23 May 2012 – The private health insurance rebate is to be means tested from July 1, 2012 but a method of maintaining the full 30% rebate has emerged.
Some private health insurance companies are accepting pre-payment of premiums before June 30, 2012, which will allow health fund members to lock in the current rebate before the new income-tested scaled reductions to the rebate comes into effect.
The office of the Minister for Health, Tanya Plibersek, has confirmed that private health insurance premiums that are paid before June 30, 2012 will qualify the payer for the level of rebate under existing rules, but that payments made after July 1, 2012 will be
subject to the new health insurance rebate rules.
The legislation allows for health insurance providers to determine themselves if they will allow for pre-payment of premiums. Many health insurers have done just that, and allow for pre-payment of up to 12 months, some allowing 18 months and one company
even providing for up to 30 months' pre-payment.
The Private Health Insurance Ombudsman's office (PHIO) confirms that the relevant legislation (the Fairer Private Health Insurance Incentives Act 2012) is worded in such a way to allow for the date when actual payments are made for health cover premiums to
determine under which financial year eligibility for relevant government rebates or offsets is set.
The new means testing will mean that singles earning more than $130,000 and households on more than $260,000 will miss out entirely on the rebate from July 1, 2012. The reduction in rebate levels starts after individual incomes reach $84,000 and family
income passes $168,000 (see table below).
REBATE
Unchanged Tier 1 Tier 2 Tier 3
Singles <$84,000 $84,001-97,000 $97,001-130,000 >$130,001
Families <$168,000 $168,001-194,000 $194,001-260,000 >$260,001
< Age 85 30% 20% 10% 0%
< Age 65-69 35% 25% 15% 0%
< Age 70+ 40% 30% 20% 0%
There are three ways to claim the rebate. Either by asking your fund to give you the rebate in the form of a reduced premium, through a Department of Human Services service centre as a cash payment or cheque (and there's another form for that), or claim it back through your annual income tax return