Pre paying private health insurance

I heard somewhere that we can per-pay the health insurance premium to get the 30% rebate.
Any problems with doing this?
 
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I heard somewhere that we can per-pay the health insurance premium to get the 30% rebate.
Any problems with do this?

Quite simple to prepay up to December 2013 with Medibank Private - I gave them a call and they are sending me an account for the entire amount. Well, they said they are :rolleyes:.

cheers
 
Lot of financial writers in the papers are recommending prepaying up to 12 months (jdepends on the health fund) if you won't be eligible for the rebate next year.
Marg
 
Below is the email sent out by HCF, with helpful information and links in it...

Members affected are singles with income over $84,000, and families
with income over $168,000.

Retain your current rebate for longer - advance pay your premium by
27 June 2012:
Members may elect to pay their health insurance premiums in advance.
High income earners whose Federal Government 30% rebate may be affected
by the new rules, may elect to pay their health insurance premiums
before the income testing of the Private Health Insurance Rebate comes
into effect on 1 July 2012.

It is important to note the following conditions:

* Advance premium payments must be made no later than 27 June 2012.
This will help ensure adequate time for processing before 30 June 2012
(Advance premium payments must be made in time for bank clearance in this
financial year. Please note: 30 June is a Saturday)

* To retain your current rebate for the full 2012/13 financial year the
advance premium must cover the full 2012/13 financial year. We recommend
you pay up to 31 July 2013.

Your subsequent (actual) premium payment should be made after 1 July 2013
as any premium payments made in 2012/13 would fall within the scope of
income testing for 2012/13. Payment of this subsequent premium and the
following premiums will be subject to the Rebate Income Testing rules.

Please note: the above information is based on HCF's understanding of the
legislation and the related ATO administrative procedures at the time of
writing this email. Members are strongly advised to seek independent
financial and taxation advice before proceeding with this payment option.

(Normal) Medicare Levy Surcharge:
To remain exempt from the Medicare Levy Surcharge for 2012/13, you must
have an appropriate hospital cover for you and all your dependants (as
defined in the tax legislation) for the full 365 days.

The HCF Rebate Tier and Medicare Levy Surcharge calculator:
HCF has developed a calculator to assist you in better understanding the
above impact of the income testing of the Private Health Insurance Rebate
and the increase in the Medicare Levy Surcharge (MLS). You can find the
calculator at
www.hcf.com.au/rebatecalc

The ATO calculator - income for Medicare Levy Surcharge purposes
It is important to understand how income is determined. The Australian Taxation
Office website provides a calculator for taxpayers to use for this purpose. To
access the calculator see www.ato.gov.au/individuals and follow the link to
'Changes to Private Health Insurance'. Then click on 'What income is being
income tested?' under 'Table of Contents'. Then follow the link to 'Income
for (Medicare levy) surcharge purposes calculator'. You may also call the
ATO on their personal tax enquiry number 13 28 61 on weekdays between 8am
and 6pm.

There is no penalty for unintentionally miscalculating your 'income' and
claiming the incorrect private health insurance rebate.

Please remember that if you're affected and wish to retain your Federal Government 30%
rebate:

* Now is the time to pre-pay your health insurance premium
* Make your pre-payment by 27 June 2012
* Payment to 31 July 2013 is recommended, taking you into the 2013/14 financial year.
 
The legislation notes that the means testing does not apply to premiums paid before 1 July 2012.

I spoke to the ATO - the guy I spoke to read some internal publication which noted you will get the rebate for the prepayment.
 
Learn the new rules and play by the rules

Quite simple to prepay up to December 2013 with Medibank Private - I gave them a call and they are sending me an account for the entire amount. Well, they said they are :rolleyes:.

cheers

I'm waiting for ours also to pay up till 31 Dec 2013. We will not qualify post July 2012. Also pre-paying the next tranche of little Miss Player's orthodontics. New specs for most of the family also being finalised before end of June. The lifting of the gap (out of pocket) medical expenses will raise to five kay for us next year, so optimising the rebate makes more sense now.

Just playing by the rules and claiming all that we are entitled to. ;)
 
Thank you all. Just called HCF and paid till 31 Jul 2013. They won't accept any further.

Penny - Did you type all that info?

TV - I always have this gross income or taxable income question and still don't know. None of the articles never say that clearly.
 
I am including my wife in an updated HCF plan which would take me from the 10% to 20% rebate. Have a meeting setup with HCF to discuss this - paying by CC in advance now is the plan for the time being.
 
Hcf

yep - I just pre-paid my family insurance until 31st July 2013 with HCF.

This cost me $3270 today.

If I'd done nothing my premiums for the remainder of this fin year plus next fin year (without the rebate) would have been $4160.

Saving about $890...(with simple maths...)

For those of you who then ask...well what about the cost of utilising funds today vs paying the money off the house and continuing with the fortnightly health insurance payment schedule????

Using an interest rate of 6.50% (rough home loan rate) the $4160 NPV's to about $4015 in todays dollars... still an $745.00 saving....


Go for it...........
 
yep - I just pre-paid my family insurance until 31st July 2013 with HCF.

This cost me $3270 today.

If I'd done nothing my premiums for the remainder of this fin year plus next fin year (without the rebate) would have been $4160.

Saving about $890...(with simple maths...)

For those of you who then ask...well what about the cost of utilising funds today vs paying the money off the house and continuing with the fortnightly health insurance payment schedule????

Using an interest rate of 6.50% (rough home loan rate) the $4160 NPV's to about $4015 in todays dollars... still an $745.00 saving....


Go for it...........



Yeah , it's a no brainer 6.5% reducible versus a saving of 30% flat rate. I'm curious as to why the funds won't offer a further discount for paying 12 months up front, but I guess there's no incentive for them to do that at this time.
 
I take it that it will be taxable income plus reportable benefits as per the payment summary.

I'm not sure exactly, but most of the government rebates / benefits are calulated using adjusted taxable income, which is:

Taxable Income (ie Gross Income less Deductions)
ADD: Reportable Fringe Benefits
ADD: Reportable Superannuation COntributions
ADD: Investment Losses.
 
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