Means Testing of Private Health Rebate to Proceed
Means testing of the private health insurance rebate looks certain to begin in July after legislation passed the House of Representatives by the slimmest of margins.
The changes mean that Individuals earning more than $83,000, or families earning more than $166,000, would start to lose the rebate in the 2012-13 financial year. In the 2012-13 financial year, the rebate would only cut out completely for singles once they were earning more than $129,000 a year and for families earning $258,000 or more.
To achieve the means testing, the legislation proposes the introduction of 3 new "Private health incentive tiers" with effect from 1 July 2012. If the legislation is passed by the Senate, then from that date, individuals and families may not be eligible for the full 30% rebate for their private health insurance premiums. In conjunction with this, also from 1 July 2012, the rate of Medicare levy surcharge for individuals and families without private patient hospital cover may increase depending on their level of income.
The Opposition Leader Mr Abbott has indicated that, in government, the Coalition would restore the rebate.
