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Government confirms opportunity for private health insurance savings

2 September 2011 - 5:55pm

Health minister Nicola Roxon has confirmed that Australians will still be able to obtain the full 30 per cent rebate for their private health insurance if they pay for 12 months in full prior to December 31, 2011.

The loophole will apply if the legislation currently before parliament is passed, meaning that policyholders will have their rebate assessed based on their earnings.

Roxon told The Australian: "The legislation makes clear that the rebate changes will take effect when people pay their premiums on or after January 1, 2012."

By paying for 12 months in advance before the year is out, insurance holders would be able to skip the means test for 2012.

Under the government's proposal, families earning over $160,000 - and individuals on $80,000 - will have the 30 per cent rebate withdrawn and replaced by a system which measures the rebate against their income.

This is the third time that the Gillard government has tried to pass the bill, as it has been blocked twice previously in the senate.

It currently faces opposition from key independents - including Rob Oakeshott, who has publicly criticised the move.