• What’s new for tax time in 2014

    There have been some changes this year for tax time that you may need to know about. These include changes to the private health insurance rebate and the net medical expenses tax offset, as well as the introduction of the tax receipt.

    The following information is about the changes and how they may affect you.

    Private health insurance rebate changes



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    The private health insurance (PHI) rebate is a contribution the government makes towards the cost of your private health insurance.

    You can claim your private health insurance rebate in one of two ways:

    • as a premium reduction, which lowers the policy price charged by your insurer
    • as a refundable tax offset through your tax return.

    What are the changes?

    Two changes have been made to the way the PHI rebate is calculated and applied to premiums.

    1. Rebate applied to premiums

    From 1 April 2014, the rebate applied to private health insurance premiums will be adjusted annually to take into account the average increase of premiums and the consumer price index.

    This means the rebate you received before 1 April will be different to the rebate you receive after this date. If you paid premiums both before and after 1 April, you will have two lines of information on your PHI statement to enter into your tax return.

    2. Rebate on lifetime health cover loading

    Lifetime health cover (LHC) loading is a penalty that generally applies if you have not taken out and maintained private health insurance from the year you turned 31 years of age.

    From 1 July 2013, you are no longer eligible for the private health insurance rebate on LHC loading. The rebate is now only paid on the cost of the policy before the LHC loading cost is added. This means that if you have LHC loading, the amount of rebate you are eligible for may be less than what you received in previous years.

    The changes to your rebate will be automatically applied to your policy so you don’t need to do anything.

    What you need to do

    It’s important you wait for your Private Health Insurance (PHI) statement from your insurer before doing your tax return.

    The additional information you need will be displayed on your statement as separate lines. You will need to enter all information separately in the appropriate sections in your tax return.

    Net medical expenses tax offset phase out

    Net medical expenses are your total eligible medical expenses less refunds from Medicare and private health insurers which you, or someone else, received or are entitled to receive.

    If you are eligible for the offset, the percentage of net medical expenses you can claim is determined by your adjusted taxable income and family status.

    What are the changes?

    The net medical expenses tax offset is being phased out.

    To be eligible for the offset this year, you need to have received the offset in your 2012-13 income tax assessment. Similarly, to claim the offset in 2014-15, you will need to have received the offset in 2013-14.

    The final year the offset will be available is 2014-15.

    This change does not apply if you have medical expenses relating to disability aids, attendant care or aged care. You will be able to claim these related medical expenses until 30 June 2019.

    Introduction of the tax receipt

    This year you may receive a tax receipt. The tax receipt outlines how the tax you pay is allocated towards government services such as Centrelink payments, health and education. The tax receipt will be written in English.

    What are the changes?

    You will receive a tax receipt with your notice of assessment, which you are sent after you lodged your tax return, if both of these apply to you:

    • your assessed income tax for the year 2013-14 is $100 or more
    • you lodge your income tax return within 18 months from the end of the 2013-14 financial year.

    What you need to do

    The tax receipt is for your information only - you do not need to do anything when you receive it.

    Find out more

    • Private Health Insurance Information in English about private health insurance thresholds, eligibility and tips for correct lodgment
    • If you have any questions about your private health insurance policy, contact your private health insurer.
    • Medical Expenses Information in English about the changes to the net medical expenses tax offset
    • Tax receipt Information in English about the tax receipt
    • Other languages Information about tax and super in languages other than English
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    If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service for help on 13 14 50

      Last modified: 06 Mar 2015QC 41415