The guide · card 6 of 6
The private health insurance rebate, tier by tier
The private health insurance rebate is an Australian Government contribution to your premiums, set as a percentage that depends on your income and the age of the oldest person on the policy. You can take it as a lower premium through your insurer or as a refundable tax offset in your tax return.
The rates, 1 July 2026 to 31 March 2027
The rebate is income tested, and it also depends on the age of the oldest person covered by the policy. These rates apply to premiums paid from 1 July 2026 to 31 March 2027, as at October 2026.
| Tier | Single income | Family income | Under 65 | 65 to 69 | 70 and over |
|---|---|---|---|---|---|
| Base tier | $105,000 or less | $210,000 or less | 24.118% | 28.139% | 32.158% |
| Tier 1 | $105,001 – $123,000 | $210,001 – $246,000 | 16.079% | 20.098% | 24.118% |
| Tier 2 | $123,001 – $164,000 | $246,001 – $328,000 | 8.038% | 12.058% | 16.079% |
| Tier 3 | $164,001 or more | $328,001 or more | 0% | 0% | 0% |
The family threshold rises by $1,500 for every Medicare levy surcharge dependent child after the first: with three dependent children, it rises by $3,000. The income tiers are the same ones used for the Medicare levy surcharge.
Why the percentages change each April
Since 1 April 2014 the government’s contribution has been calculated with a Rebate Adjustment Factor, a formula that takes account of growth in the Consumer Price Index and the industry weighted average premium increase. That is why the rates move on 1 April: the under-65 base rate was 24.288% until 31 March 2026 and 24.118% from 1 April 2026. The ATO says the rates from 1 April 2027 will become available in March 2027.
An announced change, not yet law. The government announced in the 2026–27 Budget that from 1 April 2027, people aged 65 and over would receive the same rebate rate as others in the same income tier, subject to legislation passing Parliament.
The Department of Health’s fact sheet shows the proposed rates as 24.118%, 16.079%, 8.038% and 0% for every age, with the adjustment factor set to 1 for 1 April 2027. Check health.gov.au for whether it has passed.
Who can claim it
To claim the rebate, the ATO says you must:
- hold a complying health insurance policy with an Australian-registered health insurer;
- be eligible for Medicare;
- be a private health insurance incentive beneficiary (every adult covered by the policy is one);
- have an income for surcharge purposes below the Tier 3 threshold.
It applies to hospital, general treatment (extras) and ambulance policies from Australian registered insurers, and not to Overseas Visitors Health Cover. It does not apply to any Lifetime Health Cover loading on a premium, only to the standard part.
Two ways to receive it
As a lower premium
Your insurer reduces what you pay through the year. You nominate the income tier you expect to fall into, by contacting your insurer.
As a tax offset
You pay the full premium and claim the rebate as a refundable tax offset when you lodge your tax return.
Either way, the ATO checks the result against your actual income at tax time. If you nominated too low a tier, you received too much rebate and it becomes a tax liability; if you nominated too high a tier, the rest comes back as an offset. Privatehealth.gov.au notes there are no additional penalties for estimating your income incorrectly. The ATO suggests telling your insurer if your income moves you into a different tier during the year.
Single or family: it is decided on 30 June
Your family status on 30 June decides whether the single or family thresholds apply. If you had a spouse on that day, or you are a single parent with a dependant, you are tested against the family thresholds. A couple can also choose for one spouse to claim both entitlements in one return, if they had a spouse on the last day of the year, were covered by the same policy for the same period, and both agree.
A worked example
Example · one person, aged 45, single
- Income for surcharge purposes
- $95,000
- Tier for a single in 2026–27
- Base tier
- Rate, oldest person under 65
- 24.118%
- Premiums paid, 1 July 2026 to 31 March 2027, before the rebate
- $1,500
- Rebate: $1,500 × 24.118%
- $361.77
A made-up person and premium, worked from the ATO’s 2026–27 table. Any loading would be left out of the premiums first.
Work out your own
The ATO has a private health insurance rebate calculator, and its individual enquiries line is 13 28 61. Usually your rebate information is filled into your tax return for you, and your insurer can give you a statement at the end of the financial year.