Private Health Insurance Claiming Wrong Rebate

knobbs on 07/10/2019 - 20:20

Just looking through some new private health insurers currently for some offers. Not quite sure how the following scenario works out, does anyone know what would happen in the following example?

I take out new PHI with top tier rebate of 25.415%, through the year I swap to a fund that has a lower premium and claim the same 25.415% rebate. At the end of the year when doing tax I have to pay extra because I claimed the wrong rebate. Is that calculated on the portion of premium I paid on the 1st and 2nd? Or would it all just be sorted as if I had my current premium for the full year?

Sounds kind of stupid to do the second way, but just wanted some evidence that it is not the case.

The below example only has one policy over the year.
https://www.ato.gov.au/Individuals/Medicare-levy/Private-hea…

Health & Beauty

Comments

  • modsec802 on 07/10/2019 - 20:42
    +3

    They just add up all the premiums for the year across all funds, work out what rebate you’re entitled to claim and deduct any rebates already given to you by the funds. If it’s negative, meaning you’ve claimed a higher rebate than you’re entitled to you’ll have a tax debt.

  • [Deactivated] on 07/10/2019 - 21:37
    +1

    The providers will individually report to the ATO the dollar amount of the rebate you effectively 'pre-claimed' and what they charged you, and the amount you're entitled to will be based on your total dollar expenditure and your taxable income + voluntary concessional super contributions at the year end. So the first way, the only way that makes sense.

    • knobbs on 07/10/2019 - 22:06

      Yeap seems so, oh well.

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