Can purchasing a health insurance policy help me save on tax?
I'm a 9-5 employee, and I'm very confused about whether I need to have health insurance to save tax. Any help on this question will be highly appreciated.
Hello Ananda, If you do NOT have private health insurance and you are over a certain level of income you will be levied Medicare Levy Surcharge. Medicare Levy Surcharge is currently 1%, 1.25% or 1.5% depending on your income for Medicare Levy Surcharge purposes. Medicare Levy is charged to all Australian tax payers with income over a certain amount. You are best to consult with your accountant or the ATO to see what your liability is for both Medicare Levy charges.
Hi Anand, Basically if you believe that you need private health insurance then if you delay then you will be charged loading by private health insurance funds. Its based on your age. If you do not have hospital cover with an Australian registered health fund on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30. PLUS If your income is < than $84000 (single) and < than $168000 (couple) you do not pay medicare levy surcharge.
Hi Anand, Just to clarify Apruv's response. It is not the Health Funds that impose the levy or the loading. It is the Federal Government. With Healt cost inflation rising between 7 - 10% pa I think that health Insurance is a necessity not a luxury
Ananda Raj Pandey, Technical Team Lead at SAI Global
Thanks, everyone for helping me our for my health insurance issue. Its really cleared my mind and all my doubts are cleared now. Thank you Apurv for calling my name right :) , and thanks for your helpful answer.