Dynamic Business

The latest private health insurance rebate scheme delivered in the Federal Budget has been a blow for high income earners, as they face $1000 a year increase in health insurance payments, with the government tapering the 30 percent rebate for the wealthy.

The rebate will start to reduce for couples with incomes of $150,000 (singles $75,000) and tail off completely for those on $240,000 (singles $120,000).

The measure is seen as a way for the Government to push people towards private health insurance, as they will have to choose between paying the one percent Medicare levy surcharge or take out private health insurance. The Treasury estimates that the majority of wealthy Australians (99.7 percent) will take out private health insurance as they would face higher tax costs if they don’t.

Under the changes those couples on $150,000 (and singles $75,000) will have the rebate reduced from 30 percent to 20 percent, while those couples earning up to $240,000 and $120,000 for singles will have the rebate dropped to 10 percent.

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