Australian Government Private Health Insurance Rebate
Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested. The table below details the different rebate amounts and Medicare Levy Surcharge levels.
The rebate applies to hospital, general treatment and ambulance policies. It does not apply to overseas visitors cover. The rebate levels applicable for 1 July 2013 to 30 June 2014 are:
|< age 65||30%||20%||10%||0%|
Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.
The rebate income thresholds are indexed annually. For the previous thresholds for the 2012-13 year, see the Department of Health's Private Health Insurance Circular 14/12.
How can I calculate or estimate my income?
The tiers are based on your income for Medicare levy surcharge purposes. For more information and to use an income calculator visit the ATO's Medicare Levy Surcharge Income Calculator or call the Australian Taxation Office (ATO) on 132 861.
How can I work out my rebate entitlement?
You can use the table above or the Private Health Insurance Rebate Calculator on the ATO website.
Claiming the Rebate
If you are eligible for the rebate, there are three ways you can claim:
- through a reduced premium;or
- through your tax return with ATO.
If you choose to receive your rebate through your insurer, you will be asked to nominate the tier you expect to fall into in order to avoid a tax liability. You can nominate your tier by contacting your insurer or by filling out the Medicare rebate claim form.
What happens if I nominate an incorrect tier?
If you choose to claim the rebate as a premium reduction, you will be asked to nominate a tier based on your estimated income.
If you nominate a tier that results in a lower rebate than your income entitles you to, you will receive a tax offset through your tax return at the end of the financial year.
If you nominate a tier that results in a higher rebate than your income entitles you to, you will incur a tax liability through your tax return at the end of the financial year. This means you could have a tax debt. There are no additional penalties for estimating incorrectly.
Your private health insurer will give you a statement at the end of the financial year to help you complete your tax return..
For further information about claiming the rebate please visit the Department of Human Services - Claiming the rebate web page.
Removal of the rebate on Lifetime Health Cover from 1 July 2013
Lifetime Health Cover (LHC) is a financial loading applied on top of your hospital premium at a rate of 2% for every year you are aged over 30 when you take out hospital cover, up to a maximum of 70%. The LHC loading is removed once you have held hospital cover and paid the loading for 10 continuous years.
If you currently pay a LHC loading, as of 1 July 2013, the Rebate will no longer apply to the LHC component of your hospital cover premiums. You will still receive the Rebate on the standard component of your hospital cover.
For more information about the change, please see the Department of Health - Removal of the rebate on Lifetime Health Cover loading.
For information about your policy, please contact your health fund.
The Australian Taxation Office has information at:
The Department of Health has information on the 1 July 2012 changes at: