Private Health Insurance (PHI) and its impact on your final tax position has seen some changes of late and these changes are impacting many of our clients. Holding Private Health Insurance to save tax is heavily advertised in the media around the end of each financial year, however it all depends on your individual and family circumstances as to whether a benefit will be received by holding PHI.
Some important things to note when considering private cover, from a tax perspective, are as follows:
- If your income is in excess of $88,000 as a single or $176,000 as a family and you do not hold PHI, you are liable for Medicare Levy Surcharge which is calculated as between 1%-2% of your taxable income depending on your income levels.
- The government rebate on PHI is now income tested so be sure to advise your provider of your families anticipated income level to ensure you do not have to repay rebate claimed throughout the year upon lodgement of your Tax Return.
- You must hold a minimum of 'Hospital Cover' for your PHI to reduce any Medicare Levy Surcharge payable.
As always, if you would like additional information or to discuss PHI and your specific circumstances please contact your Client Manager or Accountant and we are happy to assist.