Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Hansard source

The Commonwealth seniors health card is an important form of assistance for non-wealthy self-funded retirees in Australia. These are people who genuinely want to take care of their own affairs, as much as they reasonably can, without relying on government welfare. Currently, the card provides for access to discounted pharmaceuticals through the Pharmaceutical Benefits Scheme, the seniors concession allowance, the telephone allowance and access to the seniors bonus, which for 2008-09 is $500. In addition, Commonwealth seniors health card holders might also benefit from other concessions, such as medical bulk-billing and household, transport, education and entertainment facilities—these being at the discretion of the providers. In effect, Commonwealth seniors health cards are extremely important to those who possess them, both in financial support and for peace of mind. So what is the purpose of the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, which we are debating today? This legislation is a way that the Rudd Labor government is trying to save money. This is why we are here today. The government is making savings at the expense of seniors.

Currently, income threshold limits for the Commonwealth seniors health card are $50,000 for singles and $80,000 for couples. But the Rudd Labor government is introducing this legislation, which will push people over the income thresholds. The government is proposing to make changes to the income test for the Commonwealth seniors health card, such that it will now include income from self-funded retirees’ superannuation and income that is salary sacrificed to superannuation. The threshold limits will remain the same. It is also of note that the income from private taxed superannuation funds is not included as income for taxation purposes; however, these drawings will be added to a person’s adjusted taxable income for the purposes of assessing eligibility for the Commonwealth seniors health card. The consequences for seniors right around Australia are stark. It will directly affect people from different backgrounds and all walks of life. Seniors are feeling significant pressure in the current economic climate.

I also point out that there will be members of the veteran community who will be caught up in these changes—former service personnel, those who have worn Australia’s uniform with pride and distinction. This Rudd Labor government action will, for some of these people, remove access to the Commonwealth senior’s health card. First, let me state that not all veterans will be affected. For those receiving the age service pension there will be no impact from the government’s proposed changes. They are issued with a pensioner concession card which provides access to subsidised pharmaceuticals under the PBS. Other veterans, those who do not qualify for the age service pension as their income or assets are too high, might lose eligibility for the Commonwealth seniors health card. I point out that, of these, veterans aged 70 or more with qualifying service will already be issued with a gold card. Gold card holders aged over 60 years will also not be affected, as they can access concessional pharmaceuticals under the PBS with their gold card. It is the group in this population—not on an age service pension and whose adjusted taxable income is currently less than $50,000 for a single person or $80,000 for combined with a partner—who may lose their Commonwealth seniors health card with the proposed income test changes. It will be some of those with salary sacrificed superannuation and/or amounts of superannuation from private taxed superannuation sources that take them over the $50,000 or $80,000 limit who will lose access to the seniors health card.

We do not know how many veterans will be affected, but, for some, these changes will come as a rude shock. We must ask: is this something we want to do to people after they have served our nation in the Defence Force—people who have worked hard and paid their taxes? Is this a message we want to put into the minds of people considering a career in the ADF? When we want to encourage people, particularly young people, to join the Australian Defence Force, why is this government introducing another disincentive? Why is it that those who have worked hard and saved all their lives will be penalised? Unfortunately, this is what we increasingly see from this government: savings made at the expense of a small number of people.

Often people are not at an age in their life where they can make career changes or adjust to changing circumstances. These changes were not flagged before the last election—an election where Labor promised much and implied they would do even more. Unfortunately, this penny-pinching is not a one-off. In the veterans affairs portfolio we have already seen savings made. Of particular note were the changes to the partner service pension. Initially, the government planned an increase in age eligibility, for some, for the partner service pension—which previously was 50 years—to 58.5 for females and 60 for males. This was intended to save the government $34.6 million over four years.

The government also planned that those who were separated but still legally married to a veteran would cease receiving the partner service pension 12 months after separation or from the beginning of a new marriage-like relationship for either the veteran or the former partner. This measure was expected to lead to an overall saving of $33.9 million over four years. It was to the credit of many outstanding members of the veteran community that they took the fight to the government and, with the opposition, put enough pressure on the government to back down that the government recognised the meanness of some of these changes and amended them. Despite this, the changes to the partner service pension will still mean that some 475 to 500 recipients are expected to lose entitlements after 1 July this year. This will lead to a net saving for the government of $28 million over four years.

