Private Health loss of Rebate for some

[cove]

Julia and Wayne (the dynamic duo) want an extra $1300 for health from all 4 of us in our family.

I am not sure how the other 2,399,996 feel about paying to help them cover up the stupid stuff they spent money on.

Oh well it can be a few more FF points next year!

 

[drron]

Private Heath loss of Rebate for some

Julia and Wayne (the dynamic duo) want an extra $1300 for health from all 4 of us in our family.

...

Oh well it can be a few more FF points next year!

I love the way the PM and her ministers gloat about how fair this will make the tax system as no longer will the low income earners subsidise the high income earners health costs.Julia just look at the rate of taxes starting on 1/7/12 when the health subsidy changes come in-those with taxable incomes less than $18200 have a tax rate of...........0%.They are not subsidising anyone.Pity that our journalists cant even pick up these simple facts.

 

[rechoboam]

I believe you can file a notice asking your employer to reduce the amount of PAYG tax they withhold from your salary on the basis that your taxable income will be lower than the estimate the PAYG is being calculated upon, say for example, because you have a large negative gearing deduction to set off against that income.

But...when it turns out that your taxable income isn't lower then you will have to pay interest to the ATO on that catch-up tax bill. You might also have to pay a penalty if you didn't have a proper basis for the lower estimate.

So I doubt there is any way for wage and salary earners to use this cost-effectively.

If you have huge negative gearing going on it could be worth it in theory...wouldn't uyou be unlikely to earn more than you expect? I was going to do this when considering an investment property. Worth chatting to a qualified person about.

Edit: I actually had the form at one point...seemed pretty straightforward. Had to quit being an employee due to lack of Ff points for tax bills. Priorities...

 

[Peter2]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

Yes, although off topic this is one of the core things that grate on me at the moment... They love the politics of envy sound bite to say "oh those wealthy dudes can afford it etc etc" but never seem to mention that the take 46% of what you are earning compared to the low income earners.... Hey Julia, why not just come out and say you'd like to raise the 46% higher?

 

[jamesD]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

Yes, although off topic this is one of the core things that grate on me at the moment... They love the politics of envy sound bite to say "oh those wealthy dudes can afford it etc etc" but never seem to mention that the take 46% of what you are earning compared to the low income earners.... Hey Julia, why not just come out and say you'd like to raise the 46% higher?

Agreed. Again a bit OT myself, but our income tax system is based on Karl Marx's Das Kapital which says (for income tax) it should be paid based on "From each according to his need to each according to his abiltiy to pay". Which means to harder you work the more you get punished through the tax system. Which of course is crazy. I liken it to punishing a salesman by giving him less comission the more sales he makes.

 

[ferni]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

But income doesn't seem to increase in a linear fashion, it seems to increase closer to an exponential fashion. ie a 5k payrise for someone earning 50k is a lot, but offer someone who is on 200k a 5k payrise and they wouldn't really consider it worth much... Besides you don't mention the fact you get all the same tax rates as the lower income earner up until you earn a certain amount - you're only paying 45% on that over 180k....

 

[cove]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

We need to include the flood levy and the health insurance levy to the 45% rate so after these are added I think you will find the current personal rate is 47.5%.
Normally you would lower tax rates to collect more taxes as people will earn and declare higher taxable incomes when that happens.
Well that is what happened last time personal tax rates were reduced but maybe it won't go that way if ever there is a next time.

 

[rechoboam]

But income doesn't seem to increase in a linear fashion, it seems to increase closer to an exponential fashion. ie a 5k payrise for someone earning 50k is a lot, but offer someone who is on 200k a 5k payrise and they wouldn't really consider it worth much... Besides you don't mention the fact you get all the same tax rates as the lower income earner up until you earn a certain amount - you're only paying 45% on that over 180k....

So after November each year I work for the government 9 til 1 pm every day and my family from 1 to 5-- does that appear reasonable to you?!

