House of Representatives

Social Services and Other Legislation Amendment (Seniors Health Card and Other Measures) Bill 2014

Second Reading Speech

Mr Andrews (Minister for Social Services)

This bill will implement the government's election commitment to index income thresholds for the Commonwealth seniors health card.

The seniors health card is available to people who are of age pension age but who do not qualify for the age pension-typically, self-funded retirees.

Qualification for the seniors health card depends partly on a person satisfying the seniors health card taxable income test. Under that test, the person's adjusted taxable income must not exceed the taxable income limit that applies to the person's family situation.

These income limits are currently set at $50,000 for singles and $80,000 for couples.

The taxable income limits are not currently indexed and have not increased since 2001.

Introducing indexation means more people will satisfy the seniors health card taxable income test and therefore qualify for the seniors health card.

The government recognises that self-funded retirees, after a lifetime of hard work, have made a significant contribution to our nation's success. They are entitled to a safe and secure retirement.

We also recognise that, by looking after their own retirement needs, self-funded retirees save the Commonwealth budget considerable pension costs.

However, we know that many self-funded retirees are not wealthy and face financial pressures. Those who meet the current income test and therefore hold a seniors health card are rightly concerned about modest changes in retirement income potentially causing them to lose their entitlement to the card.

Unexpected medical bills can be a significant worry for many seniors in that position.

Indexing the current income thresholds so they do not erode in real terms will allow more self-funded retirees to qualify for a seniors health card-or to keep their card despite small increases in their income beyond the current limits.

This means more seniors will be able to access the concessions that come with the card-including medicines listed in the Pharmaceutical Benefits Scheme at the concessional rate.

Indexation of the income thresholds will occur annually, starting on 20 September 2014, and will be based on movements in the consumer price index.

This measure applies to the seniors health card under either the Social Security Act 1991 or the Veterans' Entitlements Act 1986.

The bill will also make minor and technical amendments to portfolio acts, including reflecting changed Public Service administrative arrangements.

I commend the bill to the House.