Seniors Discounts and Concessions

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During this post I will look at the discounts and concessions that become available in your retirement. In keeping with the financial theme of this blog, I look at them mostly from a financial point of view.

I will look at:

  • The Seniors Card
  • The Seniors Health Card, and
  • The Pensioner Concession Card

Seniors Card

The Seniors Card, provides access to transport concessions and discounts from participating businesses. It is free, administered by the states and territories and is not means tested. There are reciprocal arrangements in place which allow the use of the card in other states.

To be eligible to use the card, you need to  be 60 or over, not working more than a number of hours per week (20 in NSW, averaged over the year), and a permanent resident of the relevant state. In NSW you also need to have a Medicare card.

I will look at the NSW scheme as an example. Let’s look at the types of concessions available.

Transport Concessions

The main Transport concessions are:

  • Half priced tickets on ” buses, light rail, Sydney Ferries and Sydney and intercity trains, NSW TrainLink Regional train and coach services and Great Southern Rail services.”
  • Pensioner Excursion Tickets, which provide unlimited all day travel for, in early 2015, $2.50. The excursion ticket can be used for “unlimited travel all day in Sydney, Newcastle, the Hunter, Central Coast, Blue Mountains, Bathurst and Illawarra areas, by train, bus, ferry and light rail.”, but excludes “NSW TrainLink Regional services, charter services, event buses”.
  • Country Pensioner Excursion Tickets, which allows regional rail travel within NSW for, in early 2015, $2.50. Because it cannot “be bought or used for travel to or from locations or pass through the area bounded by and including Sydney, Nowra, Goulburn, Bathurst, Scone and Dungog”, this ticket seems to be targeted at traveling between country towns, or at least from the border of urban regions to country towns.
  • Regional Excursion Daily Ticket, which is the same as the Pensioner Excursion Ticket, but applicable to local bus networks in regional areas.

These concessions are excellent. Given the slower pace of life you can expect when you are retired, the above concessional rates, the availability of excellent public transport schedule apps and the convenience of the Opal card, public transport may be an acceptable alternative to owning a car.

Assuming my wife and I travel within Sydney 4 days a week, our annual transport costs would be $1,040. Without concessions, the cost would be more like $5000 (assuming $12 per day, rather than $2.50). In comparison, according to the NRMA, the cost of running a Mazda 3 would be approximately $9,360 per year. Substantial reductions in public transport costs make public transport more attractive when compared with car ownership.

Discounts from Participating Businesses

There are various discounts available from the NSW Government (e.g. 50% discount for Taronga Zoo, 10% discount for WEA courses), and very few from private businesses. None of the discounts appear to be from business that you would use regularly.

The Seniors Health Card

The Seniors Health card is a card that provides Health Care Concessions. It is administered by the Commonwealth Government and is means-tested. It appears that the benefits available under this card are a subset of the benefits under the “Pensioner Concession Card”. However there are different eligibility requirements. You may not be eligible for the Age Pension, but you may be eligible for the Seniors Health Card.

The main criteria for access to the Seniors Health Card are:

  • Being above the Age Pension age (67 for me at the moment),
  • Being able to pass an incomes test.

Note that there is no assets test. The amount of income permitted for a couple, in early 2015, is $82,400. Deeming rules apply to account based pensions. In my case, assuming the strategy we are planning in Retirement Calculations, the maximum deemed income + our rental income (in real 2015 dollars) we are expecting is $45,836, well below the limit. So, whereas we would not be eligible for the pension until around 74, we would be eligible for the Seniors Health card at 67 (maybe later if the Pension age goes up).

Seniors Health Care Card Benefits

The main benefit of the Seniors Health care card appears to be discounts on PBS medicines. This page provides information on the maximum that you can be asked to contribute for medicines with and without the Concession card. Once you have the concession card, the most you can expect to contribute per year is, in early 2015, $366 (rather than $1,454 with $6 for each prescription after the safety net is exceeded).

The other benefit of having the Seniors Health Card is that you will have access to:

Pensioner Concession Card

The Pensioner Concession card provides the same Health Care Concessions as the Seniors Health care card, but also provides access to additional state and territory based concessions.  To be eligible, you need to be eligible for the Age Pension.

Pensioner Concession Card Benefits

In NSW, the benefits described in the Seniors Health Care card benefits section, and the benefits described below are available to holders of the Pensioner Concession Card:

In addition, some other transport concessions become available when you get a Pensioners Card:

How long will these concessions last?

The 2014 federal budget eliminated the federal government portion of the joint state/federal government funding for most of the state-administered concessions. From my research above, most of these concessions are still in place, but may not be here for long! More information here and here. It appears that State Government is, for the moment, paying the shortfall. These cuts may be more about the Federal Government bullying the State Governments to support increases to the GST rather than cost reduction.

How do these Concessions impact our Retirement Plan?

Assuming these concession remain in place during our retirement (a big assumption), we can expect the following financial benefits:

After 60:

  • Up to $8000 per year, assuming we use public transport rather than own a car.

After 67 (may be 70):

  • Maybe around $1,000 per year due to savings in PBS prescriptions
  • Around $551 for the Energy Supplement.
  • Around $1350 for the Seniors Supplement (although there is legislation pending Senate approval to remove this).

After 74:

  • Around $1000 per year due to savings in council rates and electricity and water bills.
  • 2 x regional NSW train trips/year free.

As you can see, the major real benefit are transport concessions (hopefully they will keep these as it will save me buying a car!). Surprisingly, and contrary to my preconceptions prior to writing this blog, eligibility to the Age Pension does not result in significant concessions becoming available.

Conclusions

There is a grab-bag of concessions available to older Australians. The eligibility to the benefits vary in accordance with age and assets. Some of these concessions may not be available much longer, or may be less generous, as the Federal Government cuts back on supporting funding to the States, and as eligibility for federal concessions is tightened.

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