Australian Government Private Health Insurance Rebate

Are you aware the Australian Government has an initiative in place designed to assist Australians in meeting their private health insurance costs? This is called the Australian Government Private Health Insurance Rebate.

Understanding the key aspects of this rebate may help you save time, money and potential tax implications.

Why does the rebate exist?

The rebate was introduced as an incentive to encourage Australians to take out private health insurance in order to take pressure off the public health system. The rebate makes private health insurance more affordable and more accessible.

How does the Australian Government Private Health Insurance Rebate work?

The rebate is based around your income. This means the level of your rebate depends on several factors, including your annual taxable income and the number of dependent children you have.

What are the income thresholds?

The income thresholds for 2015-16, 2016 -17 and 2017-18 [1] are:

Singles Less than
Couples/ Families Less than

For families with children, the thresholds are increased by $1,500 for each dependent child after the first. Single parents and couples (including de facto couples) are subject to family tiers.

Who is eligible for the rebate?

The rebate is available to any Australian Citizen or Permanent Resident who holds a full Medicare Card, and who has taken out private health insurance cover with a registered fund. The Australian Government Private Health Insurance Rebate applies to all types and all levels of cover.

Which portion of my income will determine my rebate entitlement?

Your rebate will be determined by your taxable income, your fringe benefits, your superannuation contributions, minus any net investment losses. If you have a spouse, your combined income will be used to calculate your rebate entitlement [2].  For more information on the Australian Government Private Health Insurance Rebate, visit the Australian Taxation Office.

What’s the definition of a dependent child?

Under the Private Health Insurance Act 2007, a dependent child is defined as either:

  • a person who is under 18 years old
  • a dependent child who is under 25 years of age and does not have a partner

It’s important to note that different health funds have different classifications for a ‘dependent’ child and these variations can impact your policy. Some funds consider a member’s child as a dependant until they turn 18 while others consider the age to be 21 or 22. Once a child reaches the cut-off age, in some cases they can be on the policy as a student dependant, or an adult dependant. Anyone covered as a dependent child on a private health insurance policy is not considered to have a share of the cost of the policy and is not income-tested to determine their entitlement to a private health insurance rebate.

Call our experts on 1300 905 472 for further information on who can be listed as a dependent child on your policy, and how this will impact you.

What level of rebate will I get?

The table below shows the rebate you’ll be eligible to receive from 1st April 2016 [3].

Australian Government Rebate
Under 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%

 How do I claim the rebate?

There are two ways to claim your rebate:

1. Claim upfront and reduce your premium.

2. Claim as part of your tax return.

For more information visit the Australian Taxation Office.

Call our experts on 1300 905 472 to discuss your individual health insurance needs.

For further information visit:

Medicare Levy Surcharge
How to Save on Health Insurance
Lifetime Health Cover
Australian Taxation Office – Private Health Insurance Rebate
Australian Government Department of Health