Tax Time FAQs

• How can I avoid paying the additional 1% Medicare Levy Surcharge?
• I am part of the Young Adult Support Plan, how does the Medicare Levy Surcharge affect me?

• Am I eligible for a tax offset on net medical expenses in addtion to the Rebate?

Claiming the Rebate on private health insurance as a tax offset.

Who can claim the Rebate as a tax offset?

You are entitled to claim the Rebate if you pay the premiums. You are also eligible for the Rebate if your employer is paying the full non-rebated premium on your behalf. This amount will show at 'G' on your statement.

What if two or more people pay the premium?

If two or more people pay the premium (i.e. payments are made from a joint bank account) then each individual will make a separate claim for their portion of the Rebate. Defence Health can not identify which person has paid which portion.

What if my employer pays for my health insurance premiums?

If your employer pays the full non-rebated premium, you, not your employer, will be entitled to claim the Rebate. Your Private Health Insurance Statement will indicate the tax offset you may be entitled to at 'G'.

My partner and I have separated and I have been paying the premium. How do I claim the Rebate?

The name on the statement is not important. The important thing to remember is that you are entitled to the Rebate if you pay the premium.

Can I claim the Rebate as a tax offset when I salary sacrifice my health insurance premiums?

You are still paying the premiums whether you are doing it before or after your tax is deducted. Your Private Health Insurance Statement will indicate at 'G' the tax offset you may be entitled to.

What if I don't have a tax liability?

The Rebate on private health insurance is a 'refundable tax offset'. This means that you will receive your full entitlement even if you do not have a tax liability, either through your tax return or from a Medicare office with an appropriate Defence Health receipt (available upon request).

Why aren't all family members shown on the statement?

It doesn’t matter who the statement is addressed to, if you have paid the premium then you can use the statement to complete your tax return.

I am part of the Young Adult Support Plan (YASP) what do I need to do?

All YASP members are covered under two private health insurance policies, being your own Top Extras membership and their parents’ membership for hospital cover. On your tax return you must provide the fund ID, membership number and type of cover for both your Top Extras cover and your parent's hospital cover.

The premiums deducted from my pay aren't the same as my Private Health Insurance Statement?

We can only take into account those premiums received by Defence Health between 1 July 2007 and 30 June 2008. It may be that we haven’t received your final deduction, or we may have received last year’s final deduction in July 2007. You can use your pay records to calculate your Rebate and the Private Health Insurance Statement for other details.

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Why doesn't my Private Health Insurance Statement show an amount equal to my 12 monthly premiums?

The figures on your Private Health Insurance Statement will be those premiums processed by Defence Health between 1 July 2007 and 30 June 2008. Rebates on premiums paid for more than one financial year can be fully claimed in the year in which the payment is made. For example if a Defence Health member pays premiums for 2 years cover in February 2008, they can claim the Rebate on the full payment in the 2007/08 financial year. This amount will show at 'G' on your statement.

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What does the highest level of Rebate mean?

The highest level of Rebate is the maximum level of rebate (30%, 35% or 40%) that you were entitled to during the 2007/08 financial year.

Can I claim the Rebate as a reduced premium in future?

Yes – all you need to do is fill in the Application to receive the Federal Government 30% Rebate as a reduced premium.

The Medicare Levy Surcharge.

How can I avoid paying the additional 1% Medicare Levy Surcharge?

The Medicare Levy Surcharge of payable by 'high income earners' during any period without hospital cover, including suspension of cover. You are a 'high income earner' if your taxable income is greater than $50,000 for singles or $100,000 for families (increaseing by $1,500 for each dependant child after the first). It is proprosed that these thresholds will increase to $100,000 for singles and $150,000 for families from 1 July 2008. The family threshold will still increase by $1,500 for each dependant child after the first under the proposed changes.

If an appropriate hospital product did not cover you and your dependants for 366 days between 1 July 2007 and 20 June 2008, you will pay the additional 1% on any uncovered days. Permanent ADF personnel should be aware that they are not exempt from the Medicare Levy Surcharge unless an appropriate hospital product covers all of their civilian dependants.

You will be pleased to know that all Defence Health products with a hospital component will remove your liability for the Medicare Levy Surcharge.

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I am part of the Young Adult Support Plan, how does the Medicare Levy Surcharge affect me?

If you fall into the high income category, earning a taxable income of $50,000 per annum or more, you need to ensure that you provide details of your own Top Extras cover and your parents' hospital cover when completing the compulsory Medicare Levy Surcharge question on your tax return. This will ensure the Tax Department know you have appropriate hospital cover and will remove your liability for the Medicare Levy Surcharge.

Net Medical Expenses tax offset.

Am I eligible for a tax offset on net medical expenses in addtion to the Rebate?

In addition to the Rebate, you may be eligible for a 20% tax offset on net medical expenses over $1500. Net medical expenses are the medical expenses you have paid less any refunds you have received, or could receive, from Medicare or a private health fund. You should consult your Tax Pack or tax adviser for details of what expenses qualify for the offset. If you believe you had net medical expenses over $1,500 in 2007/08 you can request a financial year claims history from Defence Health. You may also have to contact Medicare to obtain details of Medicare only claims.