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  • Understanding your notice of assessment

    When you lodge a tax return, we will send you a notice of assessment, which is an itemised account of the amount of tax payable on your taxable income.

    As your income increases, your entitlement to the private health insurance rebate may be reduced or you may not be entitled to any rebate.

    Depending on how much private health insurance rebate you’ve claimed, your notice of assessment may show a tax liability and/or tax offset.

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    Excess private health reduction or refund (rebate reduced)

    When you lodge your tax return, we will calculate your entitlement to receive a private health insurance rebate.

    If you have received more rebate than you are entitled to via reduced private health insurance premiums from your insurer, we will claim back the excess rebate when you lodge your tax return. The amount will be shown at the Excess private health reduction or refund (rebate reduced) label on your notice of assessment.

    Your insurer may have given you too much rebate because your entitlement to the private health insurance rebate is income tested. As your income increases, your entitlement to a rebate may be reduced, or you may not be entitled to any rebate.

    Note: We do not tell your insurer your income. If you want to avoid the liability in future, you can contact your insurer and nominate a new rebate tier.

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    Avoiding a liability in the future

    Your private health insurer may be giving you an upfront private health insurance rebate by reducing the premiums you pay. However, if your income for surcharge purposes is above the thresholds, you may receive too much rebate (premium reduction), and you may incur a private health insurance liability when you lodge your tax return.

    To avoid this liability, you can choose to contact your insurer to nominate a new rebate amount – this means you will receive less rebate upfront as a premium reduction.

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    Nominating a new rebate tier

    You can avoid receiving a private health insurance debt when you lodge your tax return by changing the amount of private health insurance rebate you receive from your insurer as a premium reduction at the beginning of the income year.

    You can do this by estimating your income for rebate purposes for the financial year and contacting your private health insurer to nominate a new rebate amount.

    If you overestimate your income, and do not claim your full rebate entitlement as a premium reduction, we will pay back any entitlement you are owed as a tax offset at tax time.

    There are no penalties for making an incorrect rebate nomination with your insurer.

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    Last modified: 31 Aug 2016QC 49968