2015 TAX RETURN INFORMATION HEALTH INSURANCE REBATE, MEDICARE LEVY SURCHARGE & MEDICAL EXPENSES REBATE

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1 2015 TAX RETURN INFORMATION HEALTH INSURANCE REBATE, MEDICARE LEVY SURCHARGE & MEDICAL EXPENSES REBATE The rules about tax and health expenditure are now extremely complex. A universal health insurance rebate and un-means-tested medical expenses rebate were seen to be unfair. The Parliament decided to make them fairer by making them complicated and by removing the medical expenses rebate from most people. We are not sure that you will think the same if your three children need orthodontic treatment. Note that income for the purposes of these rebates and surcharges is not the same as taxable income. Fringe benefits, extra superannuation and other items are added back, which is why we need considerable information about your spouse s income. Your spouse includes another person (whether of the same sex or opposite sex) who: you were in a relationship that was registered under a prescribed state or territory law although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple THE MEDICAL EXPENSES REBATE IS BEING PHASED OUT This is the final year for claiming (if eligible) a net general medical expenses rebate. For most there is no need to keep all those fiddly receipts from now on The disability care, aged care and attendant care finishes in

2 Health Insurance Rebate Status Income thresholds Base tier Tier 1 Tier 2 Tier 3 Single $90,000 or $90,001 $105,001 $140,001 or $105,000 $140,000 Family $180,000 or $180,001 $210,001 $280,001 or $210,000 $280,000 Age Rebate for premiums paid, 1 July March 2015 Under 65 yrs % % 9.680% 0% yrs % % `14.520% 0% 70 yrs or over 38.72% % 19.36% 0% Age Rebate for premiums paid, 1 April June 2015 Under 65 yrs 27.82%% 18.55%% 9.27%% 0% yrs 32.46%% 23.18% 13.91% 0% 70 yrs or over 37.09% 27.82% 18.55% 0%

3 Medicare Levy Surcharge If you and your dependants were not covered for private hospital insurance throughout the year Unchanged Tier 1 Tier 2 Tier 3 Singles $90,000 or $90,001 - $105,000 $105,001 - $140,000 $140,001 or Families $180,000 or $180,001 - $210,001 - $280,001 or $210,000 $280,000 Medicare levy surcharge rate 0% 1% 1.25% 1.5% Note that if you are covered for some of the year, the surcharge is pro-rated for the number of days you were without cover. Medical Expenses Rebate Family status ATI threshold What can I claim? Single (single at 30 June 2015 and no dependent children) $90,000 or 20% of net medical expenses over $2,218 above $90,000 10% of net medical expenses over $5,233 Family (with a spouse at 30 June 2015, or dependent children at any time during the year, or both) $180,000* or above $180,000* 20% of net medical expenses over $2,218 10% of net medical expenses over $5,233 * Plus $1,500 for each dependent child after the first.

4 Medical Expenses Rebate: Allowable medical expenses Net medical expenses are your total medical expenses minus refunds from Medicare and private health insurers which you, or someone else, received or are entitled to receive. To be eligible to claim this offset, you must have either: Received this offset in your AND income tax assessment, or Paid for medical expenses relating to disability aids, attendant care or aged care. If you received this offset in your AND income tax assessment, there is no change to the types of net medical expenses that you can claim. If you did not receive this offset in your AND income tax assessment, you can only claim net medical expenses relating to disability aids, attendant care or aged care is the final year you can claim un you have medical expenses relating to disability aids, attendant care or aged care in this case, you can claim the tax offset for these expenses up to the income tax year. This offset is income tested. If you are eligible for the offset, the percentage of net medical expenses you can claim is determined by your adjusted taxable income (ATI) and family status.

5 EXPENSES THAT CAN BE INCLUDED IF YOU DID NOT RECEIVE A REBATE IN 2013 AND 2014 Disability aids are items of property manufactured as, or generally recognised to be, an aid to the functional capacity of a person with a disability but, generally, will not include ordinary household or commercial appliances. Attendant care expenses relate to services and care provided to a person with a disability to assist with every day living, such as the provision of personal assistance, home nursing, home maintenance, and domestic services. Aged care expenses relate to services and accommodation provided by an approved aged care provider to a person who is a care recipient or continuing care recipient within the meaning of the Aged Care Act EXPENSES THAT CAN BE INCLUDED IF YOU DID RECEIVE A REBATE IN 2013 AND 2014 Allowable medical expenses must relate to an illness or operation paid to legally qualified doctors, nurses or chemists and public or private hospitals. However, expenses for some cosmetic operations are excluded. Medical expenses include payments: o o o to dentists, orthodontists, or registered dental mechanics to opticians or optometrists, including for the cost of prescription spectacles or contact lenses to a carer who looks after a person who is blind or permanently confined to a bed or wheelchair. for therapeutic treatment under the direction of a doctor for medical aids prescribed by a doctor for artificial limbs or eyes and hearing aids for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy) for laser eye surgery, and for treatment under an in-vitro fertilisation program to nursing homes or hostels (not retirement homes) if made to an approved care provider for an approved care recipient s permanent or respite care for personal or nursing care, not just for accommodation. ( see Residential aged care expenses notes below*) Medical expenses not allowable: Expenses which do not qualify for the tax offset include payments made for:

6 cosmetic operations for which a Medicare benefit is not payable dental services or treatments that are solely cosmetic therapeutic treatment where the patient is not formally referred by a doctor (a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment) chemist-type items, such as tablets for pain relief, purchased in retail outlets or health food stores inoculations for overseas travel non-prescribed vitamins or health foods travel or accommodation expenses associated with medical treatment contributions to a private health insurer purchases from a chemist that are not related to an illness or operation life insurance medical examinations ambulance charges and subscriptions funeral expenses * Residential aged care expenses further notes An approved care recipient s residential aged care payments usually include an amount for personal or nursing care if the recipient has an aged care assessment team (ACAT) assessment that they require either low- or high-level care. Residential aged care payments can be for: daily fees income tested daily fees extra service fees, and accommodation charges, periodic payments of accommodation bonds or amounts drawn from accommodation bonds paid as a lump sum The following are expenses which cannot be included: lump sum payments of accommodation bonds interest derived by care providers from the investment of accommodation bonds (because these are not payments for residential aged care) payments for people who were residents of a hostel before 1 October 1997 and who did not have a personal care subsidy or a respite care subsidy paid on their behalf at the personal care subsidy rate by the Commonwealth (un they have subsequently been reassessed as requiring care at levels 1 to 7 or received an ACAT assessment showing that they require either low or high level care) payments for people who have either been assessed as requiring level 8 care or who have not received an ACAT assessment showing that they require either low or high level care