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A simple guide to the private health insurance rebate
A simple guide to the private health insurance rebate
Written by
Madeline Pettet
Edited by
Ellie Garran
Reviewed by
Andres GutierrezCompare Health Insurance Policies
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What is the private health insurance rebate?
Long story short
The rebate could see you save up to 32% on your premiums
The percentage depends on the private health insurance rebate tier you qualify for.
You might be eligible if you earn under a certain amount
You’ll also need to be an Australian citizen or permanent resident able to access Medicare. Lots of Aussies qualify for a rebate.
Your age also helps decide your rebate amount
People aged over 70 with incomes under the base tier threshold have the highest rebate percentage of 32.158%.
The private health insurance rebate is a government scheme to help you pay for private health insurance. If you have a taxable income of $164,000 or less (as a single) or $328,000 or less (as a couple or family), you could be eligible to save on your health insurance premium.
FYI: the information in this article and the links provided are for general information only. They’re not intended to provide and shouldn’t be relied on for tax, legal or accounting advice.
In 2025, more than 9 in 10 people comparing health insurance through iSelect told us they claimed a government rebate on their premiums, with the majority (68%) claiming the highest level of rebate.1Note: These figures reflect iSelect health insurance comparisons, including non-sales comparisons and assume all comparisons were made by unique individuals. Based on data from 1 January – 31 December 2025.
What is the private health insurance rebate?
The private health insurance rebate is a sum the Federal Government contributes towards the cost of your private health insurance premiums. The remaining premium needs to be paid out-of-pocket by you. The maximum rebate for most of the 2026–27 financial year is 32.158%.
The scheme is income tested, so the rebate you could claim depends on how much you earn each year. Generally, the less you make, the more the Australian Government will pitch in to help foot your private health insurance bill.
For 2026–27, if your taxable income is over $164,000 as a single person or $328,000 as a couple or family, you’re not eligible for the Australian Government rebate. If you earn anything under this, you could be eligible.
Your rebate rate also factors in your single, couple or family status; how many children you have; and your age. These translate to the private health insurance benefit code and tax claim codes on your tax return.
Helpful tip
If you are eligible for the private health insurance rebate, it’s not compulsory to claim the rebate against your insurance premiums. Some people choose not to claim it, and instead pay their premiums in full and then enjoy receiving their rebate as a lump sum at tax time.
Dr. Jill Gamberg
GP, Coach, and Lifestyle Medicine Physician
Why is there a private health insurance rebate?
The private health insurance rebate was introduced in Australia to help everyday Australians with the cost of private health insurance and make the private health industry more sustainable by attracting more members.
By attracting more members, the rebate works to take the pressure off the public healthcare system. More people using private hospital cover to access the private health system means fewer people needing to use public hospitals, which reduces long waiting times.
What kind of rebate can I get?
Your taxable income and your age determines your rebate entitlement. If your income falls in the base tier ($105,000 or less for singles and $210,000 or less for families), you could receive a private health insurance rebate of 24%, 28% or 32%, depending on your age.
Your income is assessed as either single or family, with different thresholds determining which rebate tier you fall into (base, tier 1, tier 2 or tier 3). For instance, the tier 2 threshold range for a single person is $123,001 to $164,000. If you earn $164,001 or more, you earn too much to be in tier 2 and will have a lower rebate percentage. If you earn $123,000 or less, you’ll be in a lower tier and get a higher rebate percentage.
If you’re a single person and don’t have any dependent children, then the single income threshold applies to you.
If you have dependent children or a spouse, then your household income is assessed against the family income threshold. For families with children, the income levels also increase by $1,500 for each dependent child (as defined for the Medicare Levy Surcharge) after your first. If you’re a single-parent family or a married couple without kids, you count as a family for private health insurance rebate purposes.
