How the Health Insurance rebate works
The Federal Government 30% Rebate on Private Health Insurance was introduced on 1st January 1999 as an incentive for those Australians holding or applying for private health cover.
The rebate percentage is calculated on the age of the oldest person covered under the policy (see below) and is applicable to the cost of hospital cover, ancillary cover or a combined hospital and ancillary cover. You are entitled to the rebate if you hold a green or blue Medicare Card - this is irrespective of marital status or income.
| Age | Rebate Entitlement |
| Less than 65 years | 30% of the amount of the premium paid |
| 65 years to under 70 years | 35% of the amount of the premium paid |
| 70 years and over | 40% of the amount of the premium paid |
The rebate can be claimed in 3 different ways:
1. Claim the rebate as a reduced premium
Claiming the rebate off your regular premium debits is simple and often the preferred method for members.
By filling in the 30% Government Rebate form and submitting this with your application, your health insurance fund will apply the rebate to your fortnightly/monthly/annual premium - meaning you pay less.
Advantage: Very little paperwork, pay lower monthly premiums.
Disadvantage: Nothing to claim on tax.
Example
A family who take out health insurance have a monthly premium of $250 ($3000 per year). The eldest person on the policy is 42, the rebate therefore is 30%. They elect to claim their rebate as a reduced monthly premium, so their actual monthly payment is $175 (or $2100 for the year).
2. Claim the rebate as part of your tax return
To claim the rebate this way requires you to pay the higher - or unrebated - premium.
At the end of financial year your health fund will provide you with a Private Health Insurance Statement. If section 'G' is an amount greater than '0' you claim the amount shown as your rebate. You are required to submit your health insurance statement with your tax return.
Advantage: Lump sum payment on top of your tax return.
Disadvantage: Higher monthly premiums. No interest earnt on your money.
Example
A family who take out health insurance have a monthly premium of $250 ($3000 per year). The eldest person on the policy is 42, the rebate therefore is 30%. They decide to claim the rebate at tax time, would pay their monthly premium of $250 ($3000 for the year), then receive an extra $900 on their tax return come tax time.
- How to claim the rebate on tax
3. Claim the rebate from a Medicare office
Direct payment is available through Medicare offices as a lump sum or as periodic payments. If, for example, your premiums are debited monthly you can apply each month after the debit occurs, or save them and claim the rebate every 3 months. Just take your account statement and photo ID and complete the Medicare Rebate Form.
Advantage: Cash back in your hand.
Disadvantage: Higher monthly premiums, a lot of paperwork every time you want to claim.
Example
A family who take out health insurance have a monthly premium of $250 ($3000 per year). The eldest person on the policy is 42, the rebate therefore is 30%. They decide to claim the rebate through Medicare, would pay their monthly premium of $250 ($3000 for the year), then claim $225 per quarter ($900 for the year).
