Medicare Safety Net
A scheme that provides higher Medicare rebates once your out-of-pocket medical costs exceed certain annual thresholds.
The Medicare Safety Net provides additional financial assistance when your out-of-pocket costs for out-of-hospital Medicare services (such as GP visits, specialist consultations, and diagnostic imaging) exceed certain annual thresholds within a calendar year (1 January to 31 December). Once you reach the threshold, Medicare pays a higher percentage of the schedule fee for subsequent services.
There are multiple safety net thresholds. The Original Medicare Safety Net applies once gap amounts (the difference between the Medicare benefit and the schedule fee) exceed $594.40 (2026). After this, Medicare pays 100% of the schedule fee for out-of-hospital services. The Extended Medicare Safety Net kicks in when total out-of-pocket costs exceed $2,699.10 for general consumers or $861.20 for Commonwealth concession card holders and families eligible for Family Tax Benefit Part A.
To benefit from the safety net, you should register your family group with Medicare (via myGov or a Medicare service centre). This pools the out-of-pocket costs of all family members towards the threshold. Without registration, only individual costs count, making it harder to reach the threshold. The safety net resets at the start of each calendar year.
How it works
The Medicare Safety Net tracks your out-of-pocket costs for out-of-hospital Medicare services across a calendar year and, once you cross a threshold, increases the rate Medicare pays for further services in that same year. There are two thresholds working differently: the Original Medicare Safety Net tracks the gap amount — the difference between what Medicare pays and the schedule fee — and once that gap total passes $594.40 (2026), Medicare starts paying 100% of the schedule fee for further out-of-hospital services. The Extended Medicare Safety Net tracks your actual out-of-pocket costs against a higher threshold, set at $2,699.10 for general consumers and a lower $861.20 for concession card holders and families receiving Family Tax Benefit Part A.
In practice, the safety net matters most for people with ongoing specialist care, frequent diagnostic imaging, or a family with several members regularly seeing doctors — the costs accumulate through the year and Medicare automatically applies the higher benefit once a threshold is reached, visible as a bigger rebate on your Medicare statement. Registering as a family group with Medicare, through myGov or in person, is the step that makes the safety net work as intended for households: it pools every family member's out-of-pocket costs toward the one threshold, which is usually reached far sooner as a household than person by person.
The safety net only counts out-of-hospital Medicare services — GP visits, specialist consultations, and diagnostic imaging billed through Medicare — and doesn't include costs incurred as a private hospital patient, which are covered separately, if at all, through private health insurance. It's also easy to confuse with the Medicare levy or the Private Health Insurance Rebate, but the safety net is unrelated to either — it doesn't reduce your tax, it increases the Medicare rebate you receive on eligible out-of-hospital costs once a calendar-year spending threshold is crossed, and it resets to zero every 1 January regardless of the financial year.
Example: reaching the Extended Safety Net threshold
A family registered as a Medicare family group accumulates $2,750 in out-of-pocket costs for GP and specialist visits across the calendar year — just over the $2,699.10 Extended Medicare Safety Net threshold for general consumers.
For further out-of-hospital services for the rest of that calendar year, Medicare pays a higher percentage of the gap, reducing the family's out-of-pocket cost on subsequent visits until the threshold resets on 1 January.
Related Terms
Medicare Levy
A 2% levy on taxable income to help fund Australia's public healthcare system, Medicare.
Private Health Insurance Rebate
A government rebate that reduces the cost of private health insurance premiums, means-tested based on income and age.
Medicare Levy Surcharge (MLS)
An additional 1%–1.5% surcharge on higher-income earners who don't hold private hospital insurance.