Government initiatives

Australia’s health is important to the Government, and they want all Australians to enjoy the benefits that come with living a healthy lifestyle.

The Federal Government has certain incentives in place to encourage individuals to enter the private health system and take responsibility for their health care, by taking out and maintaining private health insurance.

The main initiatives include:

Lifetime Health Cover

Lifetime Health Cover (LHC) is a Federal Government initiative designed to reward people for taking out private health insurance at a younger age and keeping it, by securing lower premium payments. Under LHC, if you’re aged over 30 and don’t have hospital cover, for each year you delay joining, you’ll pay an additional loading on your membership fees. This means, for every year you are aged over 30 and don’t have hospital cover, you’ll pay an additional 2% loading on the base rate, up to a maximum of 70%. Laura Geitz explains the Lifetime Health Cover loading in the video below.

 

Here’s an example – for a single 35 year old, their premium will attract an additional 10% loading on the base rate for private hospital cover. For couples and families, the loading is calculated based on an average of the ages of the covered adults. So for a couple aged 36 and 42, the combined loading would be 36%, but this is halved to 18%, which is the final loading applied to the joint policy.

The loading is frozen at the rate that matches your joining age, so it pays to take out private health insurance sooner, rather than later. So even if you’re already over 31, it still makes sense to join as soon as possible to secure a lower loading.

As long as you maintain your hospital cover, your loading percentage will continue to be set according to your Certified Age at Entry, or CAE (the year you took out your hospital cover). Once you’ve stayed with private hospital cover for ten continuous years and keep it, you’ll stop paying that loading as a reward for your commitment to the private health system.

Under the Federal Government’s Lifetime Health cover legislation the loading of 2% does not apply to Extras cover.

Note: Due to Federal Government’s rounding rules for the rebate, actual premiums for hospital and/or extras coverage can vary from this calculation by up to 10 cents.

Our main cover calculator does not include your Lifetime Health Cover loading, but you can get an accurate quote through our Online Member Services, using the Rates Calculator (no registration required).

The following table shows how you might be affected by Lifetime Health Cover.

Joining AgePremium LoadingJoining AgePremium Loading
30 or younger0%4836%
312%4938%
324%5040%
336%5142%
348%5244%
3510%5346%
3612%5448%
3714%5550%
3816%5652%
3918%5754%
4020%5856%
4122%5958%
4224%6060%
4326%6162%
4428%6264%
4530%6366%
4632%6468%
4734%6570%

Provisions and exemptions to Lifetime Health Cover

The LHC loading doesn’t apply to everyone. There are situations that might delay the application of the LHC, or avoid it altogether:

  • If you’ve had hospital cover since 1 July 2000
  • If you were born on or before 1 July 1934, you are exempt from Lifetime Health Cover
  • Members of the Australian Defence force
  • Recent migrants who have become eligible for Medicare benefits (including migrants from New Zealand).

Australian citizens and permanent residents living overseas

If you are an Australian citizen or permanent resident who turns 31 after 1 January 2000, and are overseas on the 1st of July following your 31st birthday, you will not pay a Lifetime Health Cover loading as long as you purchase hospital cover within a year of your return to Australia.

Dropping your hospital cover

You are able to drop your hospital cover for a cumulative period of up to 2 years 364 days during your lifetime without affecting your loading. For every year without cover after that, your loading with increase by 2%, in line with the LHC scheme.

Transferring between health funds

If you’re transferring hospital cover from another registered fund, make sure you use your CAE (the age at which you joined), rather than the age you are now, to calculate the correct fee.

For more information on Lifetime Health Cover, please visit the Department of Health and Ageing website at www.health.gov.au.

 

 

Medicare Levy Surcharge

The Medicare Levy Surcharge was introduced by the Federal Government to encourage individuals to take out private health insurance, and to reduce the load on the public hospital system. You generally must pay the surcharge if you are a higher income earner and do not have a private hospital insurance policy with an appropriate excess.

