| The question has been raised many times, do I | | | | dependants (including your spouse) - if you had |
| need to be in a health fund in order to save on | | | | any - covered by private HOSPITAL cover?" |
| tax. These days, the answer is not always clear | | | | This means that unless you have family cover, or |
| cut. | | | | each member of the family has single cover, you |
| The way the system works, if you are single and | | | | will be liable for the 1% surcharge. |
| earn over $70,000 per year, and do not have | | | | In addition to this, when you join a health fund, |
| Hospital Cover through a Health Fund, then you | | | | you can agree to pay an excess on admission to |
| will be taxed an extra 1% of your taxable income. | | | | Hospital. This excess can be any amount agreed |
| The cost of being in a health fund, and you only | | | | to by the fund, however the Tax Office takes a |
| need Hospital cover to avoid the Medicare Levy | | | | dim view of any excess deemed too large. |
| Surcharge, can be less than $10.00 per week, or | | | | To quote the Tax Office website, "Private patient |
| around $500 per annum. This can be worth the | | | | hospital cover is cover provided by an insurance |
| effort to save over $700 in extra tax. | | | | policy issued by a registered health insurer for |
| If you are married, or one half of a couple, then | | | | some or all hospital treatment provided in an |
| the total partnership income must be less than | | | | Australian hospital or day hospital facility. However, |
| $140,000 to avoid the 1% Medicare levy | | | | an insurance policy for hospital cover taken out |
| surcharge. | | | | after 24 May 2000 that has an 'annual front-end |
| One anomaly with this is if you are in a fund and | | | | deductible' amount or excess of more than $500 |
| earn $150,000 per annum, then no Medicare Levy | | | | in the case of a policy covering only one person, |
| Surcharge applies. However, if you get married | | | | or more than $1,000 for all other policies, does |
| and your new spouse is not in a fund, and, if your | | | | not provide private patient hospital cover for |
| spouse lodges a tax return and indicates that | | | | Medicare Levy Surcharge purposes. |
| they are not in a health fund then, unless you | | | | So if you agree to pay an upfront fee on |
| have already changed the fund cover from single | | | | admission to Hospital, and that fee exceeds the |
| to Family, you could be hit with an extra $1,500 | | | | $500 (single) or $1,000 (family) threshold, then |
| tax bill because the tax return contains the | | | | you are deemed by the tax office to not be in a |
| following words: "For the whole period 1 July 20## | | | | health fund and will be liable to the 1% surcharge. |
| to 30 June 20## were you and all your | | | | |