Income testing the private health insurance rebate
If the legislation is passed, from July 1, 2012 the private health insurance rebate and the Medicare Levy surcharge will be income tested.
The legislation gives effect to 2009 Federal Budget announcements concerning the private health insurance rebate and Medicare Levy Surcharge changes. The proposed changes mean than an income test to the 30% private health insurance rebate will apply for individuals whose income for Medicare levy surcharge purposes is more than $83,000pa and for families where that income is more than $166,000pa.
What does this mean?
It means individuals and families may not be eligible for the full 30% rebate for their private health insurance premiums. In conjunction with this, also from July 1, 2012, the rate of Medicare levy surcharge for individuals and families without private patient hospital cover may increase depending on their level of income.
The effect of these new tiers would be no rebate where individual income is over $129,000pa and families over $258,000pa.
For the purpose of calculating your income threshold, it is based on the definition of income used to calculate Medicare Levy Surcharge for individuals or families.
|< Age 65||30%||20%||10%||0%|
|MEDICARE LEVY SURCHARGE|
Information and Table sourced from the Department of Health and Aging website
Note: These thresholds are based on projected growth in Average Weekly Ordinary Time Earnings (AWOTE). The actual 2012-13 levels will not be known until the December AWOTE are released in February 2012. Thresholds increase by $1,500 for each child after the first. The family thresholds apply to single parent families.
If you are unsure on how you may be affected, contact us on 08 8132 9222 to speak to us to see how you may be impacted.
^John- General Manager, Professional Services