Low-Income Health Care Card – The Forgotten Concession

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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.

24 Comments

  1. Susan Hoath on September 23, 2019 at 10:01 am

    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?

    • The Muirfield Team on October 2, 2019 at 3:27 pm

      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

  2. John on October 22, 2019 at 8:06 pm

    Hi is the low LIHCC the same as the centerlink HCC

    • The Muirfield Team on October 25, 2019 at 9:06 am

      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.

  3. Jonathan on December 29, 2019 at 3:27 am

    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!

    • The Muirfield Team on January 2, 2020 at 9:21 am

      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

  4. Stephanie on January 25, 2020 at 4:26 pm

    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…

    • The Muirfield Team on January 31, 2020 at 11:03 am

      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

  5. wendy on May 26, 2020 at 2:35 pm

    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.

    • The Muirfield Team on May 27, 2020 at 8:21 am

      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

      • Wendy on May 28, 2020 at 10:33 am

        Thanks so much Courtney – this has been very helpful.

  6. Stuart on June 11, 2020 at 4:27 pm

    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.

    • The Muirfield Team on June 15, 2020 at 4:59 pm

      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

  7. Michael on September 25, 2020 at 1:17 pm

    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.

    • The Muirfield Team on September 28, 2020 at 9:50 am

      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

  8. Michael on September 28, 2020 at 1:30 pm

    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.

    • Phi on October 11, 2020 at 12:10 pm

      Why is it that self funded retirees at 65 on a LIHCC don’t receive the stimulus package?

      • The Muirfield Team on October 12, 2020 at 8:41 am

        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

  9. Mikey on November 25, 2020 at 12:31 pm

    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

    • The Muirfield Team on November 27, 2020 at 12:01 pm

      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

  10. Richard King on August 2, 2021 at 1:59 pm

    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?

    • The Muirfield Team on August 12, 2021 at 3:37 pm

      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

  11. Peter Madden on October 4, 2021 at 3:17 pm

    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

    • The Muirfield Team on October 12, 2021 at 1:04 pm

      Hi Peter, yes it is.

      All the best

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