Private Health Insurance Rebate
A government rebate that reduces the cost of private health insurance premiums, means-tested based on income and age.
The Private Health Insurance Rebate is a government subsidy that reduces the cost of eligible private health insurance premiums. The rebate percentage varies by age and income tier, with older and lower-income policyholders receiving a higher rebate, and is updated each 1 April (not aligned with the financial year). For the rebate year effective 1 April 2026 – 31 March 2027, the base rebate for singles earning $105,000 or less (families $210,000 or less) is 24.118% for those under 65, 28.139% for ages 65–69, and 32.158% for 70 and over.
The rebate reduces as income increases through three tiers, and individuals/families above the top threshold ($164,000 singles / $328,000 families) receive no rebate at all. You can receive the rebate in one of two ways: as a premium reduction (your insurer reduces your premiums by the rebate amount, and you claim this on your tax return for reconciliation) or as a refundable tax offset (you pay full premiums and claim the rebate when you lodge your tax return).
If you receive the rebate as a premium reduction during the year but your income ends up being higher than expected, you may need to repay some of the rebate through your tax return. The ATO reconciles the rebate you received against the rebate you were entitled to, based on your actual income for the year.
Related Terms
Medicare Levy Surcharge (MLS)
An additional 1%–1.5% surcharge on higher-income earners who don't hold private hospital insurance.
Medicare Levy
A 2% levy on taxable income to help fund Australia's public healthcare system, Medicare.
Tax Offset (Rebate)
A direct reduction in the amount of tax you owe, different from a deduction which reduces taxable income.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.