Published June 3, 2026
Private Health Insurance Rebate is an amount of money that the Federal Government could pay as a contribution towards your health insurance premium costs. This covers your premium for hospital cover, extra cover, and hospital and extra cover together. It is income tested; hence, if you earn a higher salary, your rebate would be lowered, and you may even not get any rebate at all.
The Private Health Insurance Rebate was introduced by the Federal Government in 1999 as part of its effort to motivate more Australians to subscribe to private health cover to ease the burden on the public health care system.
Who qualifies for the private health insurance rebate?
- Eligible for Medicare
- Holder of an Australian-registered private health insurance plan that meets the requirements for compliance with the private health insurance rebates program (which you may verify with your insurance company)
- Income level, for surcharge purposes, must be less than the Tier 3 income threshold level. The Tier 3 income threshold level in the income year 2025-26 is $158,001 as an individual, or $316,001 for families.
- Private health insurance incentive recipient (individuals who hold a compliant private health insurance plan and, if the policy only applies to children, parents).
What is the amount of the private health insurance rebate?
As of today, the amount of the private health insurance rebate will vary between 8.095% and 32.385%, based on your age, personal income, and marital status. In general, the more you earn the lower your rebate amount will be. Likewise, individuals at their later stages in life tend to receive higher rebates.
Please refer to the following chart to calculate your rebate based on income levels for singles and families, noting that single-parent families, and couples are considered families for this purpose. The ATO indicates that for families with children, income thresholds increase by $1,500 for each additional dependent child other than the first one.
The rebate refers to the proportion of the amount that will be provided by the government as contributions toward your health insurance premiums. Should you be in a family or a couple, the rebate will be calculated depending on the age of the oldest individual within the health insurance plan.
2025–26 Medicare Levy Surcharge (MLS) Thresholds
| Income Category | Base Tier (0% Tax) | Tier 1 (1.0% Tax) | Tier 2 (1.25% Tax) | Tier 3 (1.5% Tax) |
|---|---|---|---|---|
| Individual / Single | $101,000 or less | $101,001 – $118,000 | $118,001 – $158,000 | $158,001 or more |
| Couples & Families | $202,000 or less | $202,001 – $236,000 | $236,001 – $316,000 | $316,001 or more |
Data provided by the ATO.
2025–26 Private Health Insurance Rebate Rates
(For policies where the oldest person is under 65 years of age)
| Income Tier | Single Income | Family Income | Rebate (1 Jul 2025 – 31 Mar 2026) | Rebate (1 Apr 2026 – 30 Jun 2026) |
|---|---|---|---|---|
| Base Tier | $101,000 or less | $202,000 or less | 24.288% | 24.118% |
| Tier 1 | $101,001 – $118,000 | $202,001 – $236,000 | 16.192% | 16.079% |
| Tier 2 | $118,001 – $158,000 | $236,001 – $316,000 | 8.095% | 8.038% |
| Tier 3 | $158,001 or more | $316,001 or more | 0% (Not eligible) | 0% (Not eligible) |
Data provided by the ATO.
When should you update your rebate tier?
Based on the tables above, there are three things that primarily influence your tier, including your income level, whether you are married or have a family, and your age.
When changes that affect your tier include:
- An increase or decrease in your salary/earnings and work hours
- Getting married, separating, or divorce
- Birth of more children, since it boosts your income level by $1,500 each after the first
- Age 65 years or 70 years due to its relevance to your rebate tier
How do you claim your private health insurance rebate?
There are two methods of claiming the private health insurance rebate according to the ATO:
- As an offset in your tax return annually
- As a deduction in the amount of premium that you pay using your private health cover
In case you claim your private health insurance rebate as a lump sum in your tax return, the ATO advises that they would automatically apply the right amount of rebate on inputting your information from the private health insurance tax statement to your annual tax return.
However, should you wish to claim a rebate immediately and have it deducted from the premiums paid using your private health insurance cover, you must contact your health insurer and indicate to them the type of rebate you qualify for. Your selection of the rebate tier could be achieved by contacting your health insurer or completing the private health insurance rebate claim form and submitting it to them.
How does the private health insurance rebate affect the LHC loading?
Under the lifetime health cover (LHC) scheme, you must obtain sufficient private hospital cover by 1 July after turning 31. If not, a penalty of 2% loading per annum applies to all future premiums that you pay for your hospital cover as long as you are older than 30 years of age. This means that if you delay taking out an adequate private hospital cover by a certain period, the penalty will continue to grow each year until it reaches a maximum of 70%. However, the LHC loading is waived once you have held the required hospital cover for at least ten consecutive years.
The Australian Taxation Office advises that if you’re paying for LHC loading, then the private health insurance rebate cannot be applied toward this component of your hospital cover premiums.
Understanding your Private Health Insurance Rebate Tier can help you maximise savings on your health cover. For more comparison guides and money-saving tips, trust Compare Today and follow us on Facebook.