Seeking Advice if I Need Private Health Insurance to Avoid The Surcharge

jarrod63 on 29/01/2018 - 12:26
Last edited 29/01/2018 - 13:45 by 1 other user

As a family my wife, 2 kids and I will be close to the 180k Medicare surcharge threshold. I say close because my wife is self employed and works part time so its hard to get an exact figure but at this stage it looks like our combined income will be about $185k.

Couple of questions I have:

1. Does that mean we would pay the 1% medicare surcharge on 5k (185k-180k) or is it on the whole 185k?
2. If I get private health say June 29, does that avoid me having to pay the surcharge or do I still have to pay for the other 364 days?
3. Can anyone recommend if I should just go ahead and get private health or if there is any other way to avoid the surcharge.
4. Recommend a health fund for 2018 that is affordable if I have to get private health just to avoid the surcharge.

Thanks

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  bigballerbrand on 29/01/2018 - 12:46

  +1

  1. you pay on the entire amount
  2. you only exempt for the days you had adequate cover (i.e 2 days in your example)

  Also, the 180k is adjusted taxable income, meaning there are other things that go into calculating the income, such as reportable fringe benefits, reportable super contributions etc

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  paperclips on 29/01/2018 - 12:51

  +1

  • 3 Find some tax deductions to bring you under the threshold, given your wife is self-employed you should be able to find 5k worth of deductions. Home office? Car expenses? Professional memberships?
  • 

    jarrod63 on 29/01/2018 - 12:59

    I thought the threshold was based on your gross income before deductions?

    • 

      paperclips on 29/01/2018 - 13:02

      +2

      As bigballerbrand has indicated the threshold is based on your adjusted taxable income. See https://www.ato.gov.au/individuals/medicare-levy/medicare-le…

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  jarrod63 on 29/01/2018 - 13:05

  Thanks all.

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  AustriaBargain on 29/01/2018 - 13:21

  +2

  Congrats on your income btw. That's quite a bit above the household income for the average or mean household in Australia. Statistically speaking most people here won't have ever faced the problem of avoiding taxes with a 180k household income, right?

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  BensonP on 29/01/2018 - 15:30

  The 1% is on the whole amount of your adjusted income, single of couple. I've gone over the $90000, for singles, and managed to deduct below the threshold.

  $5000 is a small amount of money to deduct. 5000kms of claimable travel is a deduction of $3300. ($.66 per kilometre.)