1. Remunerator Financial Services Pty Ltd
Cecil Grimmer T/A You First Financial Solutions
PO Box 3457, Loganholme, QLD 4219
Phone: 1300 725 798 Fax: 07 3427 7936
Email: admin@youfirst.com.au
www.youfirst.com.au YOU FIRST LIFESTYLE
FINANCIAL PLANNING
FINANCIAL PLANNING FACT SHEET: NO 12
CHANGES to Private Health Insurance Rebate and Medicare Levy Surcharge
ACTION:
If your family adjusted taxable income in this financial year is more than $168,000 you may be able to
pre pay your premium health insurance in advance for 12 months to 18 months (note the time frame
varies by fund). This could allow you to maintain your rebate reduction prior to the tax changes.
From 1 July 2012, the Federal Government’s two key changes to private health insurance will take effect.
These changes are:
1. The Australian Government Rebate on private health insurance will be subject to an income test
(often referred to as “means testing").
2. An increase to the Medicare Levy Surcharge (MLS) for high income earners if you don’t have an
appropriate level of hospital cover.
You can find more details with the tables as attached.
You won’t need to do anything if your adjusted taxable income in this financial year is likely to be:
 $84,000 or under for singles
 $168,000 or under for couples/families. This increases by $1,500 per child after your first child.
If you are affected, you have a number of options:
1. Do nothing - any amount over your rebate entitlement will be taken into account after you lodge
your tax return.
2. Nominate a rebate % - you can nominate a rebate percentage Online, by calling Insurance Provider
or by visiting your nearest Insurance store. This will be applied to your premium from 1 July 2012.
3. Pay your premium upfront - Pay your premium in advance with the intention of claiming their
current rebate percentage.
- With Medibank private members, you can pay your premium upfront up to December 2013,
and you need to make your payment before 23/06/2012.
- With Bupa members, you can pay your annual premium for the financial tax year of 2012/13,
and you also need to make your payment before 23/06/2012.
Please note that if you nominate a rebate percentage which turns out to be more than your entitlement, this
will be assessed by the ATO when you lodge your tax return and you can expect to pay back any
difference.
Changes to Private Health Insurance Rebate and Medicare Levy Surcharge

2. What are the rebate changes for singles?
Income Up to $84,000 $84,001-$97,000 $97,001-$130,000 More than $130,000
Rebate Tiers No change Tier 1 Tier 2 Tier 3
Up to 65 years 30% 20% 10% 0%
65-69 years 35% 25% 15% 0%
70 years and over 40% 30% 20% 0%
Medicare Levy 0% 1% 1.25% 1.50%
Surcharge
What are the rebate changes for couples/families?
Income Up to $168,000 $168,001- $194,001- More than $260,000
$194,000 $260,000
Rebate Tiers No change Tier 1 Tier 2 Tier 3
Up to 65 years 30% 20% 10% 0%
65-69 years 35% 25% 15% 0%
70 years and over 40% 30% 20% 0%
Medicare Levy 0% 1% 1.25% 1.50%
Surcharge
This will mean that, for higher income earners, the percentage of rebate you will be entitled to will be
reduced on a tiered basis depending on your level of adjusted taxable income and the age of the oldest
person on the policy.
How to claim the Rebate?
There will be no change in the methods for claiming your private health insurance rebate. You can claim
your private health insurance rebate as a:
 Premium reduction to your policy price with your insurer
 Refundable tax offset through your tax return
 Direct rebate refund from Medicare.
Source: ATO,MBP,BUPA.
Remunerator Financial Services Pty Ltd Australian Financial Services Licensee 236658 A.B.N. 76 075 357 274 Life Insurance Broker
Cecil Grimmer Authorised Representative 231050