Pre Pay Your Private Health Insurance Before 30 June
The Federal Government has passed legislation that will change how private health insurance is subsidised. These changes may affect you.
There are two legislative changes and they come into effect from 1 July 2012:
– Introduction of income testing for the Federal Government Rebate on health insurance; and
– Increase to the Medicare Levy Surcharge for some tax payers.
The Federal Government currently subsidises every Australian resident’s private health insurance premium in the form of a tax rebate. From 1 July 2012, under the Government’s new legislation, higher income earners will receive a lower or no rebate.
Will you be affected?
You will only be affected by this change if your income for surcharge purposes for the 2012-13 financial year will be greater than $84,000 for singles or $168,000 for couples and families.
If you are at or below these thresholds your rebate and premium will be unaffected, and you don’t need to do anything.
By prepaying your health insurance premium you may still be eligible for private health insurance tax rebate and save up to $1,600 on your cover.
Where is the opportunity?
If you are affected for the 2012/13 financial year, it’s possible there is a step you can take. If you check with your Health Insurance provider and ask the following:
Can I prepay 12 months of premiums in advance?
If the answer is ‘yes’, ask your provider if they will apply the 30% rebate on this prepayment.
The Australian Taxation Office has now confirmed the rebate entitlement will be effective where prepayment is made before 30 June 2012. A number of the Private Health Funds and the peak industry body are actively promoting this to their members. If you are likely to be affected by these changes we recommend speaking with your private health insurer.
Should you require further information please contact your advisor at Pilot Partners (07) 3023 1300 or [email protected]