We have recently heard from a few clients asking about the changes to the above card. From 1 January 2015 there has been a major change in the rules for this card being that the new rules deem income from account based income streams – these were previously exempt as they are not included in your taxable income. This may mean that some people may not be entitled to the card from this date. The current income thresholds for these cards are $51,500 for singles and $82,400 for a couple. The currently announced deeming rates will be 1.75% and 3.25% from March 2015.
It is important to note that the Government introduced some Grandfathering rules which help to minimize the impact on those people who are already retired. Account based pension which commenced prior to 1 January 2015 will be exempt from the deeming rules until the pension ceases. This pension ceases could be from changing income stream providers, commuting the pension or leaving Australia for a period of greater than 19 weeks. It is important to note that once an account based pension loses its grandfathered status, it cannot be re-obtained.
If you require further information on these changes please contact Matthew Grapsasat our office.