Private Health Insurance Tax Rebate: Frequently Asked Questions

Below are the frequently asked questions or FAQs that will help you better understand your private health insurance rebate.

mediclaim FAQ

How is eligibility decided for the private health insurance rebate?

For someone to claim private health insurance rebate, they:

  • should be eligible for Medicare;
  • be the holder of a complying health insurance product (CHIP) that is responsible for hospitalization, routine checkups (also known as ancillary or extras) cover or both; and
  • Medicare should be able to levy surcharges on the income and should be below Tier 3 as shown in the table below.

How do I calculate my private health insurance rebate?

This is one of the commonly asked questions for someone to know what their rebate is going to look like. The Australian Government gives out an income-based rebate to aid people in procuring private health insurance. The factors that decide your eligibility for rebate are your income tier and family size.

For the period of 1 July 2015 to 1 July 2018 the rebate rates will be calculated based on the following income tiers:

Base Tier Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001 – 105,000 $105,001 – 140,000 $140,001 +
Families $180,000 or less $180,001 – 210,000 $210,001 – 280,000 $280,001 +

Note: This also applies to single-parent families and to de facto couples. For families with kids, the limits are increased by $1500 for every subsequent child following the first.

How do I claim the rebate?

This can be done in two ways:

  1. Reduction in the premium by your private health insurer

This simply means that you will need to pay less outright. For those who wish to reduce their premium but will earn more than the Base Tier income threshold, you will need to inform your private health insurer regarding the nominated tier. This will help your provider adjust the rebate so that you don’t fall into the tax deductible bracket.

  1. Claim the tax offset in your annual return

This means that you can simply claim the money as a rebate in your tax return when filing for your taxes. You are not required to choose a tier for this.

For any other health insurance FAQs and claiming a rebate, visit the ATO website or call 132 861.

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