13 June 2012
Have you considered prepaying your private health insurance?
In the 2012 Budget, the government announced a new 'means test' for the private health insurance rebate. Depending on your level of income, in the future you may be entitled to far less of the private health insurance rebate than you previously received.
As the means testing will only apply from 1 July 2012, certain health insurers are allowing their members to prepay health insurance premiums prior to that date to preserve access to the 30% rebate entitlement. This strategy could save some taxpayers up to $1,500.
Although at this stage it is uncertain if this strategy will be effective in addressing the rebate means test issue, it will at the very least,"lock-in" the premium costs for that period.
The rates applicable for the year commencing 1 July 2012 are as follows -
It is important to note that the income on which the rebate is calculated includes:
If you believe you will fall into one of the higher tiers, consider contacting your health insurer to see if you are able to prepay your premium and minimise the impact of the new means test.
Have you considered prepaying your private health insurance?
In the 2012 Budget, the government announced a new 'means test' for the private health insurance rebate. Depending on your level of income, in the future you may be entitled to far less of the private health insurance rebate than you previously received.
As the means testing will only apply from 1 July 2012, certain health insurers are allowing their members to prepay health insurance premiums prior to that date to preserve access to the 30% rebate entitlement. This strategy could save some taxpayers up to $1,500.
Although at this stage it is uncertain if this strategy will be effective in addressing the rebate means test issue, it will at the very least,"lock-in" the premium costs for that period.
The rates applicable for the year commencing 1 July 2012 are as follows -
| Tier | Income |
Private health insurance rebate |
|||
| Singles: | Families: | Below 65 yrs |
65 to 69 yrs |
70 yrs or over |
|
| no tier |
$0 - $84,000 |
$0 - $168,000 | 30% | 35% | 40% |
| 1 | $84,001 - $97,000 |
$168,001 - $194,000 |
20% | 25% | 30% |
| 2 | $97,001 - $130,000 |
$194,001 - $260,000 |
10% | 15% | 20% |
| 3 | $130,001+ | $260,001+ | 0% | 0% | 0% |
It is important to note that the income on which the rebate is calculated includes:
taxable income + reportable fringe benefits + reportable superannuation contributions + net investment loss
If you believe you will fall into one of the higher tiers, consider contacting your health insurer to see if you are able to prepay your premium and minimise the impact of the new means test.
This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.