What Rebates Can You Get With Health Insurance?

Means testing has been introduced into the private health insurance rebate, which is dependent on income and age.

In 1999, the federal government introduced a private health insurance rebate to help Australians with the cost of private health insurance premiums. In July 2012 this rebate began to be means-tested and the proportion of rebate that you receive is now dependent on your income threshold and your age. The range of rebate is from 0% to 40% – although note that the government is no longer paying a rebate on 100% of your private health insurance premium.

How much of a rebate do I get?

Currently, the income test thresholds are as follows:

Singles < $90,000 $90,001-105,000 $105,001-140,000 > $140,001
Families < $180,000 $180,001-210,000 $210,001-280,000 > $280,001
 Age Standard Tier 1 Tier 2 Tier 3
< 65 26.791% 17.861% 8.930% 0%
65-69 31.256% 22.326% 13.395% 0%
70+ 35.722% 26.791% 17.861% 0%
Medicare Levy Surcharge
All ages 0.0% 1.0% 1.25% 1.5%
Source: PrivateHealth.gov.au

What’s my income?

For the purposes of assessing your private health insurance eligibility, your income for surcharge purposes is the total of the following amounts. Your:

  • taxable income, including the net amount on which family trust distribution tax has been paid
  • reportable fringe benefits, as reported on your payment summary
  • total net investment losses, including both net financial investment losses and net rental property losses
  • reportable super contributions, including reportable employer super contributions and deductible personal super contributions.

If you are 55–59 years old, you minus from the total above any taxed element of a super lump sum, other than a death benefit, which you received that does not exceed your low rate cap.

If you’re not sure what level of rebate you may be entitled to, try the the Private Health Insurance Rebate Calculator on the Australian Taxation Office (ATO) website.

Source: ATO

How can I claim my rebate?

You can either claim your rebate via your income tax return at the end of financial year or by way of a reduced health insurance premium. If you decide to claim the rebate by way of a reduced premium, be aware that you may receive an expensive surprise in the form of a tax bill if you miscalculate your entitlement!


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