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If you have health insurance, you may be eligible for the private health insurance rebate. The Australian Government provides this rebate to make private healthcare more affordable for older and lower-income Australians.

The private health insurance rebate is based on your:

  • Taxable income (the rebate is income tested, meaning lower income earners will be eligible for a higher rebate)
  • Your age
  • Your relationship and parental status.

Every year, private health insurance members will be able to claim the rebate back from the government. Don’t worry; it’s a simple process! Assuming you meet the eligibility requirements, you can claim the Australian private health insurance rebate in one of two ways.

health insurance form

1. Opt for a reduced premium

Ask your health insurer (usually when signing up) to apply your rebate as a discount on your policy’s premiums, if possible.

Before your insurer can do this, you’ll need to notify them of the income threshold you fall under so you can receive the correct rebate.

The annual discount on your premiums will be equal to what you would have received if you claimed your rebate at tax time. Plus, it’s one less box to tick when you file your tax return!

When choosing this option, make sure you inform your insurer the moment your financial situation changes, so you don’t incur any tax liabilities.

2. Receive the rebate as a tax offset

Claiming the private health insurance rebate is relatively straightforward if you opt to claim it as a lump sum through your annual tax return. Your insurer will provide you with a statement at the end of each financial year to help you apply for the correct rebate.

Ensure you complete your tax return and enter your private health insurance details correctly to avoid delays in receiving the rebate.

tax return form

How do I calculate my rebate entitlement?

The private health insurance rebate applies as a percentage of your extras, hospital cover or combined policy premiums. However, the rebate doesn’t apply to overseas visitor health cover.

These rebate tiers are effective from 1 July 2023.

income tiersBase tierTier oneTier twoTier three
SinglesUnder $93,000$93,001-108,000$108,001-144,000Over $144,001
FamiliesUnder $186,000$186,001-216,000$210,001-288,000Over $288,001
Rebate amount
Under 6524.608%16.405%8.202%0%
Over 7032.812%24.608%16.405%0%
Source: Privatehealth.gov.au

Single parents and couples are included in the family tiers. The income thresholds for families with dependent children are increased by $1500 for each child after the first.

For more details, refer to the Australian Taxation Office (ATO) website or call us to speak to one of our health insurance experts.

Things to remember about your health insurance rebate

  • If you’re a higher-income earner, you may only be entitled to a reduced rebate or none at all. In fact, if you’re a high-income earner without private hospital cover, you may also need to pay the Medicare Levy Surcharge (MLS).
  • You cannot claim the rebate on any amount you’ve paid towards your Lifetime Health Cover (LHC) loading (if applicable). Your rebate amount is only calculated against your policy’s base premiums (i.e. before any loading is applied).
  • The Australian Government usually adjusts the rebate percentage on 1 April each year. The government’s formula considers changes to the Consumer Price Index (CPI), as well as the average increase in private health insurance premiums (which also occurs annually).

Don’t just look to the rebate to save money

Make sure you also ask yourself if your current health insurance policy offers great value for your money. Over time, your situation might change, which means you might require more or less coverage from your policy. Or you might find that there’s a better deal available elsewhere.

Try our free comparison tool to weigh up a range of health insurance policies from some of Australia’s biggest insurers. You can compare cover options, premiums and excesses all in one place to help you look for a policy that fits you and your healthcare needs.

Or, if you have any questions about your policy, give us a call. We’re here to help!

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