A taxpayer who expects to exceed the surcharge income thresholds in the 2012-13 income year might consider pre-paying private health insurance premiums in the current year. While there is nothing in the Tax Act to prevent the pre-payment of private health insurance premiums before 30 June 2012, it is not entirely clear whether this strategy will preserve an entitlement to a full tax offset. However, the Minister for Health, Tanya Plibersek, has indicated that a taxpayer who may be ineligible for the offset after 1 July 2012 but who prepays their 2012–13 insurance premiums before 30 June 2012 would be entitled to the offset in the 2011-12 year. For example, if you have a family with combined income in excess of $260,000, on a policy costing $4,500 by prepaying your private health insurance you would generate savings of $1,350. This is a once-off saving opportunity!
Below is a table showing the income and rebate levels for the coming year:
|
Table: Private Health Insurance Incentive Tiers from 1 July 2012
|
| Tier |
Income ($) |
Private health insurance rebate |
Medicare levy surcharge |
| Singles |
Families |
Under 65 yrs old |
65-69 years old |
70 years or over |
| 0 – 84,000 |
0 – 168,000 |
30% |
35% |
40% |
Nil |
| 1 |
84,001 – 97,000 |
168,001 – 194,000 |
20% |
25% |
30% |
1% |
| 2 |
97,001 – 130,000 |
194,001 – 260,000 |
10% |
15% |
20% |
1.25% |
| 3 |
130,001 + |
260,001 + |
0% |
0% |
0% |
1.5% |
|
