Federal Government Rebate

The Australian Government Rebate on Private Health Insurance is designed to make private health insurance more affordable. From 1 July 2012, the Federal Government Rebate is means tested.

The health insurance rebate applies to the total premium for your health cover – regardless of whether the policy is for hospital cover, general treatment (extras) cover or a combination of both.

How much is the health insurance rebate

The level of rebate you may be entitled to is determined by the age of the oldest person covered by the policy and you or your family's income.Current rebate levels are available here.

How to claim the Government rebate

The Federal Government Rebate on Private Health Insurance can be claimed in either of two ways – as a premium reduction or as a tax offset.

From 1 July 2012, members will need to estimate their annual income and claim the appropriate rebate amount.  If that estimate proves to be incorrect, the member may need to repay any overclaimed rebate or claim additional rabate when they complete their tax return.

If you are unsure of or unable to accurately estimate your annual income, it may be prudent to over estimate your income and claim a lower rebate throughout the year. That way, you will most likely receive a payment or credit via the ATO for any unclaimed rebate instead of receiving a request to repay overpaid rebate when you lodge your tax return.

Premium Reduction

Most people claim the health insurance rebate as a premium reduction. Under this option, the Federal Government will send the rebate directly to your health fund – so when you make your health insurance premium payments, you only have to pay the balance.  For example, if you are entitled to a 30% Government rebate, your payments will actually represent 70% of the total premiums – and the Government will send the 30% rebate directly to your health fund.

Tax Offset

If you choose to recover your Government health insurance rebate this way, you will claim a refundable tax offset at the end of the income year through your tax return. 

Your health fund will send you a health Insurance Statement during July which will provide the information you need to complete the relevant section of your tax assessment/return.

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