Tax savings with Private health insurance ?
February 20th, 2008 | by winsonlee |Are you earning more then $50,000 in a year ? Then you should consider getting a private health insurance. Why so ? Every Australian pays the medicare levy which is 1.5% of their total income. This contributes to the delivery of Australia’s Health Care system. For those who earn more then $50,000 ore more, the government charges them another 1% on top of the 1.5%. If you are earning $50,000, that means you will be paying $500 extra on top of $750.
A recent report released by the Australian Tax Office has shown that people without private health insurance are paying on average an extra $614 a year in tax through the Medicare Levy Surcharge. Over the last 9 years it is estimated that taxpayers have paid up to $1 Billion dollars in extra tax for not having eligible Private Health Insurance.
The best choice offered by Medibank will be MyOptions which only cost $708.50.
The above shows the services that are covered by MyOptions.
By taking Private Health Insurance you can save tax. If you are earning more then $50,000 without Private Health Insurance, you will be paying an extra 1% Medicare Levy which is $500 to $1000 a year depending on your yearly income. Instead of paying the 1% extra which you do not get any benefit out of it, the money could be used to purchase cover. On top of the tax savings, the Federal Government rebates 30% of your insurance costs. If you are going for MyOptions by Medibank which cost $708.50, after the 30% rebate you will only be paying $495.95. If you are earning $50,000, instead of paying 1% for medicare levy surcharge which is $500, now you only pay $495.95 for a private health insurance. This means that you are saving a total of $4.05. The saving will be more if you are earning more.
