Australian Government Private Health Insurance Rebate
Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested. The table below details the different rebate amounts and Medicare Levy Surcharge levels at 1 July 2012.
The rebate applies to hospital, general treatment and ambulance policies. It does not apply to overseas visitors cover.
| Singles Families | <$84,000 <$168,000 | $84,001-97,000 $168,001-194,000 | $97,001-130,000 $194,001-260,000 | >$130,001 >$260,001 |
|---|---|---|---|---|
| < age 65 | 30% | 20% | 10% | 0% |
| Age 65-69 | 35% | 25% | 15% | 0% |
| Age 70+ | 40% | 30% | 20% | 0% |
| All ages | 0.0% | 1.0% | 1.25% | 1.5% |
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.
How can I calculate or estimate my income?
The tiers are based on your income for Medicare levy surcharge purposes. For more information and to use an income calculator visit the income for Medicare levy surcharge page or call the Australian Taxation Office (ATO) on 132 861.
How can I work out my rebate entitlement?
You can use the table above or the Private Health Insurance Rebate Calculator on the ATO website.
Claiming the Rebate
If you are eligible for the rebate, there are three ways you can claim:
- through a reduced premium;
- through your tax return with ATO; or
- via a Medicare office
If you choose to receive your rebate through your insurer or Medicare, you will be asked to nominate the tier you expect to fall into in order to avoid a tax liability. You can nominate your tier by contacting your insurer or by filling out the Medicare rebate claim form.
What happens if I nominate an incorrect tier?
If you choose to claim the rebate as a premium reduction or a payment from Medicare, you will be asked to nominate a tier based on your estimated income.
If you nominate a tier that results in a lower rebate than your income entitles you to, you will receive a tax offset through your tax return at the end of the financial year.
If you nominate a tier that results in a higher rebate than your income entitles you to, you will incur a tax liability through your tax return at the end of the financial year. This means you could have a tax debt. There are no additional penalties for estimating incorrectly.
Your private health insurer will give you a statement at the end of the financial year to help you complete your tax return..
For further information about claiming the rebate please visit the Department of Human Services - Claiming the rebate web page.
More information
The Australian Taxation Office has information at:
http://www.ato.gov.au/privatehealthinsurance
The Department of Health and Ageing has information on the 1 July 2012 changes at:
http://health.gov.au/internet/main/publishing.nsf/Content/fairer-faq
Medicare has information at:
http://www.humanservices.gov.au/customer/services/medicare/australian-government-rebate-on-private-health-insurance