Danna Vale (Hughes, Liberal Party) Share this | Hansard source

I agree with the previous speaker, my colleague the member for Gilmore, that this legislation is mean spirited. It is sneaky, it is unfair and it is also un-Australian. According to the explanatory memorandum, the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 implements a 2008 budget measure relating to the adjusted taxable income test for the Commonwealth seniors health card. It states:

The measure will ensure that income received by seniors is treated in a similar way, will align with the age pension the treatment of income salary sacrificed to superannuation, and will ensure that the income test is applied to all cardholders consistently.

What nice bureaucratic language! When this measure was announced in the last budget I was wondering how this government was going to explain this bill to our self-funded retirees and to many of our veterans. So, for the benefit of my constituents, I would like to describe this bill in simple language. The Rudd Labor government is taking the Commonwealth seniors health card away from many senior Australians. This bill will push many seniors over the income thresholds by including income from superannuation and income that is salary sacrificed to superannuation. So while the threshold limits will remain the same and the superannuation drawings from a taxed fund will remain untaxed, these drawings will be added to a person’s adjusted taxable income for the purpose of assessing eligibility for the Commonwealth seniors health card.

The loss of the Commonwealth seniors health card will hurt many senior Australians as it provides access to discounted prescription medicines through the Pharmaceutical Benefits Scheme. Cardholders currently pay $5.30 per script, but after losing it they will pay $32.90 per script. Cardholders also benefit from the PBS safety net threshold because scripts are free once they have paid a total of $318 for pharmaceuticals. Currently cardholders also have access to the seniors concession allowance of $500 a year and a telephone allowance of $34.60 per quarter for help with essential services and expenses. Cardholders may also benefit from other services, such as bulk-billed GP appointments and a reduction in the cost of out-of-hospital medical expenses above a concessional threshold through the Medicare safety net.

In some instances, state and local governments and private providers offer additional health, household, transport, education and recreation concessions at their own discretion. These benefits are of great assistance to our self-funded retirees and to our veterans. Self-funded retirees have already been hit hard by the current global economic circumstances. Many have seen their savings decrease and their rates of return fall significantly. Indeed, one self-funded retiree I spoke to last weekend in my electorate said that since Christmas his income has reduced by over 50 per cent. But instead of providing extra assistance this heartless government is cutting assistance and forcing these retirees to dig deeper into their savings. This will ultimately lead to a decrease in their standard of living. I might point out that the recent $43 billion stimulus package had nothing in it for self-funded retirees. I have had a number of my constituents from Hughes contact me with concerns about this matter. I would like to read a letter from a Mr John S., a constituent from Engadine. He says:

I refer to the announcement in the 2008 Federal Budget regarding proposed changes to the income test for assessment of the Health Care Card. I specifically refer to the proposal to include superannuation and pension benefits paid for this test.

Access to the Health Care Card provides reduced health care costs for those retirees whom are ineligible for Government income payments, and in this regard greatly assists self funded retirees in funding medical expenses.

The proposed change to the Health Care Card income test greatly restricts access to this vital Government service for a large percentage of self funded retirees. The net result of this change will likely be that self funded retirees may have to access the Age Pension sooner than would otherwise be the case as savings will be depleted at a faster rate due to increased medical expenses.

Indeed, that is exactly the problem that these retirees will be facing: a decrease in their income. I am advised that the National Seniors Association and the Association of Independent Retirees are also opposed to this bill. The Association of Independent Retirees has brought it to my attention that a superannuant drawing down funds from their superannuation fund for a special need or emergency situation could be penalised because Centrelink would consider such a drawdown as income. The February newsletter from the Sydney St George branch of the Association of Independent Retirees clearly sets out the concerns of its members. It states that this legislation is:

… fraught with anxiety, and much uncertainty. There is the potential for significant financial loss, if pharmaceuticals and medical services must be purchased at the general price, and remembering elderly people usually are receiving treatment for chronic conditions and diseases. For example, 5 medicines per month the difference is $25 (5x$5 per script) to $150 (5x$30). Many retirees will not have that level of surplus income, or flexibility to seek an increase to the income stream.

The Government is neither recognising nor assisting retirees, in situations when a special or emergency need arises, in which case retirees must access their retirement capital. To create such uncertainty and doubt, when retirees need extra funds, but will be facing extra costs for medicines and medical services, simply because they have been denied the Commonwealth Seniors Health Card when their ‘gross income’ exceeded the income threshold.

This is the essence of what the Government has forecast when announcing that legislation will be introduced to change the eligibility criteria, when assessing gross income, for those retirees applying for and holding a CSHC.

If there are unrealistic opportunities, if there are abuses by workers applying for the CSHC, then those should be addressed. For retirees who need access to their funds for emergencies and living expenses, then the members of A.I.R. and the wider community of elderly retirees, seek your considered review of what is being proposed by the current government.

I am advised that, in opposing this bill, the National Seniors Association and the Association of Independent Retirees also point out that our senior Australians are anxious about this legislation because, should the drawdown be substantial and exceed the income threshold, the entitlement to the Commonwealth seniors health card and its related benefits, which are very important, would be lost to them and would cause significant uncertainty and hardship in their declining years.

The Association of Independent Retirees also makes this point:

In situations where the draw-down funds have been used to pay the accommodation bond to a hostel for low-care accommodation, or the money is used to replace motor car for transport, or the money is needed for home maintenance, it is difficult to understand the purpose of this ruling, and extremely distressing because the supposed ‘gross income’ would, quite possibly, disqualify the retiree from holding the Commonwealth Seniors Health Card for the remainder of the year.

This association asks:

How can the transfer of one’s own funds from one source to another and then spent on a necessity be regarded as income?

How indeed? The people in my constituency in Hughes ask this question in honesty.

The former coalition government worked hard to pay off the previous Labor government’s $96 billion debt so that we could extend some assistance to self-funded retirees and our senior Australians who were not claiming income support. Now, 15 months after getting into government, the Labor government is rolling back this support. These proposed changes were not mentioned prior to the last election.

Recently we have learnt through the media that the Rudd Labor government is looking at options to roll back other measures the coalition government provided to senior Australians. The media has reported that the Labor government could roll back the following measures: including the family home in the assets test, increasing the assets test taper rates and increasing the income test taper rates. These measures could force many of our senior Australians to sell their homes, they could reduce their incentive to save for retirement and they could provide a disincentive for them to earn additional money. During these difficult economic times Mr Rudd should not be punishing self-funded retirees who have planned prudently for their retirement with little dependence on government support. Senior Australians do not deserve to face the full brunt of this heartless Labor government’s razor gang. Mr Rudd needs to guarantee that no senior Australian will be worse off because of his pension review.

The coalition is strongly opposed to these proposed changes. As I said at the very beginning, they are unfair, they are mean spirited and, most particularly, they are an un-Australian way to treat our senior Australians, who have forged this country into one of the greatest democracies the world has ever seen. I cannot in good conscience support this bill and, on behalf of my constituents in the electorate of Hughes, I do not.

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