@muirfieldfs.com.au with your request.
All the best.
Thanks for this clarity re the LIHCC. Unfortunately, after checking the Centrelink website and speaking to one of their staff I’m none the wiser re our situation. My partner and I (both 64yo and retired) have about $1,360,000 in super currently streaming the minimum 4% (the Centrekink person told us this is counted as income ie no deeming). We also have about $260,000 in the bank. What seems to be the tricky bit is how my partner’s $30,600 Government defined benefit pension (additional to above) is treated. If we add that to the deemed amount (approx $34,450) from other super income streams and bank holdings as above, total $65,050, it looks like we qualify, but is that how it works. Much thanks
Hi Peter, I think we can answer your question with a general response.
Defined benefit pensions often have a taxable and tax free component. Centrelink assess the entire taxable component as income and the tax free component is not assessed. However, of the the non-assessable income (tax free component) is capped at 10% of the entire pension.
I hope this helps.
Kind regards
Muirfield
We have learned a lot reading through this forum, so thank you!
We’re wondering if one of us has not submitted tax returns for a couple of years due to not working, will this prohibit our household from applying for the LIHCC?
Hi Wendy, I’m glad to hear you have enjoyed our articles.
You are not required to complete a tax return to apply for the Low Income Health Care Card (LIHCC).
Amongst other things, Centrelink will “deem” your financial assets to earn an income. This will be used to determine your eligibility.
My husband and I have retired and have the LIHCC for the last 5 years. This year, my husband turned 67 and will need to include his super (still in accumulation phrase) in the deemed income calculation. As a result, our combined deemed income (couple) will be over the income limit. He is still eligible for the CSHCC but I will be left with no concession card. Is there any other concession card that I can apply . I am 64 and my own income will be well below the income limit for a single person.
Many thanks.
Hi Liz, as you have duly noted the Low Income Health Care Card and Commonwealth Seniors Health Care Card are both based on couple income.
There are strategies that can be used to improve your eligibility, however, we suggest calling our office to discuss it.
Our number is 03 5224 2700.
Thanks
The Muirfield Team
Hello how are you? We are self funded retiree in our 60’s. Every year we have to submit tonnes of paperwork to renew for LIHCC.
We have an investment property and during the 8 weeks qualifying period, if we prepay our yearly council rate & landlord insurance then we are way under the re-qualification income amount. Is this ok to do this?
We are referring to this article : https://guides.dss.gov.au/social-security-guide/4/3/8/30
Assessable income – allowable deductions from gross income
Income from real estate for social security purposes is the same as that assessed for taxation purposes with some exceptions. The person’s tax return and income TNA will provide evidence of the deductions claimed and allowed for tax purposes. Most common deductions will be necessary costs such as agent’s fees, repairs, land and water rates.
Hi Sally, for investment properties Centrelink prefer to use your most recent profit and loss statement. Rather than take your literal income and expenses for the last 8 weeks, they pro-rata your annual net income.
In doing so, there is no benefit to pay for large expenses immediately before applying for the card.
I hope this helps.
All the best.
The Muirfield Team.
Thank you very much for fast reply! Have a lovely week!