Well it’s Friday. The last post of ‘Tax Tip’ week. I hope there has been something in it for everyone this week? Let’s finish with this one:

“Is Private Health insurance worth it?”

Firstly it’s worth noting that I’m not talking about the cost vs. risk of if you may need health insurance. What I want to focus on is the Tax and financial factors that you should consider.

In a Tax sense there is the ‘Medicare Levy Surcharge’ that imposes an extra 1% tax if you don’t have Private Health Insurance and you earn over $75,000 (or $150,000 as a couple). Really worth noting is that changes to the tax rules now add back to your taxable income things like Reportable FBT, Rental and other investment losses (negative gearing) to your income when applying the $75k threshold.

As a good guide, if you pay $90 per month in health Insurance ($1,080 per annum), the Tax income amount at which you start to be paying more tax in Medicare levy than dollars in insurance is $108,000.

My key points for people to consider:

– At $100k income your getting close to being out of pocket not having insurance;

– Insurance saves you money on your medical bills during the year through rebates;

– If you’re anything like the baby factory my friendship group are, then there is a far better reason to get health insurance.

If you’re young, single, carefree and earning below $60k you might be too busy partying to worry, for everyone else it’s a real consideration financially.

So there you go. Armed with some tax knowledge for the next BBQ session with family and friends.

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Paul Meissner – Director