Government Rebate

The Australian Government introduced changes to the Private Health Insurance rebate for high-income earners effective 1 July 2012. These changes were focused on both the rebate entitlements and the Medicare levy surcharge and introduced an age and means testing regime. From 1 April 2014, the Government will limit any increase in the Government Rebate to a Rebate Adjustment Factor.

The new rebate structure will be applied from 1 April 2019 and eligibility for the rebate will continue to be based upon an income and aged based regime. For the 2019/20 tax year:

Base Tier Tier 1 Tier 2 Tier 3
Singles ≤$90,000 $90,001–105,000 $105,001–140,000 ≥$140,001
Families ≤$180,000 $180,001–210,000 $210,001–280,000 ≥$280,001
Age Rebate Rebate Rebate Rebate
Under 65 25.059% 16.706% 8.352% 0.000%
65 to 69 29.236% 20.883% 12.529% 0.000%
70+ 33.413% 25.059% 16.706% 0.000%
Medicare Levy Surcharge (MLS) if no private hospital cover
All 0.0% 1.0% 1.25% 1.5%

These thresholds increase annually, indexed by Average Weekly Ordinary Time Earnings, and increase by $1,500 for every child after the first. The family thresholds apply to couples and single-parent families. The means testing is based on the Australian Tax Office’s definition of income for MLS purposes.

The rebate will continue to apply to the cost for hospital and extras cover but does not apply to any applicable Lifetime Health Cover loading.