Part pensioner
Part pensioner "Mary” agreed to do some extra part-time work for her boss at Christmas, but that decision ended up costing her a packet. JULIAN SMITH

Former pensioners getting a lousy hand

WHEN the pension asset test was tightened on January 1, those who lost their pensions were promised an automatic health care card. Many received this, but some unlucky pensioners missed out.

Any pensioner who owned their home with assets above $817,000 for a couple or $542,500 for a single, lost their pension. The pension is calculated under an income test and an asset test and the lower amount is paid.

Under the income test you are allowed six fortnights when your income can be temporarily above the limit and still retain your pension card and its entitlements. When your income drops again the pension payments resume.

Take the example of Mary, a 66-year-old widow who owns her own home and does some part-time work, earning $375 per week. Mary had $500,000 in investments, a car worth $20,000, household contents of $5000 and $25,000 in the bank.

Last year, Mary was receiving a part pension of $365 per fortnight and a pensioner concession card. 

Her employer asked Mary to do some extra shifts over Christmas and this lifted her wages to $775 a week. This meant she received no pension at the end of December because her income was above the limit. 

Mary knew she wouldn't receive any pension after January 1 because of her assets but expected to receive the automatic health care card to compensate for the loss of her pension card. This didn't happen - because of an obscure pension rule that said she was affected by the income test not the asset test on January 1, even though her assets were above the new limit.

So Mary now has to pay $40 every time she goes to the doctor because she has lost bulk billing. She has to pay an extra $1100 a year for chemist scripts. And her rates have gone up by another $235 because she no longer has a concession card. All this because she earned an extra $800 over Christmas.

Mary is much worse off financially because of a pension rule. Had Mary known about this she, could have decided not to work and received the automatic health care card. But there was no information on any government websites and it seems few people knew about it.

In the latest Budget the government has proposed to return the pension cards to those that lost it on January 1. However if the same rule is applied, Mary will miss out again.

When it comes to cards some former pensioners continue to get a lousy hand. 

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: