Tax benefits of private medical cover?

[Pell]

I have been told by various parties that there are certain tax benefits/deductions available if one gets private medical cover, especially over a certain level of earnings? Where does the Medicare levy come into all this? ATO website not very clear on this....

Many thanks in advance!

[21yearsoutofrsa]

Australia has a medicare levy, which is collected as part of the tax collection process.

There are 2 parts to the levy

1 Medicare levy is 2% of taxable income, almost everybody will pay this, there are few exemptions

2 Medicare levy surcharge is an additional 1% to 1.5% of taxable income (depending on income) if you don't have private hospital cover.

https://www.ato.gov.au/Individuals/Medicare-levy/

https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/

So if you have private hospital over there is between a 1% and 1.5% tax benefit.

Edited July 18, 2014 by 18yearsoutofrsa

[Mara]

Regardless of the tax benefit, you will not go on a WAITING LIST, should you need something done, which is NOT life threatening!

[ruditrix]

Sorry for chipping in.

How would a person be able to put your mil on the medical aid as a dependant? We will have to put her with us and the to kids on private medical but nowhere do i find an option? Will she have to have her own stand alone medical aid?

[Bronwyn&Co]

Just a quick point - you only have to pay the medicare levy if you qualify for medicare. So unless you have PR or otherwise qualify for medicare, you can claim a refund of your medicare levy from the ATO. They can't charge you if you don't get the benefit.

Edited July 19, 2014 by Bronwyn&Co

[Mara]

Ruditrix, yes, you will have to get MIL her own medical cover.

[SurferMan]

I dont get any medicare benefits, been here 4 years on 457, and pay through my nose for private, and claim every eligible cent from the ATO. A nice cheque back every year.

[Bronwyn&Co]

I dont get any medicare benefits, been here 4 years on 457, and pay through my nose for private, and claim every eligible cent from the ATO. A nice cheque back every year.

Yep we did the same for 4 years. A bit of a pain but worth it for the refund.

[Nev]

I know you can claim your medicare rebate but are you claiming anything back on your private medical payments as well?

[SurferMan]

Did your private medical costs go down once you got PR? We are on an insane premium now.

Yes, we claim based on what the e-tax calculator allows us to do.

[MrandMrsK]

I dont mean to be the bearer of bad news, but just met with a tax consultant to do our fist Oz tax and he told me the following:

If you did not claim for medical benefits in 2013, you cannot claim in 2014. and 2014 is the last year to be able to claim for out of pocket medical expenses for everyone.

He said the rules changed very quietly last year, and the general public didnt hear about it so no noise was made about it!!

Eish, damn

sorry

[SurferMan]

Im not sure that makes sense, "benefits" vs insurance....Do you have a link to this to share with the forum?

[Drought]

He/she may have been referring to the medicare safety net threshold. This has been increased from $1220 to $2000. Essentially once your out of pocket expenses in terms of payments e.g. gap payments go past the $2000 you are eligible for rebates on that part which is more than $2000. So if you have many specialists that charge 'private" rates and saw them very frequently, this may come into play.

[MrandMrsK]

I dont have a link unfortunately, it was just part of a discussion.

My use of the word Benefits is incorrect. I meant Expenses, like the things you have to pay over and above your health insurance, or what is not covered by the insurance.

I have not figured out the system yet, so cannot even argue for myself. Just hope it does not affect too many people.

[SurferMan]

I used the e-Tax software, its friggin awesome.

[Bronwyn&Co]

Yeah I think what Drought said is correct. We got a letter from the Govt a few weeks ago saying something along the lines of 'You appear to be nearing your family medical threshold' or some such thing. I wonder how they figured that out.

[Drought]

Big Brother is watching!!!!

[Fish]

Yeah I think what Drought said is correct. We got a letter from the Govt a few weeks ago saying something along the lines of 'You appear to be nearing your family medical threshold' or some such thing. I wonder how they figured that out.

Out of pocket expenses portion of each medicare claim I think. You are probably over because the govts figure only includes expenses that were partially covered by medicare...it does not include fully private out of pocket expenses like dental, non pbs pharmacy things like headache tablets etc which can all be included in the medical expenses tax rebate.

But as MrAndMrsK said it is a moot point if you didn't claim last year as well due to this law change they snuck in.

Edited August 6, 2014 by Fish

[SurferMan]

Well I claimed the full private medical premiums cos I am not even registered for Medicare, let alone get benefits, so lets see where that goes. I followed the e-tax stuff guidelines. If that is correct, I am in for a fat refund. if not, well not so fat.

[Bronwyn&Co]

Well I claimed the full private medical premiums cos I am not even registered for Medicare, let alone get benefits, so lets see where that goes. I followed the e-tax stuff guidelines. If that is correct, I am in for a fat refund. if not, well not so fat.

You should get it, we always did. Yay!! Book your holiday in Fiji (or Vanuatu if you want adventure)

Edited August 7, 2014 by Bronwyn&Co