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June 30 is almost here, and you may be thinking “where are all those receipts I was saving up for tax time?” They’re probably scrunched up and stuffed into a shoebox somewhere, am I right? That’s something I’m sure many single working mums can relate to.
You’d be forgiven for not giving tax time too much thought this year. Work, study, driving the kids around, finding time to exercise – that do-to list can seem never ending! Oh, and of course there’s the cost-of-living battle so many Aussies are facing right now.
We know the struggle is real, but as well as your yearly tax return, it’s a good idea to take stock of all your household bills and expenses around this time of the year - in particular, private health insurance.
Whether you have a policy or not, the EOFY is a great time to think about health insurance. Why? Read on as we explain the Medicare Levy Surcharge (MLS), Lifetime Health Cover (LHC) loading and the changes coming on 1 July.
Are you going to be up for the MLS?
We know many Aussies can be confused about private health insurance, so let us break down a few things for you, starting with the MLS.
Since 2014, if you were single with a taxable income of more than $90,000 a year and didn’t have appropriate private hospital cover, then it’s highly likely that you’d have to pay an extra tax in the new financial year via the MLS. However, from 1 July 2023, MLS income thresholds will increase from over $90,000 to over $93,000 (for singles).[1] So, if you’ll be earning above the MLS income threshold in the 2023-24 financial year, and don’t have private hospital cover, this month could be the perfect time to consider taking it out to avoid getting stung by that extra tax in the next financial year.
Before we move on, it’s important to note that income thresholds for the Private Health Insurance Rebate (an amount the government contributes towards the cost of your premiums) are also changing from 1 July 2023.[2] This change means that for some singles or families who previously couldn’t claim a rebate may now be eligible!
What about LHC?
30 years-old or younger? You’ll want to take note of this one. If you don’t have an appropriate level of hospital cover by July 1 after you turn 31, and decide to take it out later, you’ll be subject to LHC loading. This is a government penalty that means you’ll pay an extra 2 per cent on top of your premium for every year you don’t hold an appropriate policy.[3] So, if you want to avoid that extra cost, now could be a great time to consider taking out an appropriate level of hospital cover.
There you have it. Not only can your yearly tax return potentially provide a bit of a healthy boost to your bank account. But having a good hard think about private health insurance and your circumstances could also put a few extra dollars back in your pocket, helping you say goodbye to FY23, and hello to FY24 with some extra peace-of-mind. Remember, you’re not alone either. Comparison service iSelect* has trained consultants who can try to help you understand how private health insurance relates to MLS and LHC, plus take the time to understand what is important to you and what you are looking for in a policy.
iSelect Health disclaimer
*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect's range of providers
[1] Source: Medicare levy surcharge income, thresholds and rates | Australian Taxation Office (ato.gov.au)
[2] Source: Income thresholds and rates for the private health insurance rebate | Australian Taxation Office (ato.gov.au)
[3] Source: Lifetime health cover | Australian Taxation Office (ato.gov.au)
