Commonwealth Seniors Health Card (CSHC) income test and reference tax year 065-06030020

All customers claiming CSHC must provide evidence of their (and if applicable, their partner’s) income for the applicable financial year plus evidence of any account based income streams.

Defined benefit income streams will be included in the customer's Adjusted Taxable Income (ATI) and therefore do not need to be individually noted for CSHC claims.

The reference tax year is usually the tax year immediately prior to the current tax year.

If a customer is unable to provide verifiable details for that tax year, then the one immediately preceding will be the reference tax year.

If a customer's entitlement is to be determined based on a current year estimate of income (excluding situations where income is below the tax free threshold or if they are not required to lodge a tax return as the result of an ATO tax offset), the reference tax year is the current financial year.

A customer and their partner must provide income details for the same tax year.

If the customer is not required to lodge an income tax return because:

• their income is below the tax free threshold, or
• as a result of an Australian Taxation Office (ATO) tax offset,

Deemed income from any account-based income streams will be calculated on the current balance. Customer or partner must provide a Details of Income Stream Product form (SA330) or similar schedule from their provider. Before the new account-based income stream can be added.

The income test for the Commonwealth Seniors Health Card (CSHC) is based on:

• Adjusted Taxable Income (ATI) of the customer (and their partner if applicable) for the applicable financial year, plus
• deemed income from any account-based income streams

See the Resources page for a link to the Services Australia website for Income test for a Commonwealth Seniors Health Card.

Adjusted Taxable Income (ATI) is the sum of:

• Taxable income - Customers need to include taxable income whether or not their income is below the tax free threshold or if they are not required to lodge a tax return as a result of an Australian Taxation Office (ATO) tax offset. If a person's taxable income is negative, it is taken to be zero before adding any investment losses and other ATI components. From 1 January 2011, Paid Parental Leave (PPL) is included as taxable income. Note: Prisoner of War Recognition Supplement from Department of Veterans' Affairs is not taxable income. It is also exempt income for social security purposes.
• Total net investment losses, the sum of net financial investment losses and rental property losses.
• Target foreign income on which Australian income tax is not paid
• Reportable superannuation contributions
• Employer provided fringe benefits in excess of $1,000

Note: for CSHC purposes, a person's fringe benefits value for a particular tax year is the total grossed up value (as shown on the payment summary/ATO income statement) of the person's employer provided benefits minus $1,000.

The deemed income is added to the ATI amount, with the combined total used in the CSHC income test. Deeming will only be applied to account-based income stream(s) and not any other financial assets they own.

Customers will be required to provide evidence of any account-based income streams. Grandfathering provisions for account based income streams also apply in some circumstances. See Adding or updating an account-based income stream.

Commencing from 20 September 2014, the Commonwealth Seniors Health Card (CSHC) income thresholds will be indexed annually by movements in the Consumer Price Index (CPI). The additional dependent child amount will not be indexed.

As a part of the 2022-2023 Budget the Australian Government announced an increase to the income limits for (CSHC). These increases became effective on 4 November 2022.

To view the current CSHC annual income limits, see Rates and thresholds.

Customers who are not required to lodge an income tax return, either because their income is below the tax free threshold or as a result of an ATO tax offset, will not receive a Notice of Assessment, so they will need to estimate their income for the previous financial year.

Customers who are required to lodge a tax return but are unable to provide income details from either of the previous 2 financial years. As they have not yet lodged their tax return with the ATO are not permitted to use an estimate of their income. The customers claim for Commonwealth Seniors Health Card (CSHC) must be manually rejected or CSHC entitlement manually cancelled.

The only exception to this is where the customer can provide verification from the ATO that they have been granted a lodgement extension. No older than 2 years previous to the current financial year and which has not expired. Customers who have been granted an ATO lodgement extension must provide documents to support what their estimated Adjusted Taxable Income (ATI) is likely to be for either of the previous two financial years. An estimate for the current financial year cannot be used.

A customer's entitlement may be determined based on a current year estimate of income, providing that the change in circumstances:

• has already occurred
• can be satisfactorily demonstrated, and
• is an acceptable condition for using an estimate of income for the Commonwealth Seniors Health Card (CSHC) income test

If a customer's income for the preceding tax year is above the CSHC income limits, and:

• they can demonstrate a change in circumstances that is an acceptable condition for using an estimate of income for the CSHC income test
• they may give a current year estimate of their income for the current financial year

If customer has had their claim or entitlement for CSHC rejected or cancelled:

• due to an estimate of their income for the current financial year being over the income limit, and
• the customer then lodges another claim/reclaim, they must provide a revised estimate of their current year income

The claim is not to be granted based on income details from a previous financial year. The customer must also provide details of why the estimate has changed. The new estimate should only be accepted if both the reason and the amount are considered reasonable and has been verified.

When completing income estimates on the Seniors Health Card income summary and details (SHIS/SHID) screen in Process Direct or SHC Income Details (SHID) screen in Customer First, all income components such as Target Foreign Income must be entered using Australian dollars (AUD).