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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
Laura Crowden
Reviewed by
Andres GutierrezCompare Health Insurance Policies
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What is the private health insurance rebate?
Long story short
If you’re eligible, the private health insurance rebate could see you save up to 32% on your premiums
The percentages depends on the rebate tier you qualify for.
You might be eligible if you hold appropriate health insurance and 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.
Your age, income, and family status help decide your rebate amount
Older people with lower incomes have the highest rebate percentage.
The private health insurance rebate is a government scheme to help you pay for private health insurance. If you have a taxable income of $158,000 or less (as a single) or $316,000 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 should not be relied on, for tax, legal, or accounting advice.
In 2025, more than 9 in 10 iSelect health insurance comparison customers told us they claimed a government rebate on their premiums, with the majority (68%) claiming for the highest level rebate.1Based on iSelect health insurance comparisons made 1 January– 31 December 2025, including non-sales comparisons and assuming all comparisons were made by unique individuals.
What is the private health insurance rebate?
The private health insurance rebate is a sum the government contributes towards the cost of your private health insurance premiums. 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 2025–26, if your taxable income is over $158,000 as a single person or $316,000 as a couple or family, you’re not eligible for the Australian Government rebate. If you earn anything under this, you’ve completed part one of the eligibility puzzle!
It 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.
Andres Gutierrez
General Manager – Health
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. It also helps 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 in the private system means fewer people needing to use public hospitals, which reduces long waiting times.
What kind of rebate can I get?
If your income falls in the base tier, you could receive a rebate of 24%, 28%, or 32%, depending on your age. It’s your taxable income and your age that determines your rebate.
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 $118,001 to $158,000. If you earn $158,001 or more, you earn too much to be in tier 2 and will have a lower rebate percentage. If you earn $118,000 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 Medicare Levy Surcharge dependent child after your first. If you’re a single-parent family or a couple without kids, you count as family for private health insurance rebate purposes.
The table below shows the income thresholds, tiers, and corresponding rebates.
| 2025–2026 income thresholds | ||||
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
| Singles | ≤$101,000 | $101,001–$118,000 | $118,001–$158,000 | ≥$158,001 |
| Families | ≤$202,000 | $202,001–$236,000 | $236,001–$316,000 | ≥$316,001 |
| Rebate percentage (as of 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% |
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 $158,000 or less as a single person, or $316,000 or less as a family (unless you have two or more children, in which case your threshold goes up by $1,500 for each Medicare Levy Surcharge 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 tax return to the Australian Taxation Office.
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.
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 fall into tier 3 and either earn too much (i.e. over $316,000 for couples or families) to receive a rebate, or opted out of claiming any rebate as a reduction on their premiums.2Based on iSelect health insurance comparisons, January–December 2024
Singles were only a little more likely to claim the base tier than families (65% compared to 61%), while families were slightly more likely to claim a tier 1 rebate (18% compared to 12%). For both singles and families, only about one in 10 said they nominated a tier 2 or tier 3 rebate.
The table below shows what percentage of iSelect customers were claiming which rebate tier in 2025.
| Base tier | Tier 1 | Tier 2 | Tier 3 | |
| Total | 68% | 14% | 11% | 7% |
| Singles | 65% | 12% | 12% | 11% |
| Families | 61% | 18% | 11% | 10% |
Source: Based on iSelect health insurance comparisons made 1 January– 31 December 2025, including non-sales comparisons and assuming all comparisons were made by unique individuals.
Frequently asked questions
How does the private health insurance rebate impact Lifetime Health Cover loading?
If you’re eligible for the private health insurance rebate and have Lifetime Health Cover (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 $397.95.
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 pay back the difference in your rebate via your tax return. There are no other consequences for guessing wrong.
When should I update my 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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Health Insurance & Tax
Tax Implications on Health Insurance
The Medicare Levy Surcharge
About the Life Time Health Cover Loading
The Private Health Insurance Benefit Codes
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