What is the private health insurance rebate?

The Australian Government Private Health Insurance rebate is a government initiative to help Australians pay their health insurance premiums. If you have private health insurance (hospital, extras, or a combined policy), this rebate can either be claimed through your tax return or in the form of a reduced policy premium.

Why does the Australian Government have the rebate in place?

The more people who buy private health insurance, the less stress is put on our public healthcare system (Medicare). This saves the government money.

Do I qualify for the rebate, and how much can I claim?

The amount of rebate you are entitled to depends on your taxable income, age, and relationship/parental status. You must be eligible for Medicare (e.g. hold a blue or green Medicare card) to receive the rebate, in addition to holding a private health insurance policy.

The income thresholds below will reportedly stay the same until the 30 June 2018, when they will be reviewed once again.

Private Health Insurance Rebate levels

Base Tier Tier 1 Tier 2 Tier 3
Singles Under $90,000 $90,001-$105,000 $105,001-$140,000 $140,001 +
Families* Under $180,000 $180,001-$210,000 $210,001-$280,000 $280,001 +
Under 65 25.93% 17.29% 8.64% 0.00%
65-69 30.26% 21.61% 12.97% 0.00%
70 and over 34.58% 25.93% 17.29% 0.00%
Retrieved from Department of Health | Information current as of 03/04/2017
^ For families with children, thresholds increase by $1,500 for each child after the first.
Families include couples, de facto couples, and single parents.

Claiming the health insurance rebate

As previously mentioned, the health insurance rebate can be claimed in one of two ways.

The easiest way to claim your rebate is to ask for it to be deducted directly from your health insurance premium.  This is an option you can select on your health insurance policy application. The alternative is to claim the rebate when you’re filing your annual tax return.

If you claim a rebate, but find you claimed the incorrect amount, the Australian Tax Office will simply correct the amount either overpaid or owing after your tax return has been completed. There is no penalty for making a rebate claim that turns out to have been incorrect.

I currently pay Lifetime Health Cover (LHC) loading. Does this affect my rebate?

No. Your rebate is calculated as a percentage of the base premium of your policy, regardless of any LHC you might pay.

Sorry, I’ve forgotten. What’s LHC loading?

If you haven’t taken out private hospital cover by the 1 July, following your 31st birthday, you will pay more in health insurance premiums – a 2% loading for each year you don’t have cover past your 30th birthday – when you eventually take out cover. For example, if you take out cover when you’re 32, you’ll owe a 4% loading on your private hospital insurance. It’s possible to attract a maximum of 70% loading. We talk more about it here.

I’m an overseas visitor. Can I apply for the rebate?

You must be eligible for Medicare, and hold private health insurance through a registered Australian health fund to qualify for the rebate.

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