A Simple Guide to the Private Health Insurance Rebate

Want some money back on your Health Insurance premiums? Nah, us either. Just kidding, we’ll totally take the money.

The Private Health Insurance Rebate is a government scheme to help you pay for private Health Insurance. If you have a taxable income of $144,000 or less (as a single) or $288,000 or less (as a couple or family), you could be eligible to save on your health insurance premium.² Read on to discover whether you qualify for the rebate, how much you could possibly 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.

What is the Private Health Insurance Rebate?

The Private Health Insurance Rebate is a sum the government contributes towards the cost of your Health Insurance premiums. The scheme is income tested, so the rebate you could claim depends on how much you earn each year.

It also factors your single, couple or family status, how many children you have, and your age. Generally, the less you make, the more the Australian Government will pitch in to help foot your Health Insurance bill. If your taxable income is over $144,000 as a single person or $288,000 as a couple or family, you’re not eligible for the rebate.³

Why is there a Private Health Insurance Rebate?

There are a few reasons why the Private Health Insurance Rebate was introduced in Australia. First and foremost, it helps everyday Australians afford Private Health Cover.⁴ It also helps make the private health industry more sustainable by attracting more members.

By attracting more members, the rebate also works to take the pressure off the public healthcare system. More people in the private system means fewer people needing to use public hospitals, which reduces long waiting times.

What kind of rebate can I get?

Whether you can claim the Private Health Insurance rebate depends on how much taxable income you receive each financial year.

Your income will be assessed in one of two ways. If you’re a single person and don’t have any dependent children, then your income will be assessed against the single income threshold.⁵ If you have dependent children or a spouse, then your household income will be assessed against the family threshold.⁶
 
Now, how much of a rebate you’ll get back depends on which income tier you fall into. The lower your tier, the higher your rebate. For 2023/2024, income thresholds are divided into the following tiers and correspond to the following rebates:

As you can see, your rebate amount will also depend on your age (or the age of the oldest person in your immediate family). For families with children, the thresholds also increase by $1,500 for each Medicare Levy Surcharge dependent child after the first.⁹ If you’re a single-parent family or a couple, you’ll be treated as a family for Private Health Insurance Rebate purposes.

What happens if I nominate the wrong tier?

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 your income ends up exceeding your nominated tier, you’ll have to refund the difference in rebate with your tax return. There are no other consequences for guessing wrong.¹⁰

Am I eligible for the Private Health Insurance Rebate?

To qualify for the Private Health Insurance Rebate, you need to meet a few conditions. These include having a taxable income of $144,000 or less as a single person or $288,000 or less as a family (unless you have two or more children, in which case your threshold goes up by $1,500 for every Medicare Levy Surcharge dependent child after the first).¹¹

You also need to be an Australian citizen or permanent resident and be eligible for Medicare. Finally, you must have a complying Health Insurance Policy with an Australian-registered health insurer.¹²

How can I claim the Private Health Insurance Rebate?

You can claim the Private Health Insurance Rebate in one of two simple ways. You can get it up-front as a reduction on your premiums, or you can claim it through your tax return to the ATO.¹³ If you choose to get it as a reduction on your premiums, you’ll need to fill out the Medicare Rebate claim form and tell your Health Insurance Fund which income tier you think you’ll fall into.¹⁴

Where can I find and compare Health Insurance?

If all this talk about rebates and savings has you chomping at the bit to sign up for Health Insurance, then you might be ready to compare the different Health Insurance Plans that are on offer. You might just be able to find something with the coverage you want at a very competitive price!

iSelect can help you out here. You can compare a range of plans from different insurers* to see which one works for you or give us a call on 1800 784 772. It’s quick and easy, so why not give it a try?

^{Sources:
1 PrivateHealth.gov.au - Australian Government Private Health Insurance Rebate
2 As above
3 As above
4 PrivateHealth.gov.au – Australian Government Private Health Insurance Rebate
5 Australian Government | Australian Taxation Office – Income thresholds and rates for the private health insurance rebate
6 As above
7 As above
8 Department of Health and Aged Care –  PHI 10/23 Private health insurance rebate adjustment factor effective 1 April 2023
9 As above
10 PrivateHealth.gov.au – Australian Government Private Health Insurance Rebate
11 Australian Government | Australian Taxation Office – Income thresholds and rates for the private health insurance rebate
12 Australian Government | Australian Taxation Office – Private Health Insurance Rebate Eligibility
13 PrivateHealth.gov.au – Australian Government Private Health Insurance Rebate
14 As above}