Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share 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.