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Private Health Insurance Rebate and Medicare Levy Surcharge Changes

From 1 July 2012, access to the private health insurance rebate becomes means tested by reference to how much income an individual earns. Not all taxpayers will be entitled to the 30% rebate. Some higher income -earning taxpayers will be entitled to a lesser rebate amount and individuals and families whose income is higher than the top threshold amount will no longer be entitled to any rebate at all.

The three-tier income thresholds also apply to calculate who has to pay the Medicare levy surcharge and how much they have to pay. The table summarises how much rebate an individual can claim if they have private health insurance and how much Medicare levy surcharge an individual has to pay if they don’t have sufficient private hospital cover from a private health insurer.

No Change Tier 1 Tier 2 Tier 3
Singles(Income)  < $84,000 $84,001 -$97,000  $97,001 -$130,000  >$130,001
Families(Income)  < $168,000 $168,001 -$194,000  $194,001 -$260,000  >$260,001
 % of insurancepremium =Rebate *  30%  20%  10%  0%
MedicareLevySurcharge %  0%  1%  1.25%  1.5%

*If you are over the age of 65, the rebate amounts are higher.

The way you claim your rebate (either directly from your private health insurer, though your tax return or from Medicare) should not change. If you are a higher income earner, the cost to you personally of your private health insurance is likely to be more because of this change.

Please advise your health fund of your income to adjust your rebate.

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