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How to Claim Private Health Insurance Rebate?

4 min read

To encourage Australians to take out private health insurance, the government offers most people a rebate on their premiums, which increases the affordability of private health insurance for all but the highest earners. Different levels of rebate are available depending on your taxable income and , broadly speaking, the more you earn, the lower the rebate. The rebate cuts out altogether if your income exceeds $140,000 (individuals) or $280,000 (families).

WHAT ARE THE REBATE RATES?

 The rebate applies to hospital, general treatment and ambulance policies and the current rebate rates from 1 April 2019 to 31 March 2021 are:

Single

Families

$90,000 or less

$180,000 or less

$90,001 - $105,000

$180,001 - $210,000

$105,001 - $140,000

$210,000 - $280,000

$140,001 or more

$280,001 or more

 

Base Tier

Tier 1

Tier2

Tier 3

< age 65

25.059%

16.706%

8.352%

0%

Age 65-69

29.236%

20.883%

12.529%

0%

Age 70+

33.413%

25.059%

16.706%

0%

Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

The rebate does not cover the Lifetime Health Cover loading element of your premiums.

Claiming the rebate

If you are eligible for the rebate, there are two ways you can claim:

  • through a reduced premium; or
  • through your tax return at the end of the financial year.

If you choose to receive your rebate through your insurer, you will be asked to nominate the tier you expect to fall into based on your estimated income. 

GET EXPERT HELP

If you nominate the wrong tier and this results in a lower rebate than you are entitled to, you will receive a tax offset through your tax return at the end of the financial year, which might result in a bigger tax refund.

If you get it wrong and nominate a tier that gives you a higher rebate than you are entitled to, you will incur a tax liability when you lodge your tax return at the end of the financial year. This means you could end up owing tax to the ATO or receive a smaller refund than you might have expected.

Your private health insurer will give you a statement by 15 July after the end of the financial year outlining your premiums and rebate. You can use this information to help you complete the relevant parts of your tax return.

To get help, speak to one of our experienced tax agents by calling 13 23 25 today or book an appointment at your nearest office.

 

How-to Individual Tax
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