Health Insurance Consultants Australia

Important note: The information provided on this website does not constitute financial advice or tax advice. If you require financial or tax advice about your specific situation, you should contact your financial advisor or a tax expert.

What is the Federal Government Rebate on Private Health Insurance?

The Federal Government Rebate is a subsidy of the cost for hospital and extras covers that are Complying Health Insurance Products.

The rebate is applicable to the cost of private health insurance premiums on hospital cover, extras cover and a combination of both.

The eligibility for a rebate (if any) is determined by the policyholder’s income and age.

What level of rebate am I entitled to?

The level of rebate on a policy is determined by the age of the oldest person covered under the policy and the income of the individual / family. The rebate is applied to the total premium of the policy, and is adjusted by the government annually.

Private Health Insurance Rebate and Medicare Levy Surcharge effective from 1 April 2025 and income thresholds effective 1 July 2025

Source: Australian Tax Office. These thresholds apply to individuals from 1st July 2025. The threshold increases annually based on projected growth in Average Weekly Ordinary Time Earnings (AWOTE). There are specific rules for calculating income for Medicare Levy Surcharge purposes. For more information visit The Australian Tax Office.
Tier	Income	Private Health Insurance Rebate
	Thresholds from 1 July 2025	Below 65 years	65 to 69 years	70 years or over
No tier	Singles - $0 - $101,000	24.288%	28.337%	32.385%
	Families - $0 - $202,000

Tier 1	Singles - $101,001 - $118,000	16.192%	20.240%	24.288%
	Families - $202,001 - $236,000

Tier 2	Singles - $118,001 - $158,000	8.095%	12.143%	16.192%
	Families - $236,001 - $316,000

Tier 3	Singles - $158,001 +	0%	0%	0%
	Families - $316,001 +

NOTE: Families include couples and sole parent families. The family income threshold increases by $1500 for each dependent child after the first.

Previous Rebate Tiers are available here.

How to calculate income for the purposes of determining a rebate tier

The rebate income test uses the same principle as when calculating income for MLS purposes. Income for surcharge purposes includes:

Taxable income (including the net amount on which family trust distribution tax has been paid. Excluding any assessable First Home Super Saver {FHSS} released amount for the income year under the FHSS scheme)
Exempt foreign employment income (if your taxable income is $1 or more)
Reportable fringe benefits amount, as reported on the payment summary
Total net investment loss (includes both net financial investment loss and net rental property loss)
Reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions)
If you have a spouse, and they have not included on their taxable income their share of the net income of a trust where the trustee must pay tax (under section 98 of the Income Tax Assessment Act 1936)
Less -if aged 55-59 years old, any taxed element of a super lump sum (other than a death benefit) received that does not exceed your low rate cap.

For more information, see income test information and calculators on the Australian Tax Office (ATO) website ato.gov.au or call the ATO on 13 28 61.

How to determine if your rebate tier is based on a family or a single

Persons covered	Who is eligible to claim the rebate?	How much are they eligible for?	Who is income tested?
Single adult	Single adult on the policy	Whole rebate	Single adult on the policy with respect to the single tier thresholds.
Single parent family	Single parent on the policy	Whole rebate	Single parent on the policy with respect to the family tier thresholds. The thresholds increase by $1,500 for each child after the first.
Couple/family	Both adults on the policy	Each is entitled to one half of the rebate. Or one member of the couple may elect to receive the benefit on behalf of their spouse.	Both adults on the policy with respect to the family tier thresholds. The thresholds increase by $1,500 for each child after the first.

* Income of dependent children is not included for both family and single parents. Source: Fairer Private Health Insurance Incentives Bill 2011, Explanatory Memorandum.

How do I claim the rebate?

People can choose to receive the rebate in the method that suits them best. They can receive the rebate as:

a premium reduction through their Health Fund, or
a refundable tax rebate in their annual income tax return

The rebate is provided as a percentage of total premiums and therefore keeps pace with any future increases in individual funds or product premiums.