Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Families, Community Services and Indigenous Affairs, Senator Evans. I refer to the government’s announcement that from 1 July 2009 the income test for the Commonwealth seniors health card will include income from superannuation streams with a taxed source. Will the minister confirm that in calculating eligibility for the seniors card only income from the taxable component of their pension or annuity will be included?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank the senator for her question. The budget measures introduced seek to provide equal treatment of income sources for people claiming the Commonwealth seniors health card. We believe it is fairer to treat income that seniors receive in that way. Currently, income from a defined benefit scheme, such as the CSS for public servants and some state government funds, are treated as income. But income from some private retail or industry superannuation funds and from account-based pensions are no longer taxable and so are not counted as income. We do not believe that the existing income rules are an equitable measure for assessing the eligibility for the card. The adjusted taxable income test will be changed to include income from a superannuation income stream with a tax source and income that is salary sacrificed to superannuation. This income is assessed as income for the age pension but not for the seniors health card. Also, losses from financial investments—losses from rental properties—are already added back into adjusted taxable income, so this will provide some equity between investment incomes.

The reference tax year definition has been changed so that cardholders must use the most recent full financial year when being assessed. In addition, couples must use the same reference tax year. The inclusion in the adjusted taxable income test of income from people with superannuation income streams with a tax source and income salary sacrificed to superannuation best reflects the disposable income available to people claiming a Commonwealth seniors health card for this group. Their income is treated in the same way as income from other sources. This is part of the government’s attempt to make sure there is equality of access to Commonwealth benefits. We believe that people ought to be treated equally, that they ought not be able to gain access to entitlements by use of measures that do not truly reflect their income. This is another measure which we think is desirable in terms of providing equity into the benefits system inside Australia. We think that this change in eligibility is a fair and equitable measure and will see people treated the same.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I have listened very carefully to the minister’s answer and unfortunately he did not make clear whether it would be only income from the taxable component of a pension or annuity that would be included. Will the minister give an unequivocal guarantee to Australian seniors that the tax-free component of a superannuation stream—their own after tax hard-earned dollars—will be excluded from the income test for the seniors card?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I have tried to give the senator an answer to her question. As I say, it is very much about trying to provide equity in the system. We are trying to ensure that people are treated the same. If there is any other information I can get that assists the senator, I will ask the minister responsible to provide it. But, as I said, it is a very important measure that provides equity in treatment for Australian citizens. We hope it is a measure that is supported, but, if there is any further information I can get the senator, I will certainly take it on notice and get it for her.