We are used to hearing of Austerity measures in Greece but Austerity in Australia? Yes it has already begun however here are some new cutbacks that will increase your costs:
“The government’s rebate applied to private health insurance will be calculated using commercial premiums as at 1 April 2013 and then indexed annually by the lesser of CPI or the actual increase in commercial premiums. This will be used to determine an individual’s private health insurance rebate.” (source ATO).
So what that means is when your private health premiums go up by more than the CPI (which is highly likely given the current world economy) your 30% rebate won’t be calculated on what you pay but instead will be calculated on a far lesser amount. This isn’t law yet so we’ll see how it plays out but it wouldn’t be a stretch to consider the possibility of the actual rebate % on actual premiums paid being effectively reduced to say 2% to 5%. If that were to occur then I guess it could be the nail in the coffin for the Public Health system as millions dump their private health fund and swamp the public hospitals. Result = long term pain for short term gain, aka short sighted policy.
And here’s another one for people who get in late:
“From 1 July 2013, the private health insurance rebate will no longer be paid on any lifetime health cover loading applied to the cost of a private health insurance policy for lifetime health cover. Lifetime health cover is not paid by all individuals – it is a penalty that applies where an individual has not taken out and maintained private health insurance from the year a person turns 31” (source ATO).
Ouch!
I am pretty confident we will see more and more cutbacks (i.e increasing personal expenses) over the coming years due to the global fallout. The self employed business owner will fare better than someone who is not self employed. Self managed super funds are also looking good.
