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Guide to the 2023 Private Health Insurance Rebate

Megan Fraser Fact Checked Updated: 24 November 2023
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Do you have health insurance? You may be eligible for the Australian Government Rebate to help pay your premiums. The rebate amount is calculated based on your income, age and family status, and it’s adjusted annually on 1 April. 

To find out more about the rebate and how it could help you, read our Guide to the 2022 Private Health Insurance Rebate. This article is packed with information about who is eligible for the rebate and how to claim it. Plus, we answer some of the most common questions people have about private health insurance rebates.

What is the private health insurance rebate?

Private health insurance rebates are a great way to save money on your premiums. The Private Health Insurance Rebate (PHI RB) is an amount the government contributes towards the cost of private hospital cover, which can be income tested so it’s tailored just for you.

The Australian Government offers a health insurance rebate worth up to 10% on your premiums if you are an individual or family earning less than $140,000 per year. The percentage decreases as taxable income increases, making this offer more valuable for those with lower salaries who need help paying their monthly bills. However, if your taxable income is over $280,000, then you won’t receive a rebate since the amount is higher than what the eligible amount received in benefits

Health insurance rebate 2022 01

Why is there a government rebate on private health insurance?

The Private Health Insurance Rebate was introduced in Australia for one reason — to help everyday Australians afford private health cover. It also helps make the industry more sustainable by attracting new members with its rebates, which are available on all policies regardless of age or gender. The Australian healthcare system is designed in such a way that it takes the pressure off public hospitals. For example, by limiting how many people need to use them and reducing long waiting times for treatment.

What are health insurance tax rebate income tiers?

The Private Health Insurance Rebate is just for people who make less than $90,000 or families with an income under $180,000. If you fall in this category, then it’s possible that your tax credits will be refunded and can go towards paying off next year’s premiums.

Tier 1 is for people with higher incomes and tier 2 has a lower limit. If you’re single, over age 50 or qualify as elderly, then your rebate rate will depend on what type of tax return that falls into full (for everyone) or reduced (eligible taxpayers who do not meet all requirements but still want some assistance).

Below is a table showcasing the rebate amount received in percentages depending on age

AgeBase TierTier 1Tier 2Tier 3

Source: Private Health (May 2023)

How does having a family impact the Australian government rebate

The threshold for single parents and couples with children is increased by $1,500 per child after the first. If you’re a parent in this situation—whether married or not—you’ll be treated as though your family were covered under Private Health Insurance Rebate rules when it comes time to apply. Remember that the $1,500 is provided for each child. If you have a family health insurance policy which covers two adults and two children, you stand to receive $3,000 back in rebates for your private health insurance. 

How do you calculate your rebate tier?

The easiest way to determine your rebate tier is by looking at the tax form that you or someone in your family filed with their annual taxable income. It will show which refundable taxes apply based on what they were earning during this time period, and it can help ensure eligibility for any rebates offered. 

The Australian Taxation Office will make any necessary adjustments to your tax return if you aren’t sure which tier is correct. You can also consult a professional adviser for guidance.

How much is your rebate entitlement

Your rebate amount depends on your age and taxable income. The less you earn, the greater your refund. The rebate is adjusted on 1 April annually, so be sure to review the rebate amount and regulations before applying to make sure you remain eligible.

Tax TiersBase123

Source: Private Health (May 2023)

health insurance composition

How to claim the rebate

You can claim the Private Health Insurance Rebate in one of two simple ways. You get it upfront as a discount on your premiums, or through submitting an official tax return to ATO — if you choose this option make sure that all details are correct and estimated income is submitted with claim form. 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.

Below are the different ways to claim your rebate:

Lump sum payment

You also have the option to claim your refund through your annual tax return from the Australian Taxation Office where you can receive the money in your account. For this claim, you need to obtain your statement from your health insurer at the end of the financial year, complete your tax return, and submit your forms to the Australian Taxation Office.

Discount on your private health insurance premiums

When you receive your tax return as a rebate on private health insurance premiums, it means that for the year ahead of time and money will not need to be paid out. The rebate amount will be paid directly into your health fund and you will only have to cover the cost that is leftover. To do this, you have to register for the upfront reduction with your private health insurer, complete the application to receive the Australian Government Rebate on Private Health Insurance as a reduced premium form, and return it to your insurer.

The rebate and Lifetime Health Cover

Lifetime Health Cover loading is a government initiative to encourage more people to take out private health insurance. If you don’t have an appropriate private health insurance policy in place before the 30th of June following your 31st birthday and choose to take up cover later, there could be some extra charges due as part if their Lifetime Health Cover (LHC) loading which forces people onto higher-tier plans with more expensive premiums or surcharges at maximum rate 70%.

If you are currently paying an LHC loading, your rebate will not be applied to the LHC part or your private health insurance premium.

Frequently Asked Questions and Answers

  • When does the level of rebate for private health insurance change?

    Generally, the Private health insurance tax rebate is adjusted annually on the 1st of April. This figure will be adjusted annually by the rebate adjustment factor as a percentage of the Consumer Price Index (CPI) increases, and the average annual premium increase.
  • Do you get more tax back if you have private health?

    By taking out an eligible policy, you could save on your taxes. By avoiding the LHC and Medicare Levy Surcharge (MLS), not only will this help trim down what would have been owed in tax but also get a refund or discount when purchasing premiums from insurance providers. You’ll also be able to get up 1-1/2% in savings, as well! Plus you may qualify for a tax refund or discount at renewal time that can help make things even cheaper than they were before
  • Am I eligible for Australian government rebate on private health insurance?

    Private Health Insurance Rebates are available to those who qualify, depending on your taxable income. If you have a single person with less than $90,000 or family under $180,000 in earnings each year then they can get the full rebate. Tier 1 and 2 tax rebates are available to help you save on your federal income taxes. If the amount of money that will go into a particular account each year is at or over $90,000 as single filers or up until $140,000, then they qualify for reduced rates which can still offer some savings even if it’s only 5%. This benefit depends entirely upon one’s age; since older individuals earning less per month receive more back from this programme.
  • Do you get more tax back if you have private health?

    Private health insurance rebates are available in Australia to help cover the cost of your premiums, and you could get up 33% back on those payments! In order for this benefit though- a qualification criteria must first be met. You need proof that shows how much income or family structure has been earned during annual periods relevant with respect to the application process at hand (for example: tax returns). The Australian Government does provide some assistance through their private healthcare rebate which pays out around 36% of premium charges
  • Is it worth having private health?

    Yes, it can definitely be worth having private health insurance for a number of reasons. First and foremost, when you purchase private health insurance, you are protecting yourself and your loved ones from heft medical costs, including emergency ambulance services. Secondly, no matter what policy you take out, even if it is the most basic coverage, you no longer have to pay either the Medicare Levy Surcharge or the Lifetime Cover Loading fee, which saves you money in the long run. Finally, if you fall within the criteria, you may be eligible to receive a government rebate, which means you receive cash back.

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