 

[markis10]

But income doesn't seem to increase in a linear fashion, it seems to increase closer to an exponential fashion. ie a 5k payrise for someone earning 50k is a lot, but offer someone who is on 200k a 5k payrise and they wouldn't really consider it worth much... Besides you don't mention the fact you get all the same tax rates as the lower income earner up until you earn a certain amount - you're only paying 45% on that over 180k....

Try 47.5% with the medicare and floods added, then throw in the health insurance rebate loss.......

 

[james4321]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

I love the way the PM and her ministers gloat about how fair this will make the tax system as no longer will the low income earners subsidise the high income earners health costs.Julia just look at the rate of taxes starting on 1/7/12 when the health subsidy changes come in-those with taxable incomes less than $18200 have a tax rate of...........0%.They are not subsidising anyone.Pity that our journalists cant even pick up these simple facts.

Well ... anyone on an income less than $18200 can hardly look after themselves, let alone "subsidise anyone". At the other end of the scale, a high earner (whatever the definition of that is) can surely afford to hire one of the thousands of tax accountants to help them to minimise their tax. Unfortunately with a highly complex tax system such as we have in Australia, the tax minimisation industry is very active, but only available to those who can afford it.

 

[medhead]

A PAYG taxpayer could reduce the withheld tax and then pre pay tax ti the ATO to make up for it. Wouldn't that get around the issue of penalties and interest.

Why am I not surprised by all the so called Liberals complaining their loss of government welfare. For people that supposedly believe in self determination and minimal government intervention you certainly seem to be in favour of those things. Personally, an extra $10 or $20 a week is not going to kill me and the lost mid class welfare is only worth about 2 decent lunches. 2 less afternoons of gourmodising and 2 more salad sandwiches a year equals no change.

I love the way the PM and her ministers gloat about how fair this will make the tax system as no longer will the low income earners subsidise the high income earners health costs.Julia just look at the rate of taxes starting on 1/7/12 when the health subsidy changes come in-those with taxable incomes less than $18200 have a tax rate of...........0%.They are not subsidising anyone.Pity that our journalists cant even pick up these simple facts.

Sorry to tell you but people earning under $18k didn't pay tax already. They had this thing called the low income earner tax offset which meant any tax they paid up to $18k was refunded at the end of the year. Highly inefficient churning of money. That offset is going perhaps you can take off the blue undies for a second and realise this is a good thing, overall.

The other thing is that raising the tax free threshold gives every taxpayer a tax cut. Even you.


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[jamesD]

Re: Amex: Turn your recurring bills into ongoing rewards..1K bonus points per partner

Well ... anyone on an income less than $18200 can hardly look after themselves, let alone "subsidise anyone". At the other end of the scale, a high earner (whatever the definition of that is) can surely afford to hire one of the thousands of tax accountants to help them to minimise their tax. Unfortunately with a highly complex tax system such as we have in Australia, the tax minimisation industry is very active, but only available to those who can afford it.

But that is no excuse to uber tax those who put in far longer hours and effort - if I am working 12 hours a day and giving up some weekends to work then why should I have to pay a disproportionately higher amount of tax than someone who works less, has more lesure time and then has my taxes to pay for them if they get sick?. If the tax rate was equal for all then the high income earners would be contributing far in excess in any case.

 

[wafliron]

Re: ATO (tax office) payments by credit card

So after November each year I work for the government 9 til 1 pm every day and my family from 1 to 5-- does that appear reasonable to you?!

Just as a point of order, you're not working for the government in your analogy, you're working for the good of society (including both direct and more importantly, many, many indirect benefits for yourself and your family). Some small proportion of the tax we pay does go to paying politicians / bureaucrats / overheads, but the vast, vast majority goes towards defence / health / education / social security / NBN / etc.

A PAYG taxpayer could reduce the withheld tax and then pre pay tax ti the ATO to make up for it. Wouldn't that get around the issue of penalties and interest.

IANAA (I Am Not An Accountant ), but IMHO I can't see why that wouldn't work. You'd want to be very careful with the timing of the payments though I reckon.

Why am I not surprised by all the so called Liberals complaining their loss of government welfare.

