Starting a family is a dream for many, but for some this can be challenging and brings up a mix of emotions like stress and uncertainty.
Did you know that having health insurance can save you money on your tax? With the end of June just around the corner, now's the perfect time to understand how private health the can benefit you.
Understand the Medicare Levy Surcharge (MLS)
The Australian Government introduced the Medicare Levy Surcharge (MLS) to motivate high-income earners to get private hospital cover and ease the load on the public health system.
For the 2024-25 financial year, if your income tops $97,000 (or $194,000 for couples or families) and you don't have private hospital cover, you'll be hit with the MLS. This surcharge is on top of the standard 2% Medicare Levy and ranges from 1% to 1.5% of your taxable income. Read more on MLS at privatehealth.gov.au or refer to the table below to see how much you could be getting charged.
| Medicare Levy Surcharge | 0.00% | 1.00% | 1.25% | 1.50% |
|---|---|---|---|---|
| Singles | $97,000 or less | $97,001 - $113,000 | $113,001 - $151,000 | $151,001 or more |
| Families (single parents and couples) | $194,000 or less | $194,001 - $226,000 | $226,001 - $302,000 | $302,001 or more |
That said, maintaining private hospital coverage throughout the entire financial year means you are exempt from the surcharge. If you however only you hold hospital cover for part of the year, you may only be partially exempt from the MLS come tax time.
Beat the Lifetime Health Cover (LHC) deadline
Turning 31 soon? It's a good idea to consider getting private hospital cover now.
if you don’t take out private hospital cover before the 1st of July following your 31st birthday, you'll pay an additional 2% on your premiums for every year you delay, up to a maximum of 70%. This loading sticks around on your policy for a solid 10 years. So, getting hospital cover now will save you money in the long run. Learn more about LHC at privatehealth.gov.au or watch the below video.
Benefit from rebates
To make private health insurance more affordable, the Australian Government offers a rebate to help cover private health insurance premiums. The rebate applies if you’re eligible for Medicare and is income-tested, meaning it depends on how much you earn and how old you are.
For families, there's a bit of extra good news. The income thresholds increase by $1,500 for each extra child after the first.
Plus, you have options on how to get your rebate. You can either get it upfront as a discount on your premiums or claim it when you do your taxes. If you opt for the rebate to lower your premiums, remember to tell your health fund of any income boosts, so you don't end up with a tax surprise. Check out more details at privatehealth.gov.au or glance at the table below for a quick guide.
| SinglesFamilies | ≤$97,000≤$194,000 | $97,001-113,000$194,001-226,000 | $113,001-151,000$226,001-302,000 | ≥$151,001≥$302,001 |
|---|---|---|---|---|
| Rebate | Base Tier | Tier 1 | Tier 2 | Tier 3 |
| Below age 65 | 24.608% | 16.405% | 8.202% | 0% |
| Ages 65- 69 | 28.710% | 20.507% | 12.303% | 0% |
| Over age 70 | 32.812% | 24.608% | 16.405% | 0% |
We know health insurance can be confusing, and we’re here to make it easy. Our friendly contact centre team is ready to take your call and help you finding the right health cover for your needs and budget.
Talk to our insurance experts today on 1300 661 283 or get an online quote to see how much you could start saving - it only takes 20 seconds!
News03 June 2024
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