The Australian Government Rebate on private health insurance provides a reduction in the premium cost of private healthcare. It is recognition by the Australian Government that Australians with private healthcare are making a substantial financial contribution not only to their own healthcare but also to Australia’s healthcare system.
It also recognises the fact that private healthcare users take pressure off the public system, especially with respect to public hospitals.
How is it calculated?
The Government’s rebate on private health insurance is currently adjusted annually on 1 April based on the Rebate Adjustment Factor which takes into account growth in the Consumer Price Index and the industry weighted average premium increase.
The Rebate Adjustment Factor for 2024 has been calculated as 1. This means that this year, the Australian Government’s rebate on private health insurance will remain the same from 1 April 2024 to 31 March 2025. The industry weighted average premium increase for 2024 is 3.03 per cent.
The private health insurance rebate is income tested and applies to hospital, general treatment and ambulance policies. It does not apply to overseas visitors cover. The Lifetime Health Cover component of a premium is not eligible for the Australian Government Rebate on private health insurance.
The table below details the different rebate amounts and Medicare Levy Surcharge levels.
The income thresholds below apply for the 2023-24 financial year until 30 June 2024.
| Singles | $93,000 or less | $93,001 – $108,000 | $108,001 – $144,000 | $144,001 or more |
|---|---|---|---|---|
| Couples/ Families |
$186,000 or less | $186,001 – $216,000 | $216,001 – $288,000 | $288,001 or more |
Private Health Insurance Rebate effective from 1 April 2024 to 31 March 2025 |
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| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
| Less than 65 years | 24.608% | 16.405% | 8.202% | 0% |
| 65-69 years | 28.710% | 20.507% | 12.303% | 0% |
| 70 years+ | 32.812% | 24.608% | 16.405% | 0% |
Medicare Levy Surcharge |
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| All ages | 0.0% | 1.0% | 1.25% | 1.5% |
Note: The rebate levels are adjusted annually on 1 April based on the Rebate Adjustment Factor. It is calculated in accordance with the Private Health Insurance (Incentives) Rules 2012 (No. 2).
Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the income thresholds are increased by $1,500 for each child after the first.
The income thresholds are effective 1 July 2014 and are indexed annually. The income thresholds remained the same from 1 July 2015 to 30 June 2023 (Pausing indexation of the Medicare Levy Surcharge and Private Health Insurance Rebate Thresholds – extension)
- For the thresholds applicable from 2010-11 to 2022-23, go to the ATO website.
Still have questions, please refer to our FAQs about the Australian Government’s Private Health Insurance Rebate.