private health insurace rebate

Last year the Australian government brought in new controversial changes to the private health insurance rebate scheme. 2013 saw more alterations, with the shifting of the rebate tiers. Rebate tiers affecting single’s income grew from $84,000 to $88,000 and families earning $168,000 is now up to $176,000. The means test introduced last year also cut out the rebate to individuals earning  over $136,000 and families with an income of over $272,000.

However, many Australians are not informing their private health insurance of changes in the tier they fall under, leaving them far worse off during tax time.

To avoid unwanted tax culpabilities at the end of the financial year, people must personally contact their health insurance to inform them of their appropriate tier level and allow the insurer to adjust their rebate level accordingly. Health insurers don’t have visible records of members’ income and are therefore unable to know which tier they fit into unless it is declared. It is compulsory for members to contact their health insurer and if not completed, members will have to go to the trouble of paying the Australian Tax Office at the end of the financial year.

There are even more changes set to come in April next year making families pay up to $300 more for health insurance. Yet the insignificant rise of the government’s 30% rebate will not keep apace with the increase. According to the changes made under the previous Labour Government, the health fund rebate will rise a mere 2.2% next year to account for inflation but will not match the amount health funds raise their premiums (7%). The policy change is expected to cost families an extra $47-68 a year.

Health funds made a formal notification of their intended premium rise a month ago – most funds will increase by 5.5-7%. This figure equates to 2 or three times the rate of general inflation. This is expected to save the government $700 million over the next three years, but the burden will then be placed on families.

It is important to be fully informed about the taxation changes and understand which health insurance policy is most beneficial to you. Seeking business management consultancy and financial services safeguards you and your tax by ensuring you are up to date with recent changes and alter your plans accordingly.

It is particularly vital for businesses to keep up to date with changes in corporate health insurance to receive the best plans and benefits possible. Nexia Australia provides expert consulting and accounting advice for individuals, families and businesses. If you are concerned or confused about the health rebate changes or you think it could affect your businesses start up, planning or selling solutions in Australia contact professional accounting services to make sense of all the changes and determine how you can best counteract the disadvantages.

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