Seniors Health Card, property, inflation and work test are top of mind for advisers

More Australians are expected to be eligible for the Commonwealth Seniors Health Card soon, due to an imminent regulatory change aimed at easing cost of living pressures for seniors.

In addition, more Australians who are selling their homes will be able to make downsizer contributions into super, with the eligibility age reducing to 55 years, pending legislation which could come into effect in coming months.

Meanwhile, high net worth individuals planning to move to retirement phase might consider delaying their plans, as the maximum amount that can be transferred to tax-free retirement income streams is expected to be indexed to $1.8m, from the current $1.7m.

These are just some of the topics that are top of mind for financial advisers in this quarter, based on the questions they are asking BT.

Tim Howard, Technical Consultant, BT, said, “The upcoming regulatory changes can present advice opportunities, as many clients may not be aware of how the rules apply to their circumstances.”

Financial advisers seeking clarity on technical topics regarding superannuation, tax and social security regularly contact BT’s Technical Services team, who field over 2,000 queries from advisers every quarter. “Often, advisers are asking us about their clients on a case-by-case basis because the rules can be complex,” Mr Howard said.

The most popular queries raised by advisers so far in the July to September 2022 quarter are below.

1. Income thresholds for Seniors Health card increase by more than 50%

For the first time in over 20 years, the income thresholds for the Commonwealth Seniors Health Card will be raised (outside of indexation), pending legislation which is currently in Parliament.

If passed, the income thresholds for singles will increase to $90,000 from the current $57,761; for couples, the increase is $144,000, from $92,412 currently.

“Becoming eligible for the Commonwealth Seniors Health Card gives you access to valuable concessions, such as cheaper medicine under the Pharmaceutical Benefits Scheme. Visits to the doctors can potentially be bulk-billed and people can receive a refund of medical costs when they reach the Medicare safety net. Additionally, card holders may also receive economic support payments which were worth $1,000 across 2020 and 2021,” Mr Howard said. 1

Around 44,000 more Australians are expected to qualify for the Seniors Health Card, if the bill passes.

“Notably, following the passing of Queen Elizabeth II, Parliament was suspended for a short period,” Mr Howard said. “However, the effective date of the new income thresholds is expected to remain the same, 20 September 2022.”

2. Downsizers

More Australians are expected to be able to make a downsizer contribution into super – up to $300,000 – with the eligibility age expected to reduce to 55 years, from the current 60 years, in coming months.

“Advisers with clients who are about to turn 55 years of age, and are planning to sell their home, may wish to consider the timing of the legislation,” Mr Howard said. The legislation is currently in Parliament, and is expected to pass and receive Royal Assent – and come into effect – either on 1 October 2022 or 1 January 2023.

To be able to contribute proceeds from a property sale into their super, clients need to have owned their home for 10 years or more. A downsizer contribution doesn’t count towards any of the contribution caps, and can still be made even if a person has total super savings greater than $1.7m. 

3. Home Equity Access Scheme

Considerably more senior Australians are participating in the home equity access scheme (HEAS), 2 and take-up is expected to increase due to recent changes which have made the scheme more flexible.

The HEAS allows Australians, who are of age pension age, to enhance their income in retirement by accessing the equity in a property they own. Prior to 1 July, an eligible person could only receive their loan amount as a fortnightly payment. Similar to what is generally available from a commercial reverse mortgage, lump sum advance payments are now also an option under the scheme. Any lump sum is capped at 50% of the participant’s maximum pension rate.

Alternatively, a scheme participant may choose to take a partial lump sum amount and then the remainder as a fortnightly payment.

“While the HEAS may suit some senior Australians, there are many considerations that should be weighed up,” Mr Howard said. “Using your existing property as security for a HEAS loan has the potential to impact on estate planning, so some Australians who are eligible may be hesitant about taking part in the scheme.”

4. Inflation set to increase transfer balance cap to $1.8m 

Based on the current trajectory of the Consumer Price Index, the general transfer balance cap is expected to increase to $1.8m from 1 July 2023, unless legislative changes are introduced.

The transfer balance cap is the amount of superannuation that can be transferred to tax-free retirement income streams, and is currently at $1.7m.

“High net worth individuals who aren’t in a hurry to start a pension may want to hold off until then,” Mr Howard said. “However, it’s worth noting that, with Australia’s inflation reaching its highest level in over 20 years, there is a possibility that the Federal Government could freeze the indexation of certain thresholds such as the transfer balance cap.” 

5. Work test requirements

The application of the work test rules is consistently one of the most popular technical topics among advisers.

Individuals aged between 67 and 74 who have recently retired may be eligible to make personal deductible contributions to super, if they meet certain eligibility criteria around their previous year of work and their total super balance.

Generally, to claim a deduction for a personal contribution, if a super fund member is between the ages of 67 and 74 they ‘must have been gainfully employed for at least 40 hours in any period of 30 consecutive days during the financial year in which the contribution was made.’ 3

An exemption to the work test applies only if the person meets another set of criteria. People who have not been gainfully employed during the financial year can still make a personal deductible contribution if: they met the work test in the financial year immediately prior to the year of the contribution; and they have a total super balance of less than $300,000 at the end of the previous financial year; and they had not previously used the work test exemption in a previous financial year to make a contribution to any regulated super fund.

“In addition to these five popular topics, the Quality of Advice Review is top of mind for advisers; and the industry is anticipating potential regulatory changes to flow out of the recommendations,” Mr Howard said. 


1 Services Australia:

2 According to Services Australia, the number of participants in the scheme has grown to 6041 by 30 June 2022, compared with 768 three years ago, referenced by Sydney Morning Herald: Fitzsimmons, C (2022). ‘Soaring number of older homeowners take out government-backed reverse mortgages’, SMH, 7/8/2022:

3 Income Tax Assessment Act 1997 – SECT 290.165 (1A) (a)

This information was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian Credit Licence 233714 (Westpac) and is current as at 20 September 2022. The information provided is general information only and it does not constitute any recommendation or advice. It is intended to provide an overview or summary and should not be considered a comprehensive statement on any matter or relied upon as such. Any recommendation or opinion provided does not take into account your personal objectives, financial situation or needs, and you should consider its appropriateness having regard to these factors. Any taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and our interpretation.


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Lisa Parrett
Media Relations, BT
M: 0432 933 796