How is the Government making private health insurance more affordable? 

	The Government is committed to making private health insurance more affordable and more accessible for all Australians.  To this end, the Government is replacing the current Private Health Insurance Incentives Scheme (PHIIS) with a more generous tax rebate/benefit which will be available to all private health fund members.  The new initiative will be available as a rebate on tax or a direct payment from the Government.  The PHIIS will continue to operate up to the introduction of the new initiative.  This means current PHIIS recipients will be entitled to part-year assistance for 1998-99.
The new rebate will cost around $1 billion in its first full year of operation.
Who will be eligible for the tax rebate/benefit?
Eligibility for the new initiative will not be means tested.  All members of private health funds will be eligible for the tax rebate/benefit.
When will the tax rebate/benefit take effect?
The new tax rebate/benefit will take effect from 1 January 1999.
What level of assistance will the new initiative provide?
Members of private health funds will receive a 30 per cent benefit on the cost of their health insurance contributions  as either a rebate on tax or a direct payment from the Government.  For example, a family with annual private health insurance contributions of $2,000 will be entitled to a rebate of $600.  
Under the new tax system, the new benefit is as generous or more generous than full income tax deductibility for health insurance premiums for more than 80 per cent of taxpayers.  However, it is fairer than a tax deduction because income tax deductibility would only assist those people with sufficient tax liability to take advantage of the deduction.
How will the tax rebate/benefit be paid?
The new initiative will be administered by the new Family Assistance Office.  Taxpayers will be able to claim a tax rebate when they lodge their annual taxation return.  Alternatively, a direct payment from the Government will be available from an extensive network of shopfronts or through the mail.	
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How is the Government making private health insurance more affordable?

	Those families and individuals who pay for private health insurance through a single premium payment can seek an immediate direct payment by providing proof of purchase to the Family Assistance Office.  For those who pay their insurance by instalment, a direct payment will also be available by instalment.	

For further information	

‘A New Tax System’  Chapter 1.
Other fact sheets:  No. 231  ‘How will the GST apply to health services?’ and No. 233  ‘How will the GST apply nursing homes, hospices and hostels?’.
The Government’s Tax Reform Website:  http://www.taxreform.gov.au
Tax Reform Information Centre:  Telephone 13 30 99