Health insurance tax treatment explained

(Australian Associated Press)

 

THE FEDERAL GOVERNMENT’S PRIVATE HEALTH INSURANCE LEVERS

THE CARROT

* The federal government will partially cover your private health insurance premium, depending on your income. The rebate applies to hospital, general treatment and ambulance policies.

If you are aged under 65, the private health insurance rebate ranges from around 26.8 per cent to 8.9 per cent of your premium, depending on your income. It cuts out once you earn more than $140,000 for singles and $280,00 for families.

If you are aged over 65, the rebate ranges from 35.7 per cent to 13.4 per cent of your premium, depending on your age and income. It cuts out once you earn more than $140,000 for singles and $280,00 for families.

THE STICKS

* If you earn more than $90,000 for singles or $180,000 for families and you don’t have private health insurance hospital cover you will slapped with an extra tax of between one and 1.5 per cent, depending on your income. This tax is called the Medicare Levy Surcharge.

* If you don’t have private health insurance hospital cover by your 31st birthday and then take it out when you’re older, you’ll be slugged a two per cent loading on top of your premium for every year you are aged over 30. This means if you take out it out aged 40 you will pay 20 per cent more than someone who first took out hospital cover at age 30. The maximum loading is 70 per cent.

Source: www.privatehealth.gov.au

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