Proposed changes to introduce an income test for the 30% private health insurance rebate

Tax Law: 23 March 2019

• Singles whose income for surcharge purposes is from $80,001pa to $93,000pa inclusive and couples/families whose income for surcharge purposes is from $160,001pa to $186,000pa inclusive in the 2011-12 financial year, who hold a complying private health insurance policy, will have their private health insurance rebate reduced from 30% to 20% in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. The Medicare levy surcharge will remain at 1% for these singles and couples/families who do not hold appropriate private health insurance.
• Singles whose income for surcharge purposes is from $93,001pa to $124,000pa inclusive and couples/families whose income for surcharge purposes is from $186,001pa to $248,000pa inclusive in the 2011-12 financial year who hold a complying private health insurance policy, will have their private health insurance rebate reduced from 30% to 10% in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. From 1 January 2012, the Medicare levy surcharge will be increased by 0.25 percentage points to 1.25% for these singles and couples/families who do not hold appropriate private health insurance.
• Singles whose income for surcharge purposes is from $124,001pa and over and couples/families whose income for surcharge purposes of $248,001pa and over in the 2011-12 financial year who hold a complying private health insurance policy, will no longer receive any private health insurance rebate in relation to premiums and amounts in respect of premiums paid on and after 1 January 2012. From 1 January 2012, the Medicare levy surcharge will be increased by 0.5 percentage points to 1.5% for these singles and couples/families who do not hold appropriate private health insurance.