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As from the 1st July 2012 changes are being made to the Medicare Levy Surcharge and the Private Health Insurance Rebate.

The Medicare Levy Surcharge has always been a penalty for having a higher income and not having private health insurance. The levy now increases above the 1% of previous years to a new maximum of 1.5% if your income is greater than $130,000 for a single person and $260,000 for a family.

What has significantly changed is the Private Health Insurance Rebate, the Rebate was either received as a reduction to your Private Health Insurance premiums or as a rebate on your lodged tax return. The rebate depending on your age would have been a minimum amount of 30%. Income thresholds now apply to the rebate, if your income is greater than $130,000 for a single person and $260,000 for a family you will now long receive any rebate to reduce your private health insurance premiums.

Please follow the table below to see how your situation may have changed.

Unchanged Tier 1 Tier 2 Tier 3
Singles

$84,000 or less

$84,001-97,000

$97,001-130,000

$130,001 or more

Families*

$168,000 or less

$168,001-194,000

$194,001-260,000

$260,001 or more

Rebate
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
Rate

0.0%

1.0%

1.25%

1.5%

Your income for surcharge purposes includes your:

  • taxable income (including the net amount on which family trust distribution tax has been paid)
  • exempt foreign employment income if your taxable income is $1 or more
  • reportable fringe benefits amount, as reported on the payment summary
  • total net investment loss (includes both net financial investment loss and net rental property loss)
  • reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).
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