April 2012 Newsletter

In this edition:

Welcome

Super Contributions: What are the rules?

Business Succession Planning

Changes to private health insurance rebated introduced

Feature: Death and taxes in Superannuation

In the 2009-10 Budget, the government announced a proposal to income test the private health insurance rebate. These proposed changes have now been passed by Parliament, and are due to come into effect in time for the 2013 income year.

Currently, taxpayers receive a 30 per cent rebate on the cost of eligible private health insurance, regardless of their income levels. And singles with taxable incomes over $80,000 and families with taxable incomes over $160,000, who do not hold private health insurance, are subject to a 1 per cent Medicare Levy Surcharge.

However, from 1 July 2012 the private health insurance rebate and the Medicare levy surcharge will be income tested against three income tier thresholds.

The income tier thresholds are below, but essentially:

• Singles earning more than $80,000 per year and families earning more than $160,000 per year will have their private health insurance rebate reduced, and will be subject to some level of Medicare Levy Surcharge if they don't hold eligible private health insurance; and



• Singles earning more than $124,000 per year and families earning more than $248,000 per year will have their private health insurance rebate cut completely, and will be subject to the maximum 1.5 per cent Medicare Levy Surcharge if they don't hold eligible private health insurance.
  

With these changes due to come into effect soon, any client who does not hold private health insurance should contact their advisor to discuss how the changes might impact them.