The Federal Government offers a rebate on private health insurance premiums where individual or family incomes fall below certain thresholds. Your eligibility for the rebate is income tested, and it phases out as your incomes increases.
Quite often we see taxpayers with fairly standard tax affairs receiving a reduced tax refund, or incurring a small tax liability because they claimed too much private health insurance rebate on their premiums. If you find yourself in this situation, you will be required to pay back the excess through your tax assessment.
You can easily avoid this problem by advising your health insurer that your income is above the threshold and disregard the rebate when calculating premiums.
While income thresholds have been frozen until 1 July 2018, the rebate percentage is adjusted on 1 April every year.
The Department of Health has released the following Private Health Insurance Rebate Percentages effective from 1 April 2017 to 31 March 2018.
|Status||Base tier||Tier 1||Tier 2||Tier 3|
|Single||$90,000 or less||$90,001 – 105,000||$105,001 – 140,000||$140,001+|
|Family||$180,000 or less||$180,001 – 210,000||$210,001 – 280,000||$280,001+|
|Age||Rebate for premiums paid, 1 April 2017 – 31 March 2018|
|65 – 69||30.256%||21.612%||12.966%||0%|
|Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.|
If you’re sure whether you are receiving the correct level of rebate on your premiums, we recommend you contact your private health insurance provider. For further information on how your private health insurance rebate impacts your tax assessment please contact us at Platinum Accounting & Taxation on 03 9746 6479 or join our following on Facebook for tax saving strategies and tips.