We have a Prime Minister who is keen on symbolism and on crafting a legacy. It is a fact that one legacy of the Rudd Labor government is that they took partner service pensions away from around 500 people. At present the Rudd government is sending mixed messages about spending. On the one hand we have the Rudd government spending $42 billion dollars as part of a stimulus package, including individual payments totalling $12.7 billion. This will impose a huge debt, a huge burden, for our children to repay. On the other hand, they penny pinch from partners of service personnel and from the self-funded retirees we are talking about here today. They deny the Commonwealth seniors health card to senior Australians who just happened to try to do the right thing and plan for their retirement. The government intend to move an estimated 984,000 scripts from the concessional category to the general category in 2009-10. An estimated 22,000 Commonwealth seniors health card holders will lose eligibility in the same year. The savings from these measures is $84.8 million over four years.

Consider the consequences for a person losing access to the Commonwealth seniors health card under the government’s proposal. Let me paint the picture. First, under the PBS, Commonwealth seniors health card holders pay $5.30 per script. After losing it they will pay $32.90 per script. Second, with the Commonwealth seniors health card a senior reaches the PBS safety net threshold when he or she has paid a total of $318 for scripts. Prescriptions after that are free. With-out a Commonwealth seniors health card, the safety net threshold rises to $1,264.90, after which a fee of $5.30 per script still applies. Third, with the Commonwealth seniors health card, a senior is eligible to receive an annual seniors concession allowance of $514 to assist with payment for essential services for which pensioners are granted concessions. At 1 July 2009, many seniors will lose their entitlement. Fourth, Commonwealth seniors health card holders will receive a lump sum payment of $500 in 2008-09. Previously this payment has been $300 and, under the government’s recent package, it was $1,400 for a single person. If a self-funded retiree loses their Commonwealth seniors health card because of eligibility changes, they might not participate in any further bonus payments. Fifth, Commonwealth seniors health card holders qualify for a telephone allowance of $138.40 per year for a residential service. That will be lost.

What is the total cost to a senior? Firstly, when combining the seniors concession allowance and the telephone allowance we have $652.40 annually. Secondly, if we factor in a possible future seniors bonus payment—which, as I just mentioned, is $500 for 2008-09, a self-funded retiree could be losing in excess of $1,000. Lastly, we come to pharmaceuticals. Each person has different needs so figures vary, but someone who lost their Commonwealth seniors health card would now have to find $32.90 for each script instead of $5.30. If a person required numerous scripts, they would reach the safety net threshold of $1,264.90. This is far above the $318 safety net threshold they would still have been on with a Commonwealth seniors health card. And they would be paying $5.30 for each additional script over the safety net threshold; whereas before, once the safety net threshold was reached, scripts were free. The difference in thresholds is $946.90.

There are two distinct sides to the Rudd Labor government. One moment they tell us they must borrow billions to pay Australians as part of a stimulus package, and the next moment they penny pinch. They take from many self-funded retirees, who have planned for their retirement with minimal dependence on government support—with the exception of the reassurance of the Commonwealth seniors health card. Self-funded retirees should not be considered an area that can be squeezed for savings. These are people who are among the hardest hit in the current economic situation. They potentially have falling funds in their superannuation accounts and now they might face a second blow by losing their Commonwealth seniors health card. They should not be the victims of a government trying for credibility as ‘economic conservatives’. Stripping the Commonwealth seniors health card off people in tough times does not make a government or a prime minister an economic conservative; it just shows a mean spirit.

How many veterans will be caught up in these changes? We know some will, but it is too early to know exactly how many. Such is the awful shock awaiting some of those who have worn our country’s uniform. Along with my coalition colleagues, I am opposed to these changes. In these tough economic times, people should not be punished for trying to prudently plan for their retirement. They deserve the peace of mind that is the Commonwealth seniors heath card. This is hardly the action of a compassionate government.

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