When tax and health insurance team up, things can get a bit complicated. Or at least, they feel that way. But don't be scared of the fine print. Knowing how your cover can affect your return at the EOFY is pretty important, so we've got you covered with this rundown of the rebates, returns and other things you need to know about how your health insurance can affect your tax.
Is my health insurance premium tax deductible?
While you can't claim what you've spent on your health insurance at tax time, there are some things you should know about when the end of the financial year rolls around.
The key thing to be familiar with is the Australian Government Rebate on private health insurance.
What is the Australian Government Rebate on private health insurance?
The Australian Government Rebate on private health insurance is an amount the government may contribute towards your premium to make it more affordable.
How to claim the Australian Government Rebate on private health insurance
If you’re eligible, there are two ways to receive the rebate. First: you can choose to get the rebate by paying a reduced premium. To do this, you just have to nominate the income tier you fall under to ensure that we claim the right rebate amount for you. Second: you can claim your rebate through your annual tax return with Australian Taxation Office.
Am I eligible for the rebate?
To be eligible for the rebate, all people listed on the policy must be eligible to claim Medicare and your income must not be higher than the relevant income threshold.
How much is the rebate?
The rebate amount you're entitled to is based on the age of the oldest person on the policy and your income tier. Find out where you sit here.
Could health insurance affect my tax return?
It’s different for everyone. But if you earn more than the specified income* threshold, having private hospital cover may mean that you don’t have to pay the Medicare levy surcharge (MLS).
The MLS is a levy you may need to pay if you don't have an appropriate level of private hospital cover for you and all your dependants* and earn over $90,000 (for singles) and $180,000 (couples, families and single parents). (The income threshold for families goes up by $1,500 for each child born after the first child.) We have more info here on the Medicare Levy Surcharge.
*"Income" and "dependants" have special meanings for MLS purposes.