In 1999, the federal government introduced a private health insurance rebate of at least 30%, to help Australians with the cost of private health insurance premiums. In July 2012, this rebate began to be means-tested and the proportion of rebate that you receive is now dependent on your income threshold and your age.
Currently, the thresholds are as follows:
|Threshold||Tier 1||Tier 2||Tier 3|
|Under 65 years old||30%||20%||10%||0%|
|65-69 years old||35%||25%||15%||0%|
|70 years old or over||40%||30%||20%||0%|
Current as of 20/05/2013
This rebate can be claimed in your tax return or claimed as a reduced premium. Be aware that you may receive an expensive surprise in the form of a tax bill if you claim it as a reduced premium throughout the year, only to discover when your submit your tax return that you were not entitled to it!
For both the surcharge and the rebate, “income” is the sum of:
- taxable income, including the net amount family trust distribution that tax has been paid on
- reportable fringe benefits
- total net investment losses, including both net financial investment losses and net rental property losses
- reportable super contributions, including reportable employer super contributions and deductible personal super contributions
- if you are 55-59 years old, any taxed element of a super lump sum, other than a death benefit, which you received that does not exceed your low rate cap.
While you can’t avoid the mean test you can help to mitigate the increased cost by shopping around for a great-value health insurance policy that matches your needs.