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16 Aug 13 Private health insurance policy details

MEMBER 177 writes:


"What a mess this is.


Say, for example, you have a couple where the one partner stays at home and earns no income and the other earns all the family income which is over the threshold to obtain the full 30% rebate. One partner does not need to do a return where the other partner will have to repay 1/2 of the 30% Rebate received. So the ATO will never recover this other 1/2 through the tax system.


I also had a situation whereby the employee salary sacrificed his Health Insurance payments. The employee received a statement stating he is covered by Health Insurance for 365 days but the amount paid by him/her was Nil and the amount of the Rebate claimed was nil. Can’t put in nil at items J and K, have to put in something otherwise employee will be charged an extra 1% Medicare Levy. The only way that I managed to overcome this was to pretend that he had actually paid it and received the 30% Government Rebate, which I calculated from his group certificate under the amount salary sacrificed rounded back down and then calculated the 30% Rebate that his employer would have received.


Also in such situations if the employee was not entitled to the full 30% rebate as his family income was too high, how is the ATO going to recover the 30% rebate received by the employer? Also what about taxpayers who are not entitled to Medicare as they are not citizens and according to their visa requirements must have their own Private Health Insurance?  They get no 30% Rebate for such Health Insurance paid but also are not entitled to this 30% rebate if I put down no 30% Rebate claimed then he/she will get the 30% rebate as a refund in their tax return, something to which they are not entitled.  In such situations if I put down no Health Insurance details then they could be charged the extra 1% Medicare levy even though they are not entitled to a Medicare card or be paid Medicare benefit but still have private health insurance.


What a badly drafted policy."