Private Health Insurance Rebate Changes from 1 July 2012

As a result of the 2009-10 Federal Budget, the government will be introducing an income test for the Private Health Insurance Rebate to apply from 1 July 2012.

The rebate, which can be received as a reduction in policy premiums or as a rebate on your tax return, is currently 30%. From 1 July 2012 that rebate and AND the Medicare Levy Surcharge will be income tested against three income tier thresholds.

The ATO says the  "Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase."

The table below illustrates the income thresholds and rates to apply:

Unchanged Tier 1 Tier 2 Tier 3
 Singles $84,000 or less $84,001-$97,000 $97,001-$130,000 $130,001 or more
 Families $168,000 or less $168,001-$194,000 $194,001-$260,000 $260,001 or more
Aged under 65  30%  20%  10%  0%
Aged 65-69  35%  25%  15%  0%
Aged 70 or over  40%  30%  20%  0%
Medicare levy surcharge
 Rates  0.0%  1.0%  1.25%  1.5%

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle - checklist of eTax and Assessable Income and deductions and checklist of eTax and Allowable Deductions.

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