I'm not typically a Liberal voter (I "swing" ) and even I am annoyed by this change. The reason I'm annoyed isn't specifically to do with the loss of welfare / extra cost, it's to do with the fundamentally flawed system it represents.

The real problem is not that the private health subsidy is now going to be means tested, it's that the subsidy - and, importantly, the Medicare Levy Surcharge - even exist in the first place. I have no fundamental issue with private health insurance, but it should not be a government subsidised system - that is what Medicare is for. If someone wants to have it that is fine, but they can pay for it, and those who choose not to pay for it should not be compelled to have it (which is what the Medicare Levy Surcharge does for the higher-earning segment of society).

Personally, at this stage in my life (healthy, relatively young person with no kids) I do not want private health insurance. But I'm essentially compelled to buy a basic level of cover as it would cost me more not to have it via the Medicare Levy Surcharge. Based on this you could argue my viewpoint is self-serving, but that's not it - the current subsidy / surcharge system makes no sense at all from either an left-wing or right-wing point of view.

 

[medhead]

But that is no excuse to uber tax those who put in far longer hours and effort -

The major problem with this claim is that everyone doesn't get the same hourly pay. I'm sure there are many thousands of people who work longer than you and harder than you but only get paid minimum wage, or less if trapped in exploitative industries. (I reckon I see a few of those as I walk through kings cross to work)


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[medhead]

IANAA (I Am Not An Accountant ), but IMHO I can't see why that wouldn't work. You'd want to be very careful with the timing of the payments though I reckon.

An issue sure but not insurmountable. It is simply explained by "circumstances changed" and "I realised I'd have to pay more tax than I originally estimated so I did the right thing and made advanced payments"

I'm not typically a Liberal voter (I "swing" ) and even I am annoyed by this change. The reason I'm annoyed isn't specifically to do with the loss of welfare / extra cost, it's to do with the fundamentally flawed system it represents.

The real problem is not that the private health subsidy is now going to be means tested, it's that the subsidy - and, importantly, the Medicare Levy Surcharge - even exist in the first place. I have no fundamental issue with private health insurance, but it should not be a government subsidised system - that is what Medicare is for. If someone wants to have it that is fine, but they can pay for it, and those who choose not to pay for it should not be compelled to have it (which is what the Medicare Levy Surcharge does for the higher-earning segment of society).

Personally, at this stage in my life (healthy, relatively young person with no kids) I do not want private health insurance. But I'm essentially compelled to buy a basic level of cover as it would cost me more not to have it via the Medicare Levy Surcharge. Based on this you could argue my viewpoint is self-serving, but that's not it - the current subsidy / surcharge system makes no sense at all from either an left-wing or right-wing point of view.

I agree in general. I think we need to remember that the Liberals gave us the Health insurance rebate and they are now the ones whinging about means testing of that rebate. adding means testing is a step towards removal of the rebate. So I'm not entirely clear if you agree with the means testing or not.

As for the operation of private health the other thing the Liberals gave us was the graduated increase in insurance premium based on age of taking up private health insurance. That forced me to maintain my insurance from an early age. At least I have some good news , once you get a family the Medicare surcharge becomes much less than private health insurance, roughly 50% IME. But you know private health insurance is a must have for me and I would maintain it regardless of rebate. It allowed me to get a professor plastic surgeon to remove a cist from my daughter's eye brow instead of a surgical resident in a public hospital. The emotional cost of a facial scar would have been enormous.


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[drron]

A PAYG taxpayer could reduce the withheld tax and then pre pay tax ti the ATO to make up for it. Wouldn't that get around the issue of penalties and interest.

Why am I not surprised by all the so called Liberals complaining their loss of government welfare. For people that supposedly believe in self determination and minimal government intervention you certainly seem to be in favour of those things. Personally, an extra $10 or $20 a week is not going to kill me and the lost mid class welfare is only worth about 2 decent lunches. 2 less afternoons of gourmodising and 2 more salad sandwiches a year equals no change.



