I currently do not have health insurance, but due to a change in career my income for this financial year will exceed the Medicare Levy Surcharge minimum threshold of $84,000.
If I take up health insurance now (with 3 months remaining in the financial year) with the mindset of not wishing to pay any surcharge - will this be of any benefit? Or am I only exempt for the surcharge if I hold health insurance for a full year.
Reference: http://www.ato.gov.au/Individuals/Medicare-levy/Medicare-lev…
It might be worth giving the ATO a call.
I can confirm I joined a private health fund one year (near the end of the financial year) and only received the concession for the period of the financial year that I was privately insured. i.e. I paid the surcharge for about 9 of the months…sounds just like your situation.
When completing your tax return you have to input how many days you held health insurance for, and will be liable for the days which you didn't hold cover.
The bulk of my income which will push me over the threshold will be in the last 3 months of the financial year (the same period the health insurance will be held) I guess this won't make a difference - because income only looked at across the financial year as a whole. :(
Damn tax!
yea i also understand you pay MLS for proportional time of the year without private health insurance.
i assume you have not reached 31 years yet, as after that extra lifetime health cover loading percentage will be added to your base hospital premium.
but overall, most importantly i think the pay rise is better than the extra tax =)
How much are you going to be over the limit?
You do know that Reportable Fringe Benefits and Reportable Employer Super contributions, net financial & rental losses are added to your income to provide a test income for liability to pay MLS?
If you are only over a little then you may wish to see what deductions you can make that will drop you below.
If you tell me your occupation I can try and suggest some deductions that you may not be aware of that you could claim and that may drop you under.
I have quite a bit of experience with these things….:)
From memory you are only exempt if you comply to all the conditions ie hospital cover etc. for the period you have insurance. So you would pay the surcharge on 9 months out of 12.