The cost of living in Australia is skyrocketing, and if it seems like you can’t escape the extra hit to the hip pocket, you’re not alone.
Prices are climbing everywhere we turn, making the end of the financial year a great time to review your household bills to see if you can save some of that hard-earned money and start the second half of the year. on the right foot.
But where to start ? Let’s start with private health insurance.
What does private health insurance have to do with EOFY?
We know you’re probably wondering “what does private health insurance have to do with EOFY?” For many this may be confusing, but what you may not realize is that June is one of the busiest times of the year for private health insurers. This month many Australians are being asked to register or review their policies.
One reason for this is that high-income earners are looking to avoid paying additional tax through the Medicare Levy Surcharge (MLS) in the new fiscal year. It’s usually those of us whose taxable income is over $90,000 for singles or over $180,000 for families.
So, if you fall into this category, you may be able to find suitable private hospital coverage for a price similar to the additional tax payable through MLS.
Think carefully about the difference in cost between the surcharge and taking out suitable hospital cover.
Another reason why June is a busy time for private health insurance is that young Australians are looking to buy cover before they turn 31 to avoid paying higher premiums later in life due to the load of Lifetime health cover (LHC).
Unlike MLS, loading the LHC is not a tax. This is effectively a government penalty for people who do not continue to hold eligible hospital coverage in July after their 31st birthday.
So if you have a higher income or are about to turn 31, the EOFY is a particularly good time to consider whether to purchase suitable private hospitalization cover.
What else should I check?
If you have private health insurance, another thing you might consider this EOFY is whether or not your premium increased on April 1.
If so, don’t just accept that higher bounty. Consider shopping around to see if you can find a better deal.
If your premium rate increase has been delayed until later in the year, don’t wait to look for a better deal. You may already be paying more than you need for private health insurance.
Should I stop there?
The EOFY is a good time to review all your finances and look for ways to save money in the coming year.
Too often people end up paying what we call lazy tax, which means they pay more than necessary for things like private health insurance or electricity, because they haven’t reviewed their policy or plan for years and may no longer be doing good business.
Don’t just set and forget. Start the new financial year off right and go over all your household bills and expenses, especially at a time when many Australian households are under increased financial pressure they haven’t experienced in years.
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