The Carbon Tax – Implications for Seniors

From July 2012 full and part age pensioners will receive compensation payments, as will seniors holding the Centrelink issued Commonwealth Seniors Health Card. This applies to disability support pensions, carer payments and Department of Veterans Affairs service pensions. In May or June 2012 single pensioners will receive a lump sum payment of approx. $338 and for couples approx. $382.50 combined. The fortnightly increase then commences in March 2013.

The lump sum and ongoing supplement will also be paid to holders of the Commonwealth Seniors Health Card (CSHC). To be eligible for the CSHC, taxable incomes for singles over pension age must be less than $50,000pa and for couples $80,000pa combined. Income from most allocated or account based pensions doesn’t count towards the threshold, as payments from these pensions are tax free once you turn age 60.

The CSHC should not be confused with the State Government Seniors Card which is issued to West Australian residents from age 60 who work less than 25 hours  week.

So what are the key take outs if you are at or approaching age pension age?:

– If you are receiving a full or part age pension, disability support pension, carer payment or DVA Service Pension you do not need to do anything.

– If you are near or at age pension age but are ineligible for a part pension, you may still be eligible for the CSHC, and as a result receive the compensation payments. Your combined taxable income needs to be less than $80,000pa, or $50,000pa if you are single. Bear in mind that the age pension is both assets and incomes tested but the CSHC is only income tested.