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Money tip: Private Health Insurance Rebate now means tested – prepay for next year and make 30 per cent return on your savings

Next week is the start of a new financial year in Australia and if you earn more than $84,000pa as an individual or $164,000pa as a family you will no longer be able to claim the Private Health Insurance Rebate from July 1st.  (Note income includes things like super that is salary sacrificed, fringe benefits reportable amounts and imputation credits).  But here’s a tip that could buy you a bit more time on the rebate and help you save big dollars!

However, if you’re in this income bracket, there is a small window of opportunity to still receive the 30% rebate and defer your higher premiums for one year.   If you pay your premiums to your health fund before 30th June, for the next financial year, you will still receive the 30% rebate.

This is because the government pays the rebate based on when the premiums are paid, not on the period covered.   So if you have some savings in the bank, and are no longer going to qualify for the rebate, you might want to ring your health insurance fund THIS WEEK to prepay your cover for next year.  This will effectively give you a 30% rate of return – pretty hard to find these days!

The disclaimer: Please note this tip does not constitute financial advice and if you’re unsure whether you should act on this, I suggest you call your accountant or financial planner today to discuss it.  They’ll know your situation and be able to advise you on a path of action (which I obviously can’t do on my blog!)

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