Private Health insurance Rebate - Budget Changes

The 2009 Budget has introduced three new ‘Private Health Insurance Tiers’ to better balance the mix of incentives for people to take out private health insurance and will apply from 1 July 2010.

The existing 30% through to 40% PHIR arrangements will remain in place for singles with income of less than $75,000pa and families with income of less than $150,000pa.

  • Tier 1 applies to singles with income of more than $75,000 (more than $150,000 for families). The PHIR will be 20 per cent if under 65, increasing to 25 per cent from age 65 and 30 per cent from age 70. The surcharge for not taking out private health insurance will remain at 1 per cent.
  • Tier 2 applies to singles with income of more than $90,000 (more than $180,000 for families). The PHIR will be 10 per cent if under 65, increasing to 15 per cent from age 65 and 20 per cent from age 70. The surcharge for not taking out private health insurance will increase to 1.25 per cent.
  • Tier 3 applies to singles with income of more than $120,000 (more than $240,000 for families). There will be no PHIR. The surcharge for not taking out private health insurance will be increased to 1.5 per cent.

(Source: AMP Financial Planning Pty Ltd)

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