Sheena Stow-Smith from PensionHelp answers reader questions about super pensions and the Commonwealth Seniors Health Card.
Q: I commenced my compulsory pension drawdown in my SMSF in 2012. I couldn't apply for a Commonwealth Seniors Health Card at that date as I hadn't reached the official retirement age at that time. My birth date is 01/09/1951. My question is, am I entitled to be exempt from the deeming being applied to my current super balance, as my pension had started well before the new rules came into effect?
A: Unfortunately, no. From 1 January 2015, account-based income streams are included in the income test. Assuming you were granted the card from as early as you eligible date, your Age Pension age in Sep 2016, you would fall under the current assessment. The current income test for claims of the Commonwealth Seniors Health Card (CSHC) is:
- Your annual adjusted taxable income, plus
- Deemed income from any account-based pensions.
This would include any pensions you have commenced inside an SMSF or any other retail provider, regardless of the start date.
Any amount you have retained in the accumulation phase (not drawing an income) would not be deemed.
Grandfathering provisions may apply to some already in receipt of the card benefits.
A person who is an owner of an account-based pension purchased before 1 January 2015 and held a CSHC on 31 December 2014 will not have their account-based pension included in the income test for as long as they:
- continue to hold a CSHC, and
- retain the same account-based pension.