People who don't have eligible private health insurance and who earn over $90,000 per year for singles and over a combined income of $180,000 per year for families (the threshold increases by $1,500 for each additional child after the first), pay an additional levy. This surcharge is in addition to the standard 2.00% Medicare Levy paid by most Australian taxpayers.

All Queensland Country Health Fund hospital covers exempt you from the additional surcharge, meaning you’ll pay less tax.

The legislation introduced by the Australian Government on 1 July 2012 may have an impact on the level of surcharge based on an individual's or family's income. The below table outlines the thresholds and applicable Medicare Levy Surcharges.

Singles
Families
Less than $90,000
Less than $180,000
$90,001 - $105,000
$180,001 - $210,000
$105,001 - $140,000
$210,001 - $280,000
$140,001 or more
$280,001 or more
All ages0.00%1.00%1.25%1.50%

More information about the Medicare Levy Surcharge can be found by visiting the Australian Taxation Office’s website at www.ato.gov.au, or by calling the ATO Helpline on 13 28 62.

You can also find out more about the Australian Government Rebate on private health insurance.

 

Australian Government Rebate

The Australian Government Rebate on private health insurance was introduced as a financial incentive to help Australians afford private health cover. The scheme introduced means testing on the rebate in 2012.

The rebate depends on your age, is income-tested and applies to all Queensland Country’s products. The rebate isn’t available for the Lifetime Health Cover loading portion of membership payments.

The rebate amount is based on your age and assessable income*. You can find out more about the thresholds set by the Australian Taxation Office for the 2016/17 financial year on their website www.ato.gov.au.

 Base TierTier 1Tier 2Tier 3
Singles
Families
Less than $90,000
Less than $180,000
$90,001 - $105,000
$180,001 - $210,000
$105,001 - $140,000
$210,001 - $280,000
$140,001 or more
$280,001 or more
Rebate entitlement^ based on age (of the oldest person on your cover) and assessable income
Rebate
64 years or younger26.791%17.861%8.930%0%
65-69 years31.256%22.326%13.395%0%
70 years or older35.722%26.791%17.861%0%
Medicare Levy Surcharge
All ages0.00%1.00%1.25%1.50%

^ Rebate percentages shown are equivalent to the actual rebate entitlement and are effective for payments made from 1 April 2016 and are indexed annually.

* For the calculation of assessable income which is known as income for Medicare Levy Surcharge purposes, please seek the advice of your tax agent, financial advisor or contact the Australian Tax Office (ATO) Help Line on 132 862.

A Member can choose to claim the appropriate rebate up front as a lower premium; however can also nominate to claim a lower rebate than their entitlement, or in fact no rebate at all, and reconcile this when lodging their annual tax return.

The Australian Government Rebate on private health insurance is undergoing further changes. From 1 April 2014 rebate eligibility is based on a Member’s age and assessable income* but will be indexed by CPI (Consumer Price Index) each year. Essentially this will mean that the standard rebate amounts that have historically applied will be indexed each year using a ratio of the average industry premium increases and CPI.

Premiums quoted by the Fund will take into consideration these latest changes and will not require additional input or calculation by our Members apart from the standard age and assessable income* information.

From 1 April 2014, the rebate will be indexed each year by the difference between CPI and the industry average increase in premiums using a Government-calculated formula. More information on this calculation can be found of the Department of Health’s website.

It’s up to you to nominate a rebate tier (based on your age and assessable income*). If you don’t tell us, or if you choose the wrong tier, don’t worry - the Australian Tax Office will work out any differences when you put in your annual tax return.

If you aren’t sure which rebate tier you should choose, please contact your tax agent, financial advisor or the Australian Taxation Office.

Most people choose to take their rebate up front as a lower premium, but if you’d prefer to claim the rebate as a lump sum through your tax at the end of the financial year, you can just pay the full premium.

* For the calculation of assessable income which is known as income for Medicare Levy Surcharge purposes, please seek the advice of your tax agent, financial advisor or contact the Australian Taxation Office (ATO) Help Line on 132 862 or visit their website.