Private health insurance rebate eligibility

Eligibility for the private health insurance rebate depends on your circumstances, including your policy and income.

Last updated 30 June 2024

Eligibility to claim the rebate

Regardless of your residency status in Australia, to claim the private health insurance rebate you must:

have a complying health insurance policy with an Australian-registered health insurer
be eligible for Medicare
be a private health insurance incentive beneficiary
have an income for surcharge purposes that is less than the Tier 3 income threshold.

If you are eligible to claim the private health insurance rebate, you can claim it as either:

reduced premiums throughout the income year
a refundable rebate when you lodge your tax return.

Complying health insurance policy

Your health insurance policy is complying if it:

is provided by a registered health insurer
provides hospital cover or combined hospital and general (also known as 'extras') cover
meets other complying private health insurance policy requirements.

If you are unsure, your private health insurerExternal Link can tell you whether your policy meets these conditions.

If your private health insurance provider is an overseas provider that is not registered in Australia, you will not be eligible for any rebate on your policy.

Private health insurance incentive beneficiary

All adults who are covered by a private health insurance policy are known as private health insurance incentive beneficiaries.

If a policy only covers a dependent child (or children), then the parents of that child (or children) will be private health insurance incentive beneficiaries.

If the policy only covers a dependent child (or children) and the parents are not married (or de facto) at the end of the income year, the payer of the premiums will be the only private health insurance incentive beneficiary, as long as the payer is not a dependent child.

Income for surcharge purposes

Income for surcharge purposes is used to test your eligibility for the private health insurance rebate. It is not the same as your taxable income.

To be eligible for the private health insurance rebate, your income for surcharge purposes must be less than the Tier 3 income threshold. Tier 3 is the highest income threshold for both singles and families.

Tell your private health insurer:

if you are choosing to claim your rebate as a premium reduction
which income threshold tier your income for surcharge purposes is in.

If you claim too much rebate as a premium reduction, you may have a tax liability when you lodge your tax return. To help avoid this, you should tell your private health insurance provider if your income for surcharge purposes changes and you move into a different income tier.

You can work out your income for surcharge purposes with our Private health insurance rebate calculator.

Income for surcharge purposes is the sum of the following items for you and your spouse (if you have one):

Taxable income
- include the net amount on which family trust distribution tax has been paid
- don't include any assessable first home super saver (FHSS) released amount for the income year under the FHSS scheme.
Reportable fringe benefits.
Total net investment losses – the sum of
- net financial investment losses
- net rental property losses.
Reportable super contributions – the sum of
- reportable employer super contributions
- deductible personal super contributions.

If you were aged from your preservation age to under 60 years old, you subtract from the total (above) any taxed element of a super lump sum (other than a death benefit) which you received that does not exceed your low rate cap.

Your family income for surcharge purposes is the total of your and your spouse's income, using the criteria above.

Example: income for surcharge purposes changes during the income year

Belinda has a salary sacrifice arrangement under which her employer pays for her private health insurance. Belinda is single with no dependants so the policy only covers her.

Even though Belinda’s employer pays her premiums, her income for surcharge purposes will be used to determine if Belinda is entitled to a private health insurance rebate.

At the start of the 2023–24 income year, Belinda’s income for surcharge purposes is $132,000 (tier 2). Belinda’s employer pays reduced premiums based on Belinda being entitled to a rebate for the entire income year.

Part way through the income year, Belinda gets a promotion and her income for surcharge purposes increases to $145,000 (tier 3). This means Belinda isn’t entitled to any private health insurance from the time her income increases until the end of the income year. Belinda doesn’t advise her health insurer of this change to her income.

Although Belinda isn’t entitled to the rebate for the full income year, she has received the benefit of a higher amount of rebate through the reduced premiums her employer paid for her. When she lodges her return at the end of the 2023–24 income year, she will have a tax liability for the excess private health insurance reduction.

End of example

If someone else pays your premiums

Regardless of who pays the premiums for your private health insurance policy, each adult covered by the policy is income tested to determine their entitlement to a rebate. If you share the policy, you will be income tested on your share. Allocating shares to each adult covered by the policy ensures that any available rebate is distributed evenly.

If your employer pays for your private health insurance, you are generally entitled to the rebate as a reduced premium, and your employer will pay any outstanding premium.

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