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Private health insurance incentive tiers

The 30% private health insurance offset has been means tested since 1 July 2012. Private health insurance incentive tiers from 1 July 2012 are as follows:

Tier Income ($) Private health insurance offset Medicare levy surcharge
Singles Families Under 65 years of age 65-69 years of age 70 years of age or older Medicare Levy Surcharge
0-84,000 0-168,000 30% 35% 40% Nil
1 84,001-97,000 168,001-194,000 20% 25% 30% 1%
2 97,001-130,000 194,001-260,000 10% 15% 20% 1.25%
3 130,001+ 260,001+ 0% 0% 0% 1.5%

Notes:

  • The singles thresholds are indexed (annually) to average weekly ordinary time earnings, increasing in $1,000 increments (rounding down). The couples/family thresholds are double the singles thresholds.

  • For families with more than one dependent child, the relevant threshold is increased by $1,500 for each child after the first.

  • If a person covered by the policy enters a higher age bracket during the income year (eg someone aged 64 years turns 65 or someone aged 69 years turns 70), the year is divided into two periods and the appropriate percentage is used for each period.

 

If a premium provides cover for more than one income year, or for parts of more than one income year, it seems the whole premium qualifies for the offset in the year in which it is paid (ie apportionment is not required) because the "premium period" is not restricted to an income year (see also ATO ID 2004/713).

Dependent spouse tax offset

For 2012–2013 and later income years, the dependent spouse tax offset will only be available to those born on or before 1 July 1952. However, the provisions contain exceptions for dependent spouses who are unable to work due to invalidity or carer obligations, and for taxpayers who are eligible for the zone, overseas forces or overseas civilian tax offsets.

CGT discount and non-residents

The Government has announced that it will remove the 50% CGT discount for foreign residents on capital gains accrued after 7.30pm (AEST) on 8 May 2012. However, the CGT discount will remain available for capital gains that accrued prior to this time where foreign residents choose to obtain a market valuation of assets as at 8 May 2012. This means that, unless a market valuation is obtained of relevant assets as at 8 May 2012, the CGT discount will not be available at all for foreign residents. Note that public consultation on exposure draft legislation closed on 5 April 2013. (See Treasury’s exposure draft legislation available at www.treasury.gov.au/ConsultationsandReviews/Submissions/2013/Removal-of-CGT-discount-for-non-resident-individuals.)

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