Sorry to tell you but people earning under $18k didn't pay tax already. They had this thing called the low income earner tax offset which meant any tax they paid up to $18k was refunded at the end of the year. Highly inefficient churning of money. That offset is going perhaps you can take off the blue undies for a second and realise this is a good thing, overall.

The other thing is that raising the tax free threshold gives every taxpayer a tax cut. Even you.


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Mate you have totally missed the point of my post.I am not saying the changes are good or bad just pointing out the governments spin is just so much bl.... b*ll cough.Saying the lower paid will stop subsidising the rich is a lie.They didn't and they wont.
Also the spin on the unemployment figures saying how great the economy is going-3,800 less unemployed in January 2012 but only 1,700 extra in employment-and now they dont even tell you how many of those were in full time employment.More bs.
And I am quite frankly tired of pensioners coming in and telling me how they deserve their pension because I paid my taxes all those years.My stock answer now is well I guess I have paid at least 3x more in taxes therefore should I deserve 3x the pension?
And before you try and misrepresent me again-no I dont think so and am prepared to fund my own retirement.Also my taxes have actually gone up as they halved the super deduction for the over 60s.

 

[coyote25]

The rebate is a subsidy for a lifestyle / insurance choice. It's middle class welfare and the reason tax rates are what they are.

I'm hit by this but I've decided I want private health so I understand i pay the market rates. I'm unsure why people who are doing okay in a capitalist system what socialist support.

Let's have a hard look at welfare and support payments, keep the ones that help and support the community and then cut the rest, reducing taxes with the savings. Let's stop going further down the socialist path then necessary.

Btw 100% agree we do not work for the government when we pay tax we support the community we live in.

Personally I'm very grateful for the community we have and redirecting a subsidy from myself to other more needy matters to maintain our community is fine with me. Most of us travel overseas which I suspect we enjoy but i'm guessing we wouldn't trade for our local communities.

I do understand being unhappy paying more for a service but thats a choice you make for a private expenditure. Government should never have gotten into this.

 

[medhead]

Mate you have totally missed the point of my post.I am not saying the changes are good or bad just pointing out the governments spin is just so much bl.... b*ll cough.Saying the lower paid will stop subsidising the rich is a lie.They didn't and they wont.
Also the spin on the unemployment figures saying how great the economy is going-3,800 less unemployed in January 2012 but only 1,700 extra in employment-and now they dont even tell you how many of those were in full time employment.More bs.
And I am quite frankly tired of pensioners coming in and telling me how they deserve their pension because I paid my taxes all those years.My stock answer now is well I guess I have paid at least 3x more in taxes therefore should I deserve 3x the pension?
And before you try and misrepresent me again-no I dont think so and am prepared to fund my own retirement.Also my taxes have actually gone up as they halved the super deduction for the over 60s.

No I haven't missed your point at all the increase in the Tax free threshold is not a change at all. It has always been the same, except now you you are not paying tax on the first $18k you earn as well.

I find it BS to claim lower earners are not subsidizing the insurance rebate. Everyone earning between $18k and $83k has some amount of their tax go to the 0.1% earning $1 mil+ to pay for their health insurance. Fact!

Another little interesting fact is that 20% of taxpayers were in the top 2 tax brackets under the Liberals. That is now down to 15% under this government. Your tax burden might not have changed but it has overall for the top earners under Labor.

As for the unemployment measures they are determined the same now as under the Liberals. Would this even be an issue for you if Howard was still driving around in C1?

Pension you forgot the bit about how they fought and died in 2 world wars for us. Frankly I don't care about the pension, I'll provide for myself


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[anat0l]

So far the majority of this thread seems to conclude that these changes are patently bad because the affluent claim it smacks of socialism and communism.

 

[medhead]

Just on the increase in the tax free threshold. Very important point here. Increasing the threshold means that we no longer pay 15% tax on about $13000, that is about a $1950 reduction in tax. Lose a $1000 rebate and your still in front.

Another thing that means testing this rebate does is put a cap on government expenditure for the rebate. That is a financially responsible approach to government. Are people upset by this change because it contradicts their claims that the government is financially irresponsible?


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