The Australian Government Rebate on private health insurance was introduced as a financial incentive to help Australians afford private health cover. Under the scheme, you can choose to receive a rebate on your health insurance as a percentage of your overall premium, based on your income.
Basically, it makes health insurance more affordable, to encourage more people to use it.
You can choose to claim the appropriate rebate up front as a lower premium. You can also nominate to claim a lower rebate than your entitlement, or in fact no rebate at all, which gets returned as a lump sum when lodging your annual tax return.
The rebate amount is based on your age and assessable income*. You can find out more about the thresholds set by the Australian Taxation Office for the financial year at www.ato.gov.au. The rebate isn’t available for the Lifetime Health Cover loading portion of membership payments.
Rebate Income Thresholds
Sounds confusing right? The amount you receive as a rebate off your premium depends on how much you earn - higher income earners have a lower rebate percentage.
Income Threshold 2014/15 to 2022/23 Financial Years
| Base Tier | Tier 1 | |
|---|---|---|
| Singles | Less than $90,000 | $90,001 - $105,000 |
| Families | Less than $180,000 | $180,001 - $210,000 |
| Rebate entitlement^ based on age of the oldest person on your cover and assessable income | ||
| 64 years or younger | 24.608% | 16.405% |
| 65-69 years | 28.710% | 20.507% |
| 70 years or older | 32.812% | 24.608% |
| Tier 2 | Tier 3 | |
| Singles | $105,001 - $140,000 | $140,001 or more |
| Families | $210,001 - $280,000 | $280,001 or more |
| Rebate entitlement^ based on age of the oldest person on your cover and assessable income | ||
| 64 years or younger | 8.202% | 0% |
| 65-69 years | 12.303% | 0% |
| 70 years or older | 16.405% | 0% |
^ Rebate percentages shown are equivalent to the actual rebate entitlement and are effective for payments made from 1 April 2022 and are indexed annually.
Your premium quoted by the Fund will take the latest rebates into consideration, so the only information you need to provide us with for this will be your age and your assessable income, and to nominate a rebate tier. If you don’t tell us, or if you choose the wrong tier, don’t worry - the Australian Tax Office will work out any differences when you put in your annual tax return.
If you aren’t sure which rebate tier you should choose, please contact your tax agent, financial advisor or the Australian Taxation Office.
The rebate is indexed each year by the difference between CPI and the industry average increase in premiums using a Government-calculated formula. More information on this calculation can be found on the Department of Health’s website.
* For the calculation of assessable income which is known as income for Medicare Levy Surcharge purposes, please seek the advice of your tax agent, financial advisor or contact the Australian Taxation Office (ATO) Help Line on 132 862 or visit their website.