Proposed changes to introduce an income test for the 30% private health insurance rebate

Tax Law: 23 March 2019

• Singles whose income for surcharge purposes is from $80,001pa to $93,000pa inclusive and couples/families whose income for surcharge purposes is from $160,001pa to $186,000pa inclusive in the 2011-12 financial year, who hold a complying private health insurance policy, will have their private health insurance rebate reduced from 30% to 20% in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. The Medicare levy surcharge will remain at 1% for these singles and couples/families who do not hold appropriate private health insurance.
• Singles whose income for surcharge purposes is from $93,001pa to $124,000pa inclusive and couples/families whose income for surcharge purposes is from $186,001pa to $248,000pa inclusive in the 2011-12 financial year who hold a complying private health insurance policy, will have their private health insurance rebate reduced from 30% to 10% in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. From 1 January 2012, the Medicare levy surcharge will be increased by 0.25 percentage points to 1.25% for these singles and couples/families who do not hold appropriate private health insurance.
• Singles whose income for surcharge purposes is from $124,001pa and over and couples/families whose income for surcharge purposes of $248,001pa and over in the 2011-12 financial year who hold a complying private health insurance policy, will no longer receive any private health insurance rebate in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. From 1 January 2012, the Medicare levy surcharge will be increased by 0.5 percentage points to 1.5% for these singles and couples/families who do not hold appropriate private health insurance.

Please note: The information in this article is provided for general information purposes only and does not constitute legal advice. It is not intended to be comprehensive or to apply to any specific circumstances. You should seek independent legal advice before acting on any information contained in this article.