The benefit of private health insurance for Aussies is sometimes unclear and confusing, especially when we all benefit from the Medicare scheme anyway, so why bother with the hassle? When tax time comes back around, there are four compelling reasons why all Aussie should get health insurance, which your pocket will probably thank you for.
When tax time comes back around, there are four compelling reasons why all Aussie should get health insurance, which your pocket will probably thank you for.
One of the primary, non-financial-related reasons to opt for private health insurance cover is obviously the healthcare itself. We can take out policies which give them access to far more healthcare options which aren’t covered in Medicare.
Not only that but private healthcare means you might be entitled to shorter wait times for procedures and a choice of practitioners, treatments and facilities.
The Medicare levy surcharge means the government will take $1-1.50 of every $100 non-privately insured Aussies earn (who earns over $90,000 per year).
For example, someone on a $110,000 per year salary without private health insurance will be required to pay around $1100 in tax at the end of the financial year – around the same cost as a basic insurance policy.
And the more you earn, the bigger the incentive.
Lifetime health cover surcharge
The lifetime health cover surcharge tax raises the cost of private health cover for everyone over 31 in attempt to urge people to join private health cover early. Sign up, and stick with, private health insurance before your 31st birthday and you’ll pay no surcharge, but for every year you delay, the government surcharge hikes up another 2%.
This means that by the time you’re 40 you could be paying a 20% premium.
Aussies with an eligible private health insurance policy, who earn less than $140,000 (or have a combined income of less than $280,000), are entitled to a private health insurance rebate. This is anywhere between 27.8% and 9.2% for those under 65 years, depending on your income tier.