If you have a taxable income of less than $140,000 (as a single) or $280,000 (as a family), you could be eligible to save on your private hospital cover premiums. Read on to discover if you can qualify for the rebate, how much you could save, and how to claim.
Please note, the information in this article and the links provided are for general information only. They’re not intended to provide, and should not be relied on for, tax, legal or accounting advice.
The Private Health Insurance Rebate is an amount the government contributes towards the cost of your private hospital health insurance premiums. The scheme is income-tested, so the rebate you can claim depends on how much you earn each year.
It also factors your single or family status, how many children you may have, and your age. Generally, the less you make, the more that the Australian Government will pitch in to help foot your health insurance bill. However, it’s important to remember that if your taxable income is over $140,000 as a single or $280,000 as a couple (or family), you’re not eligible for the rebate.
There are a number of reasons why the Private Health Insurance Rebate was introduced in Australia. First and foremost, it helps everyday Australians afford private health cover. It also helps make the private health industry more sustainable by attracting more members.
Finally, the rebate and health insurance in Australia work to take the pressure off the public healthcare system. For example, by limiting the number of people needing to use public hospitals, and reducing long waiting times.
Whether you can claim the Private Health Insurance Rebate depends on how much your taxable income is each financial year. If you’re single with a taxable income under $90,000 a year, or a family under $180,000 a year, you fall under the base tier category and qualify for the full rebate.
If you have a taxable income over $90,000, but up to $140,000 a year as a single, or over $190,000 but under $280,000 as a family - you will fall under tier 1 or 2 and qualify for a reduced rebate rate. Your rebate, whether full or reduced, will also depend on your age. For example, the older you are the more rebate you receive.
|Base Tier||Tier 1||Tier 2||Tier 3|
|< age 65||25.059%||16.706%||8.352%||0%|
|Source: Australian Government Private Health Website1. The rebate levels applicable from 1 April 2019 to 31 March 2021.|
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. If you’re a single parent family or a couple (including de facto relationships), you’ll be treated as a family for Private Health Insurance Rebate purposes.
When you claim your rebate, you’ll be asked to nominate your estimated income tier for the financial year. 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.
If you make more at the end of the year than your chosen tier, you’ll have to refund the amount that you incorrectly received through the rebate with your tax return. There are no other consequences for incorrect estimates.
To qualify for the private health insurance rebate, you need to meet a number of conditions. This includes having a taxable income of less than $140,000 as a single, or $280,000 as a family (unless you have two or more children, in which case your threshold goes up by $1,500 for every dependent child after the first).
Additionally, you must be an Australian citizen or permanent resident and have a Medicare card. Finally, you must have a complying health insurance policy with an Australian-registered health insurer.
You can claim the Private Health Insurance Rebate in one of two simple ways. You can get it upfront as a discount on your premiums, or you can claim it through your tax return to the ATO. If you choose to get it as a discount on your premiums, you’ll need to fill out the Medicare Rebate Claim Form, and give your health insurance fund your estimated income.
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