I heard someone saying that if you don't have health insurance (33 yo professional 65k salary), then you need to pay more in taxes. So, it's better to have the insurance as you can use the benefits too. Do you think it's true?
I have never had private health insurance and always paid in full for optics, dental, pharmacies. I have only been to GPs, compensated by medicare.
Read up on it from ATO website. It IS taken into account, but only against you in that it's your total taxable income PLUS your net losses (i.e., even if you're losing money, it actually adds to your total income for this purpose).
https://www.ato.gov.au/individuals/medicare-levy/medicare-le…
Example
Josh is 35 years old, single, has no dependants, and does not have the appropriate level of private patient hospital cover. In 2015–16, Josh's taxable income is $90,000.
When Josh completes his tax return, he also completes the income test section of the tax return and declares:
reportable fringe benefits of $20,000
net investment losses of $7,000.
Josh's total income for Medicare levy surcharge purposes is $117,000, which makes him a tier 2 income earner for calculating the Medicare levy surcharge. The amount of Medicare levy surcharge is only calculated against taxable income and reportable fringe benefits.
In 2015–16 Josh's Medicare levy surcharge liability is:
($90,000 taxable income + $20,000 reportable fringe benefits) x 1.25% = $1,375.
So in this case, if you make
$70,000
$21,000 net loss from negative gearing.
Your income for medicare levy surcharge purposes is $91,000, putting you in that bracket.
I'm not an accountant, but it says it on the ATO website. Also superannuation contributions are considered income for MLS purposes.
Income for MLS purposes
Your income for MLS purposes is your taxable income plus the following if they apply to you:
- reportable fringe benefits (shown on your payment summary)
reportable superannuation contributions (which is the sum of both your reportable employer superannuation contributions and your deductible personal superannuation contributions)- your net investment loss (which is the amount by which your financial investment deductions exceeded your financial investment income, plus the amount by which your rental property deductions exceeded your rental property income)
- the amount on which family trust distribution tax has been paid.
Another thing to consider is the hospitals near you. If you live in the inner city with flagship public hospitals (anything with "royal" in the name, and a few others) you don't need private cover for anything but tax reasons. I mean this - so many private people check into these world class public hospitals as public patients - because it is free with no gaps and they are going to get the same treatment anyway.
However, if the only decent hospital near you is private, then I'd consider getting private health insurance.
Skip on private health cover you'll be better off in the long run.
Just a word of advice, save whatever you were planning to pay in premiums in a high interest account. Don't touch it unless you end up needing it for some medical thing or if there's a good investment opportunity where the returns exceed the interest.
I had a major op recently and I've had health insurance for a decade. The op cost three times the total premiums I ever paid (top hospital and top extras). My health insurance covered most of it. It was also a surprise surgery. Health insurance is definitely worth it.
If you did not have private insurance and you had to be in waiting list for operation in public hospital, how much time you could wait?
I understand if it is real emergency then you can get treatment immediately in public hospital, but for other operations the waiting time can be anywhere from say 3 weeks to 1 year or so.
http://www.smh.com.au/federal-politics/political-news/high-i…
This is going to cause a major problem for health insurers!
Everyone that's been holding policies simply to avoid the MLS will be ditching in droves!
Personally I think they should raise the level a bit may be to 150k for singles and then triple the MLS. Where is all the money they are earning coming from? How come I can't earn that much whatever I do? Those extra money they earn is from poor/honest people, believe me.
They have a greater share of infrastructure, facilities, and other intangible societal values to themselves just because they are richer. More footprint on earth, more noise, more indirect control on people lives, and more advertisement opportunities, are linked to rich people.
P.s. I do think that celebrities should also pay attention tax (for reasons I may not be able to put into words).
I also think that $90K is extremely low for additional "surcharges" to kick in.
The AWOTE in Nov 2016 was $1533.10. The average salary is $80,000.
That $10,000 difference between $80K to $90K works out to be about $134/week after tax. $90,000 can hardly be considered a "high income".
How come I can't earn that much whatever I do? Those extra money they earn is from poor/honest people, believe me.
Am I reading this correctly? You think that anyone earning a higher salary is not honest and stealing from poor people??
Hi all, I've read through the comments and my partner earns $100,000 a year BEFORE TAX would it be better off if he gets health insurance?
Also if he does get health insurance before eofy will he still have the pay the Medicare levy fee?
I wasn't aware of this either. Not convinced negative gearing is not taken into account.