Legislation to apply an income test to the Private Health Insurance Rebate scheme has passed the Australian House of Representatives, and is expected to pass the Senate when it resumes in late February. The measure is designed to save tax payers $2.4 billion over the next three years.
If the Senate passes the new legislation as expected, the 30% rebate will be means tested for singles earning more than $83,000 and couples earning more than $166,000, with a progressive reduction of the rebate. Singles earning more than $129,000 and couples earning more than $258,000 will lose the rebate altogether. The rate of the Medicare levy surcharge is also under review, and expected to increase for individuals and families without private health insurance.
So if you're a business owner, how will this affect you?
Expected to take effect by 1 July 2012, the income test will include the sum total of a person's taxable income, fringe benefits, net investment losses and super contributions.* Talking to your accountant will help you to understand what the financial impact of the new legislation is likely to be on your hip pocket and for your employees.
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Last updated February 2012. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.