16 April 2012
New private health insurance means test
Singles earning more than $129,001 and families earning more than $258,001 will lose access to their private health insurance rebate from the 2012-13 financial year onwards, under a means test that recently secured passage through the House of Representatives and which will be effective on July 1, 2012.
The measures - which still have to pass the Senate, expected to be a formality- also mean the Medicare surcharge for the groups above will increase from 1% to 1.5% if they do not take out private health insurance. That translates into $1,935pa for high-earning singles and $3,870pa for high-earning families.
At present, almost anyone aged less than 65 years old, regardless of how much they earn, can get a 30% refund from the federal government for the cost of their private health insurance. Those aged between 65 and 69 years old can receive a 35% refund and those aged over 70 years old can get 40% back.
The income test is based on the total sum of the taxable income, reportable fringe benefits, reportable super contributions and total net investment losses, less other taxed elements depending on a person's age and circumstances.
Below is a breakdown of the private health insurance tiers for 2012-13:
| Tier | Income |
Private health insurance rebate |
Medicare Levy surcharge |
|||
| Singles: | Families: | Below 65 yrs |
65 to 69 yrs |
70 yrs or over |
||
| no tier |
$0 - $83,000 |
$0 - $166,000 | 30% | 35% | 40% |
nil |
| 1 | $83,001 - $96,000 |
$166,001 - $192,000 |
20% | 25% | 30% |
1% |
| 2 | $96,001 - $129,000 |
$192,001 - $258,000 |
10% | 15% | 20% | 1.25% |
| 3 | $129,001+ | $258,001+ | 0% | 0% | 0% |
1.5% |