Private health insurance rebate
The government pays part of your health cover premium. See your rebate rate for 2025-26, and what it takes off the price.
Your details
The rebate is higher from age 65, and higher again from 70.
Your rebate
24.288%
Base tier rebate for 2025-26
A cheaper premium makes hospital cover a stronger deal against the Medicare Levy Surcharge.
What the rebate actually is
The government pays part of your hospital and extras premium. That is the rebate. It is not a discount from your insurer. It comes from the ATO.
How much you get depends on two things: your income and your age. Lower income means a bigger rebate. Being 65 or over means a bigger rebate again.
Everyone under the top income tier gets something. Above it, the rebate is zero, and that is the same income range where the surcharge starts to bite.
Why your rebate can change
The rate is not fixed forever. Three things move it:
- 1 April each year. The government re-sets the rebate percentages. They have drifted down most years.
- Your birthday. Turning 65, then 70, moves you into a higher age band.
- Your income. A pay rise can push you into the next tier and cut your rebate.
Your insurer uses the tier you nominate. If you guess low, you get too much rebate during the year and the ATO claws it back at tax time. Guess high and you get the difference as a refund.
How to claim it
There are two ways, and you get the same amount either way.
As a lower premium
Tell your insurer your income tier. They take the rebate off each bill, so you pay less every month.
As a tax refund
Pay the full premium during the year and claim the rebate back when you lodge. Useful if your income is hard to predict.
Estimating a tier too low means a tax bill later. If unsure, claim through your return. Rates change every 1 April, so a year can blend two. This is an estimate, not tax advice.
Rebate and the surcharge
The rebate lowers your premium. The Medicare Levy Surcharge is a separate tax on higher earners without cover. Together they decide whether cover beats the tax. Run your own numbers in the MLS calculator to see it.
Rebate questions
What is the private health insurance rebate?
It is a government contribution towards your hospital or extras premium. You can take it as a lower premium from your insurer, or claim it back in your tax return.
How much is the rebate?
It depends on your income and age. Most people under 65 on a lower income get about 24% off. It falls as income rises, and reaches 0% in the top tier. Rates change every 1 April.
Does the rebate lower the Medicare Levy Surcharge?
No. The rebate lowers your premium. The surcharge is a separate tax. But a cheaper premium makes holding cover a better deal than paying the surcharge.
Do I have to earn under a threshold to get it?
Yes for the full rate. Above the top tier, meaning single income in Tier 3, the rebate is 0%. You still keep any Medicare Levy Surcharge benefit from holding cover.