lozzachino Posted March 7, 2014 Report Share Posted March 7, 2014 Ok i have read pretty much every thread, asked around and read lots of info on the private insurance companies websites and am still confused! can anyone confirm if you do not take out health insurance, after your first years grace, are you charged an extra % for the government medicare levy at the end of the tax year? Does this apply to everyone or only people who are over the $88k single income/$176k joint income threshold? Some people have said to me this is the case, others say the increased 1/2% levy for every year you havent had private cover only applies to your private medical insurance premiums should you choose to take a policy out in future. And therefore your medicare levy is unaffected until you earn over the thresholds stated above or you take out private cover? after looking into it we are considering taking only extras cover, not hospital. Can anyone advise if this counts as health insurance for the medicare levy purposes, and therefore we will not be taxed more if we take this our before our one year grace period? hope that makes sense! Quote Link to comment Share on other sites More sharing options...
Rossmoyne Posted March 7, 2014 Report Share Posted March 7, 2014 Absolutely no idea but I would be interested in the answer..... hope someone can bring light on this! Quote Link to comment Share on other sites More sharing options...
lozzachino Posted March 7, 2014 Author Report Share Posted March 7, 2014 Me too! Its driving me crazy and i refuse to pay a tax person to tell me! Quote Link to comment Share on other sites More sharing options...
wee_me Posted March 7, 2014 Report Share Posted March 7, 2014 Hi if you earn over a certain amount you pay an extra tax (levy) for Medicare if you don't have private insurance - if you have private insurance you don't pay the Medicare levy. We took out private insurance so we don't pay the fee; the private health insurance was a lot cheaper than the Medicare levy. I got corporate health cover for me and husband for $162 a month. Here is income limits http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/mls.htm if you don't take out private health insurance within first year (I think) of arriving you will start to incur extra charges when you eventually take it out. The health insurance people are very helpful (I'm with BUPA) they answer all sorts of questions think they are used to migrants who aren't used to the system. Also the health insurance is different here it's not like the UK Quote Link to comment Share on other sites More sharing options...
ali Posted March 7, 2014 Report Share Posted March 7, 2014 I know our first full tax year we got stung for almost $1,000 levy, hubby took out hospital cover afterwards and we haven't paid any levy since (I don't deal with this so don't know the in's and outs) Quote Link to comment Share on other sites More sharing options...
lozzachino Posted March 8, 2014 Author Report Share Posted March 8, 2014 So the extra levy only applies when you eventually take out private cover? and the extra medicare levy only applies if you earn over the thresholds? can anyone confirm if extras cover is sufficient to avoid the medicare levy? We are not anywhere near the joint threshold but would just like to know. Quote Link to comment Share on other sites More sharing options...
wallywombat Posted March 8, 2014 Report Share Posted March 8, 2014 (edited) Hi there, I thought I would share the info I researched a couple of weeks ago. Spent a few hours working through it but thee info is all find on ATO (eventually!!) . So here goes.... From what I understand, there are 3 medical charges to be aware of: Medical Levy (ML) Most taxpayers pay this and it is 1.5% of taxable income; exceptions include low income and new residents in their first year.( http://www.ato.gov.au/Individuals/Medicare-levy/) Medical Levy Surcharge (MLS) This is in addition to the ML. This is the one you will pay if you earn over a certain amount and don’t have private health insurance (and I think this is the one people say they get stung with!!) If you earned a joint income of $168K, you would have to pay a MLS of $2,520 for the year if you didn’t have adequate private insurance. This is where it’s usually your best interest in taking the private insurance. http://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/ Lifetime Health Cover (LHC) This isn’t directly related to your tax issues but rather an overall government initiative to encourage people to take private hospital cover. Basically, if you are over 30 and don’t have private hospital health cover, if you decide to take it at a later date, they will charge you a LHC which is 2% loading on top of your premium for every year you are aged over 30 (and will charge this for 10 years). If you are new resident, you have a year’s grace if your are over 30 to take the cover, but if you were to decide not to take anything now and take it later, they would calculate the LHC from your age and not from the time when you first landed. All of the information is here: http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/lifetimehealthcover.htm I hope this helps breaking down the various charges. I have yet to take a tax course here but did find all the information through the ATO website (and some might think I am odd to enjoy looking things like this up but don’t like the government to get one over on me....or I like to know exactly how they are getting one over on me!!). I have been misinformed on many occasions by colleagues here and I think there has obviously been a huge campaign over the years here to making everyone believe that private healthcare is a no brainer. However, from a tax/financial perspective, it isn’t necessarily the case. Obviously there are health issues to consider as well and everyone has different priorities but I am just attacking it from a purely financial perspective. Off to the boat and fishing show to dream of owning a yacht and to pick up a fishing rod so I can catch me some dinner. Ok i have read pretty much every thread, asked around and read lots of info on the private insurance companies websites and am still confused! can anyone confirm if you do not take out health insurance, after your first years grace, are you charged an extra % for the government medicare levy at the end of the tax year? Does this apply to everyone or only people who are over the $88k single income/$176k joint income threshold? The extra % relates the LHC and applies to the premium Some people have said to me this is the case, others say the increased 1/2% levy for every year you havent had private cover only applies to your private medical insurance premiums should you choose to take a policy out in future. And therefore your medicare levy is unaffected until you earn over the thresholds stated above or you take out private cover? I think correct after looking into it we are considering taking only extras cover, not hospital. Can anyone advise if this counts as health insurance for the medicare levy purposes, and therefore we will not be taxed more if we take this our before our one year grace period? I don't think it makes the cut; the whole idea behind the levy is to encourage people to take the hospital cover. You can find that here http://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/ hope that makes sense! Edited March 8, 2014 by wallywombat forgot to include a link Quote Link to comment Share on other sites More sharing options...
lozzachino Posted March 8, 2014 Author Report Share Posted March 8, 2014 Awesome, thank you wallywombat!! Quote Link to comment Share on other sites More sharing options...
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