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Private Health Insurance Rebate

The private health insurance rebate makes having health cover more accessible and affordable by applying a rebate to your premium. The rebate is an incentive for individuals and families to take out private health insurance. Depending on your income and age the rebate can help you reduce your premium, so you may pay less while getting the benefits private health cover has to offer.

 

Rebate changes

From 1 April 2014, a person’s rebate contribution from the Australian Government will increase based on a Rebate Adjustment Factor. The Rebate Adjustment Factor is determined using a formula which takes into account growth in the Consumer Price Index and the industry weighted average premium increase.

The rebate will continue to be paid as a percentage of premiums paid, excluding any Lifetime Health Cover loading that may be applicable.

 

Will I be affected?

If you earn above these amounts, you may be affected by the changes and receive less rebate. Take a look at the table below to see what it may mean for you.

The following rebate thresholds apply for the 2016/17 financial year.

   Income for MLS Purposes
Federal Government Rebate
Medicare
Levy
Surcharge
Age <65 Age 65-69 Age 70+
Age of the oldest person on membership
No Tier
No change
Single
Less than $90,000
Couple/Family
Less than $180,000
26.791% 31.256% 35.722% 0.0%
Tier 1
Single
$90,001 – $105,000
Couple/Family
$180,001 – $210,000
17.861% 22.326% 26.791% 1.0%
Tier 2
Single
$105,001 – $140,000
Couple/Family
$210,001 – $280,000
8.930% 13.395% 17.861% 1.25%
Tier 3
Single
More than $140,001
Couple/Family
More than $280,001
0% 0% 0% 1.5%

The following rebates apply after April 1 2017 for the 2017/18 financial year

   Income for MLS Purposes
Federal Government Rebate
Medicare
Levy
Surcharge
Age <65 Age 65-69 Age 70+
Age of the oldest person on membership
No Tier
No change
Single
Less than $90,000
Couple/Family
Less than $180,000
25.934% 30.256% 34.579% 0.0%
Tier 1
Single
$90,001 – $105,000
Couple/Family
$180,001 – $210,000
17.289% 21.612% 25.934% 1.0%
Tier 2
Single
$105,001 – $140,000
Couple/Family
$210,001 – $280,000
8.644% 12.966% 17.289% 1.25%
Tier 3
Single
More than $140,001
Couple/Family
More than $280,001
0% 0% 0% 1.5%

What happens if you claim the wrong rebate amount?

If from 1 July, you claim a higher rebate than you are eligible for on your Navy Health premium, the amount of the wrongly claimed will be added as a liability to pay back on your tax return for that year. If you think you’ll be affected, we recommend you nominate your rebate amount by logging into Online Member Services.

What happens if you drop your health cover?

If you fall into Tier 1, 2, or 3 and you do not have private hospital cover from 1 July, you will incur the Medicare Levy Surcharge (MLS) on your taxable income, which will be applied as per the table above.

If you are a serving member, you are currently exempt from the Medicare Levy, however you are not be exempt from the MLS (if you have a combined income with your partner) that will be calculated on your household ‘income test’.

So if you decide to cancel your private hospital cover, your combined household income (yourself and your partner) will be used to calculate any MLS that may apply, as per the above table, despite you serving full-time in the ADF. If you have any questions regarding your circumstances, please call us on 1300 306 289.

 

More Information

If you are still unsure about the changes and how they may affect you, we encourage you to call Navy Health Member Services on 1300 306 289.

 

 

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