Private Health Insurance
The Australian Government offers a rebate on private health insurance to make cover more affordable. The rebate reduces the cost of your hospital and extras premiums, either upfront through your insurer or as a tax offset at the end of the year.
What is the Private Health Insurance Rebate?
The rebate is a government contribution towards the cost of your private health insurance premiums. It’s available to most Australians with an eligible hospital, extras, or combined policy. The rebate is income- and age-based, meaning the percentage you receive depends on your household income and your age.
Why Does the Government Offer a Rebate?
The rebate was introduced to encourage Australians to take out private health insurance. By subsidising premiums, the government helps:
- Make private cover more affordable
- Reduce pressure on the public health system
- Support people in managing the cost of healthcare
Private Health Insurance Rebate Tiers (2025–26)
The new thresholds apply 1 July 2025 – 31 March 2026. Family thresholds increase by $1,500 for each dependent child after the first.
| Income Tier | Singles Income | Families Income | <65 | 65–69 | 70+ |
|---|---|---|---|---|---|
| Base Tier | ≤ $101,000 | ≤ $202,000 | 24.288% | 28.337% | 32.385% |
| Tier 1 | $101,001–$118,000 | $202,001–$236,000 | 16.192% | 20.240% | 24.288% |
| Tier 2 | $118,001–$158,000 | $236,001–$316,000 | 8.095% | 12.143% | 16.192% |
| Tier 3 | ≥ $158,001 | ≥ $316,001 | 0% | 0% | 0% |
Premiums as of April 2026
How is the Rebate Calculated?
The rebate is applied as a percentage of your premium. For example:
| Person | Income | Tier & Rate | Premium | Savings |
|---|---|---|---|---|
|
EmmaAge 34
|
$90,000 | Base Tier: 24.288% | $3,000 annual | ~$728 |
|
Peter and SarahAge 67
|
$210,000 (Combined) | Tier 1: 20.240% | $6,000 family | ~$1,214 |
|
AlanAge 72
|
$165,000 | Tier 3: 0% | Any premium | No rebate |
Premiums as of April 2026
How to Claim the Rebate
You can claim the rebate in two ways:
- Reduced premiums upfront – most people choose this option, and the insurer applies the rebate automatically.
- Tax offset at the end of the year – you pay full price during the year, then claim the rebate when you lodge your tax return.
Why the Rebate Matters
The rebate can reduce your premium by hundreds each year, making health cover more affordable. It also works alongside the Medicare Levy Surcharge and Lifetime Health Cover loading to encourage Australians to take out cover earlier.
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