Act now to get the Private Health Insurance Rebate in 2013
As you may be aware, the Private Health Insurance Rebate will be means tested from 1 July 2012. Many individuals and families will have their 30% rebate cut or substantially reduced. The table below shows the % rebate that will apply from 1 July 2012 based on the income tier that is relevant to you. If you are currently paying premiums of say $3,600 per year after the 30% rebate, then the value of the rebate to you is $1,542.86.
If your rebate will be reduced or eliminated from 1 July because of your level of income, there is a one-time only opportunity to prepay your premium for up to 12 months and still obtain the 30% rebate. The rebate reductions do not apply to premiums paid by the end of June 2012 even though the premiums relate to the next year.
If you are affected by the rebate reduction we recommend that you consider prepaying your premiums for the next year and obtain the financial benefit. You should contact your health fund to ascertain how this can be done. As you can see from the example above, there are substantial savings to be obtained if you act now rather than just lose the rebate after 30 June.
If you are not affected by the change, but you know someone who is, feel free to pass this bulletin onto them.
This bulletin outlines the broad principles. Like any area of tax, the provisions can be complicated (especially the way in which income is calculated, as can be seen by the definition below). We suggest that you contact us if you would like confirmation of the potential benefits available to you by prepaying health insurance premiums.
The new Private Health Insurance Rebate regime applying from 1 July 2012 is set out below:
Rebate tier |
Unchanged |
Tier 1 |
Tier 2 |
Tier 3 |
Singles income* |
$0 - $84,000 |
$84,001 - $97,000 |
$97,001 - $130,000 |
$130,001+ |
Family income* |
$0 - $168,000 |
$168,001 - $194,000 |
$194,001 - $260,000 |
$260,001+ |
The Reduced Private Health Insurance Rebates from 1 July 2012
|
Aged under 65 |
30% |
20% |
10% |
0% |
|
Aged 65-69 |
35% |
25% |
15% |
0% |
|
Aged 70 or over |
40% |
30% |
20% |
0% |
The current Private Health Insurance Rebate, which applies until 30 June 2012 is:
 |
30% for individuals aged under 65 |
|
35% for individuals aged 65-69 |
|
40% for individuals aged 70 and above. |
* The means tested income is the sum of taxable income, reportable fringe benefits, total net investment losses and reportable superannuation contributions (including both reportable employer superannuation contributions and deductible personal superannuation contributions) less some superannuation lump sum payments and some foreign employment income.
Published : 4 May 2012