Private health insurance rebate rates and thresholds for the 2026–27 financial year
| 2026–2027 income thresholds | ||||
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
| Singles | ≤$105,000 | $105,001–$123,000 | $123,001–$164,000 | ≥$164,001 |
| Families | ≤$210,000 | $210,001–$246,000 | $246,001–$328,000 | ≥$328,001 |
| Rebate percentage (1 April 2026 to 31 March 2027) | ||||
| Age <65 | 24.118% | 16.079% | 8.038% | 0% |
| Age 65–69 | 28.139% | 20.098% | 12.058% | 0% |
| Age 70+ | 32.158% | 24.118% | 16.079% | 0% |
Note: These figures reflect indicative private health insurance rebates, based on Australian Government data. Data retrieved June 2026.
Am I eligible for the private health insurance rebate?
To qualify for the private health insurance rebate, you need to have a taxable income of $164,000 or less as a single person or $328,000 or less as a family. If you have two or more children, your family income threshold goes up by $1,500 for each dependent child after the first.
You also need to be an adult Australian citizen or permanent resident and be eligible for Medicare.
Finally, you must have a complying private health insurance policy with an Australian-registered health insurer. This can be hospital cover, extras cover or even both!
How can I claim the private health insurance rebate?
You can claim the private health insurance rebate up-front as a premium reduction, or you can claim it through your annual tax return to the ATO.
If you choose to get it as a reduction on your premiums, you may need to fill out the Medicare rebate claim form and tell your health insurance fund which income tier you think you’ll fall into.
Do most Aussies get the private health insurance rebate?
According to 2025 iSelect customer data, 93% of Australians with private health insurance opted to claim the government rebate, with most nominating the base tier. Only 7% of iSelect customers told us they either fall into tier 3 and earn too much (i.e. over $328,000 for couples or families) to receive a rebate, or they otherwise opted out of claiming any rebate as a reduction on their premiums.
Singles were only a little more likely to fall into the base tier than families (65% compared to 61%), while families were slightly more likely to fall into tier 1 (18% compared to 12%). For both singles and families, only about one in 10 said they nominated a tier 2 or tier 3 rebate.
iSelect customers and their nominated private health insurance rebate tier
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
| Total | 68% | 14% | 11% | 7% |
| Singles | 65% | 12% | 12% | 11% |
| Families | 61% | 18% | 11% | 10% |
Note: These figures reflect iSelect health insurance comparisons, including non-sales comparisons and assume all comparisons were made by unique individuals. Based on data from 1 January – 31 December 2025.
Frequently asked questions
How does the private health insurance rebate impact Lifetime Health Cover (LHC) loading?
If you’re eligible for the private health insurance rebate and have LHC loading added to your premium, the rebate doesn’t apply to the LHC portion of your premium.
For example, imagine you’re eligible for a base tier rebate of 24.118% on your annual hospital insurance premium. Your premium starts as $1,500 but your LHC loading of 10% increases your premium to $1,650. You would only receive a rebate of $361.77, rather than $400.75.
What happens if I nominate the wrong private health insurance rebate tier?
If you earn less at the end of the financial year than the tier you nominated, you’ll get a tax offset with your tax return, but if your income exceeds your nominated tier, you’ll have to pay back the difference in your rebate via the ATO and your tax return. There are no other consequences for guessing wrong.
When should I update my private health insurance rebate tier?
Update your rebate tier nomination when your income changes, like after a pay rise; your situation changes, like if you’re newly married or have had a child; and/or you’ve turned 65 or 70.
Keep in mind that the Australian Government usually adjusts the income thresholds for each tier on 1 July. This could change your rebate tier even if your circumstances haven’t.
Where can I find and compare health insurance?
If all this talk about rebates and savings has you champing at the bit to sign up for health insurance, then you might be ready to get comparing policies. After all, comparing can help you find something that balances the coverage you want with value for money.
Handily, iSelect can help you out here. You can easily and quickly compare a range of policies from different health funds to see which one works for you using our online comparison tool, or by speaking with one of our health comparison experts on 1800 784 772.
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The Private Health Insurance Benefit Codes
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