Nick Bruining: Centrelink Low Income Health Care Card offers big discounts for those struggling on patchy pay

It’s the discount card with a punch that thousands of eligible Aussies are missing out on, simply because they’re not aware it exists.

Depending on your situation, the Centrelink-issued Low Income Health Care Card could save you anywhere from a few hundred dollars to thousands each year.

LIHCs are often available to people with patchy income, perhaps tradies or people involved in the gig economy. Seniors who retire early but aren’t yet old enough to receive a pension are also likely candidates for the LIHC.

Services Australia issues the card through Centrelink, which also tests for eligibility. For people aged over 18, eligibility depends on your weekly income, but no asset means test is applied.

The limits vary, depending on your family situation and if there are dependants involved.

For singles, average gross income over an eight-week period needs to be less than $769 a week — or a total of $6152 — over the same period.

For couples or a single with one dependant, the threshold is $1315 a week — or $10,520 over the eight-week period. Each additional child adds another $34 to the weekly amount.

Once the card has been issued, there’s a 25 per cent additional income buffer before you lose it. In other words, a single with a card could receive an additional $1538 over eight weeks before they would have to hand the card back. Similarly, a couple could earn an additional $2630 — or a total of $13,150 — over the eight-week period and still keep their cards.

A family of two adults and three dependent children with family income of less than $11,336 over an eight-week period would qualify for LIHCs, and that income could then increase to $14,170 before they would lose them.

Centrelink-assessable income is also quite different to tax-assessable income.

It includes gross income from employment, net investment property rental receipts and foreign pensions, but the actual earnings of financial investments such as bank accounts, dividends or managed fund distributions is completely ignored.

Instead, Centrelink uses its deeming system to determine the weekly income for the LIHC income test.

All financial assets — which include bank accounts, shares, managed funds, market-based income stream investments, cash and bullion — are deemed to be earning a notional rate of interest set by the Government.

Significantly, all of your money held in superannuation accumulation phase is ignored if you are aged under 67. That means if you just miss out, you could potentially put some money into super and qualify.

For singles, the first $60,400 of the financial asset total is deemed to be earning 0.25 per cent a year. Above this, it’s 2.25 per cent. For couples, the low 0.25 per cent rate applies to the first $100,200 of combined financial assets. This total figure is then divided by 52 to give a weekly amount.

A young family with $40,000 of financial assets, for example, has deemed income of just $1.92 a week attributable to their investments.

These deeming rates are the same used for pensions and allowances that have been frozen until July 2025.

Once you receive the LIHC, you or your family’s PBS listed prescriptions will be just $7.70 per prescription and once you reach $277.20 for the calendar year, you’ll pay no more.

The list of discounts available to LIHC holders applies to medicine, transport, utilities, legal fees and dental procedures.

Holders of the card receive a 60 per cent discount on Transperth and 50 per cent off TransWa tickets. More than $320 could be credited to your energy account each year, with additional credits for dependent children. You might also be eligible for air-conditioning credits as well.

Discounts also apply to State Government-owned attractions including museums, the Bell Tower, Rottnest Island tours, the Perth Mint and even Fremantle Prison.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association