Understanding the CSHC Income Test
Unlike the Age Pension, the Commonwealth Seniors Health Card (CSHC) is not subject to an assets test. Instead, eligibility is determined solely by an income test. Your total assessable income is calculated by combining two primary components: your Adjusted Taxable Income (ATI) and any deemed income from account-based superannuation pensions. It's crucial to understand that Centrelink assesses your gross (pre-tax) income, not your take-home pay. The income figure used for your assessment is based on your tax details from the reference tax year, which is typically the financial year prior to your application.
Component 1: Adjusted Taxable Income (ATI)
Your Adjusted Taxable Income is a comprehensive figure that extends beyond a simple taxable income amount. It provides a more complete picture of your financial position for the purpose of government benefit assessments. ATI includes a range of income sources:
- Taxable Income: This includes income from employment, net rental income, and income from investments such as shares.
- Total Net Investment Losses: Any losses from investments, such as negative gearing on a rental property, are added back to your income.
- Target Foreign Income: This is any income you received from foreign sources that was tax-exempt or not included in your taxable income.
- Employer-Provided Fringe Benefits: The gross value of any fringe benefits provided by an employer, such as a company car, is included.
- Reportable Superannuation Contributions: This includes voluntary super contributions, such as salary sacrifice or personal contributions that you claim a tax deduction for.
Component 2: Deemed Income from Account-Based Pensions
For CSHC applicants, superannuation in the 'accumulation phase' is not counted in the income test. However, once you move your super into an 'account-based pension' (ABP), the balance is subject to deeming rules.
Deeming assumes that financial investments earn a certain rate of return, regardless of what they actually earn. This deemed income amount is added to your ATI to determine your total assessable income. Services Australia applies different deeming rates to different portions of your ABP balance. It's important to note that these rates can change, and you should always check the latest figures on the Services Australia website.
How Deeming Works for CSHC
As of September 2025, deeming rates for non-pensioner couples will apply to your combined financial assets (including ABPs):
- Lower Rate: A low deeming rate will be applied to the combined balance up to a certain threshold (e.g., $106,200 for couples). As of September 2025, this is 0.75%.
- Higher Rate: Any balance above this threshold will have a higher deeming rate applied (e.g., 2.75%).
This calculation ensures a consistent assessment of your retirement income, even if investment returns fluctuate.
CSHC Income Test Thresholds
The income thresholds for the CSHC have been significantly increased, making more self-funded retirees eligible. The thresholds, effective from 20 September 2025, are indexed annually:
- Single: $101,105 per year.
- Couple (combined): $161,768 per year.
- Illness-Separated Couple (combined): $202,210 per year.
- Additional for Dependent Child: For each dependent child, an additional amount ($639.60 as of September 2025) is added to the relevant threshold.
CSHC Income Test vs. Age Pension Income Test
To clarify the differences, here is a comparison table outlining how the CSHC income test differs from the Age Pension income test.
| Feature | Commonwealth Seniors Health Card (CSHC) | Age Pension |
|---|---|---|
| Assets Test | No | Yes |
| Income Assessment | ATI + Deemed ABP Income | Deeming rules for all financial assets and actual income from other sources |
| Income Source for Deeming | Account-Based Pensions only | All financial assets (e.g., bank accounts, shares, managed investments) |
| Tax Status | Assesses gross (pre-tax) income | Assesses gross (pre-tax) income |
| Thresholds | Significantly higher thresholds | Lower income thresholds apply |
Conclusion: Your Path to Concessions
For self-funded retirees, the CSHC is an important gateway to valuable concessions. The CSHC income test, based on your Adjusted Taxable Income and deemed income from account-based pensions, is simpler than the Age Pension test because it does not include an assets test. Understanding the specifics of this assessment and the latest thresholds is key to determining your eligibility.
If your income is below the current thresholds, it is highly recommended to apply. Even if you were previously ineligible due to lower thresholds, the recent increases may have changed your situation. For official information and to apply, visit the Services Australia website.
