Print version of this page (PDF 192KB)

From 1 July 2012 your rebate may change. Find out if you are affected.

Most Australians with private health insurance receive a 30 per cent rebate from the Australian Government to help cover the cost of their premiums.

From 1 July 2012, the private health insurance rebate will be income tested. Do you expect to earn more than $84,000 as a single or more than $168,000 as a family in the 2012-13 financial year?

Using the table below, work out which tier you are in to see how the changes will affect you. If your rebate is to change, contact your private health insurer and tell them which tier you are in. They will adjust your rebate so you can avoid a potential tax liability.

INCOME
	NO CHANGE	TIER 1	TIER 2	TIER 3
Singles	$84,000 or less	$84,001 – $97,000	$97,001 - $130,000	$130,001 +
Families	$168,000 or less	$168,001- $194,000	$194,001 - $260,000	$260,001 +
PRIVATE HEALTH INSURANCE REBATE
AGE	NO CHANGE	TIER 1	TIER 2	TIER 3
UNDER 65	30%	20%	10%	0%
65-69	35%	25%	15%	0%
70+	40%	30%	20%	0%

Important changes to the Medicare levy surcharge

From 1 July 2012, the Medicare levy surcharge (MLS) income test will change.

If you are single, earn more than $97,000 and don’t have private health insurance hospital cover your MLS will increase.

If you are a family, have a combined income of more than $194,000 and don’t have hospital cover for you, your partner, and your children – your MLS will increase.

The MLS will also apply if you choose not to maintain your existing hospital cover.

INCOME
	NO CHANGE	TIER 1	TIER 2	TIER 3
Singles	$84,000 or less	$84,001 – $97,000	$97,001 - $130,000	$130,001 +
Families	$168,000 or less	$168,001- $194,000	$194,001 - $260,000	$260,001 +
MEDICARE LEVY SURCHARGE
ALL AGES	0.0%	1.0%	1.25%	1.5%

Fast facts – what you need to know

• If your rebate is to change, contact your private health insurer now and tell them which tier you are in to avoid a potential tax liability.
• Single parents and couples (including de facto couples) are subject to the family tiers.
• For families with multiple children, the income threshold increases $1,500 for each child after the first. For example, a Tier 1 family with three children will have its income threshold increased by $3,000 – from $168,001 to $171,001.
• If you or your family don’t have private health insurance hospital cover, or you choose to not to maintain your cover, you will pay the Medicare levy surcharge if you earn over $84,001 (single) or $168,001 (family) in the 2012-13 financial year.
• You may also pay Lifetime Health Cover if you buy hospital cover when you are 31 or older.
• The tiers are based on more than your taxable income. To work out your income, use the Australian Taxation Office income calculator.
• For more information, see our frequently asked questions
• For examples of the income test in action, see our fact sheet (PDF 173KB)