Avoiding Lifetime Health Cover Loading: A Guide for Australian Expats Returning Home – Returning to Australia can be an exciting however there are certain financial considerations you need to address, and one of them is the Lifetime Health Cover (LHC) loading.
LHC loading is an additional cost imposed on Australian citizens who do not have private hospital cover and who choose to take out hospital cover later in life.
Fortunately, there is a way for Australian expats to avoid or reduce this burden by applying for a Passenger Movement Record (PMR) from the Department of Immigration.
In this article, we will guide you through the process of avoiding LHC loading as an Australian expat returning home.
Understanding Lifetime Health Cover (LHC) Loading
Lifetime Health Cover (LHC) is a government initiative designed to encourage Australians to take out private hospital insurance earlier in life and maintain it.
The LHC loading is applied as an extra premium on top of your regular private health insurance premium if you decide to take out hospital cover after the age of 31.
The loading increases by 2% for each year you are aged over 30 when you take out private hospital cover. For example, if you take out private hospital cover at age 40, you will pay an additional 20% loading on top of your premium.
However, if you are an Australian expat returning home, there is a way to reset the clock and avoid or reduce LHC loading.
Obtaining a Passenger Movement Record (PMR)
A Passenger Movement Record (PMR) is an official record of your international travel movements in and out of Australia.
It is issued by the Department of Immigration and Border Protection and can be a valuable document for returning expats, especially when it comes to LHC loading.
Here’s how you can obtain a PMR:
- Apply Online: You can apply for a PMR online through the Department of Home Affairs website. The online application process is straightforward and user-friendly.
- Provide Required Information: When applying for a PMR, you will need to provide personal details, such as your name, date of birth, passport details, and travel history, including departure and arrival dates for each trip.
- Pay the Fee: There is usually a fee associated with obtaining a PMR. Ensure you make the necessary payment as part of the application process.
- Wait for Processing: After submitting your application, you will need to wait for the Department of Home Affairs to process your request. This may take some time, so it’s advisable to apply well in advance of your return to Australia.
Benefits of Obtaining a PMR
Once you have your PMR, it can be instrumental in avoiding or reducing LHC loading when you decide to take out private hospital cover upon your return to Australia.
Here’s how it works:
- Resetting the Clock: LHC loading is calculated based on the number of years you were without hospital cover after the age of 31. By obtaining a PMR that shows you were residing overseas during this time, you can effectively reset the clock and avoid the loading altogether.
- Reducing Loading: If you have already incurred some LHC loading, obtaining a PMR can still be beneficial. The loading percentage reduces for each year you have held private hospital cover, and having a PMR can help you prove your overseas residence, potentially reducing the loading you would otherwise face.
By obtaining a Passenger Movement Record (PMR) from the Department of Immigration and Border Protection, you can reset the LHC clock or reduce loading, saving you money and ensuring you have access to affordable private health insurance upon your return.
Be sure to apply for your PMR well in advance of your return to Australia to ensure a smooth transition and financial peace of mind.