Private health insurance rebate and Medicare levy surcharge
From 1 July 2012, an individual’s entitlement to a private health insurance
rebate will be income tested. These changes are for the 2012-13 financial year.
Taxpayers will not be entitled to their current rate of rebate if their
income for Medicare levy surcharge purposes is either:
- a single income of $84,001 or more
- a combined family income of $168,001 or more.
There are also two new income thresholds where taxpayers will pay a higher
rate of Medicare levy surcharge at 1.25% or 1.5%.
| Income thresholds | ||||
| Singles | $0 – $84,000 | $84,001 – $97,000 | $97,001 – $130,000 | $130,001 and above |
| Families* | $0 – $168,000 | $168,001 – $194,000 | $194,001 – $260,000 | $260,001 and above |
| Private health insurance rebate | ||||
| Unchanged | Tier 1 | Tier 2 | Tier 3 | |
| Aged under 65 | 30% | 20% | 10% | 0% |
| Aged 65-69 | 35% | 25% | 15% | 0% |
| Aged 70 or over | 40% | 30% | 20% | 0% |
| Medicare levy surcharge | ||||
| Rates | 0% | 1% | 1.25% | 1.5% |
* The families’ threshold is increased by $1,500 for each dependent child
after the first. Families include couples and single parent families.
In May 2012, we will send letters directly to your clients. Your client will
receive this letter where we have estimated their income for surcharge purposes
is in the range where they will be affected by the changes.
Your client will receive this where one of the following applies to their
situation:
- they have private health insurance and claim the rebate as a premium
reduction - they have claimed the private health insurance tax offset
- they have paid Medicare levy surcharge.
The letter provides information to help your clients work out whether their
entitlement will decrease. Your client does not have to do anything. They may
choose to contact their private health insurer to reduce the rebate they
currently receive as a premium reduction to avoid incurring a liability at tax
time in 2013.
The letter to taxpayers that claimed the tax offset or paid Medicare levy
surcharge advises them of the changes. No action is required by the taxpayer.
TPB TAKES ALLEGED UNREGISTERED TAX AGENT TO FEDERAL COURT
The Tax Practitioners Board (TPB) commenced proceedings on 22 May 2012 in the
Federal Court, Sydney, against Mr Malcolm Campbell for alleged breaches of the
Tax Agent Services Act 2009 (TASA).
ATO warns people using New Zealand Foreign Trusts, but earning Australian income
Australian individuals and businesses who use ‘New Zealand
Foreign Trusts’ while earning their income from Australia are being cautioned by
the Australian Taxation Office (ATO) to be careful of these arrangements as they
are currently under investigation, including under Project Wickenby.
Building industry data matching
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1,500 prosecutions for tax and superannuation offences this financial year
The Australian Taxation Office’s (ATO) prosecution of more than 1,500 people
for tax and superannuation offences sends a clear warning to tax cheats that
they can expect to be caught.