Australian Government Rebate on private health insurance

Private health insurance rebate

Page last updated: 08 December 2014

The Australian Government provides an income tested rebate to help people meet the cost of private health insurance.

A person may claim the private health insurance rebate if they:

  • are eligible for Medicare;
  • have a complying health insurance product (CHIP) that provides hospital treatment, general treatment (also known as ancillary or extras) cover or both; and
  • have an income for Medicare levy surcharge (MLS) purposes below Tier 3 shown in the table below.
As part of the 2014-15 Budget, the Government announced that from 1 July 2015 the income thresholds used to determine the Australian Government rebate on private health insurance (the Rebate) and MLS would be kept at the 2014-15 rates for three years. The necessary legislation to make these changes came into effect on 26 November 2014.

From 1 July 2015 to 1 July 2018 the income thresholds used to determine a person’s eligibility for the Rebate will be based on the following table:

Base Tier
Tier 1
Tier 2
Tier 3
Singles
$90,000 or less$90,001 - 105,000$105,001 - 140,000$140,001 +
Families
$180,000 or less$180,001 - 210,000$210,001 - 280,000$280,001 +
The Rebate amounts will continue to be adjusted annually on 1 April based on the Rebate Adjustment Factor.

The Private Health Insurance Rebate Percentages are as follows:

Private Health Insurance Rebate effective from 1 July 20914 to 31 March 2015
Base Tier
Tier 1
Tier 2
Tier 3
Under 65
29.040%19.360%9.680%0%
65 - 69
33.880%24.200%14.520%0%
70+
38.720%29.040%19.360%0%

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first. Rebate levels are adjusted annually on 1 April based on the Rebate Adjustment Factor.

The tiers are based on your income for Medicare levy surcharge purposes.

To work out which tier you are in, use the Australian Taxation Office calculator.

There are two ways you can claim your rebate:
  • as a premium reduction through your private health insurer (you pay less upfront to your insurer). If you want to claim your rebate as a reduced premium, contact your insurer.
  • as a tax offset when lodging your annual tax return. For more information about claiming your rebate as a tax offset, visit the Australian Taxation Office or call 132 861.
If you choose to receive your rebate through your insurer you should nominate the tier you expect to be in to avoid a potential tax liability.

If you or your family don’t have hospital cover, or you choose not to maintain your cover, you may have to pay the Medicare levy surcharge.

If you have more questions about the private health insurance rebate, see frequently asked questions.