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Australian Government Rebate

Find out if you are eligible for a rebate and reduce your premium.

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Australian Government Rebate on private health insurance

The Australian Government provides a rebate on premiums paid for private health cover. On 1 July 2012 the rebate became subject to income testing and three rebate tiers were created. The level of rebate you are entitled to depends on your level of income and which rebate tier (or income threshold) you fall into. In addition to the income test, the level of rebate you are entitled to also depends on the age of the oldest person covered by your policy as the rebate increases when you turn 65 and again when you turn 70. People on very high incomes may not be eligible for any rebate from the government.

On 1 July 2013, the Australian Government introduced a further change to remove the rebate from any Lifetime Health Cover loading that may apply to a policy, meaning that as from 1 July 2013, the rebate only applies to the base rate premium of a private health insurance product.

Indexing the Australian Government Rebate: On 1 April 2014, the government also introduced new legislation to index the rebate and cap how much it contributes towards private health insurance. The indexing of the rebate means the rebate percentages are adjusted each year from 1 April.  The new rebate percentages apply to payments made on or after 1 April, regardless of the period the payment covers.

For families with children, the below income thresholds are increased by $1,500 for each child after the first.

Table 1 shows the percentage rebates that apply to payments made on or after 1 April 2016



Income



Base Tier

Tier 1 

 Tier 2

Tier 3

 Single income 

 $0 - $90,000 

 $90,001 - $105,000  

 $105,001 - $140,000 

$140,001 +

 Family income 

 $0 - $180,000 

$180,001 - $210,000 

 $210,001 - $280,000 

$280,001 +



 Table 1: Private Health Insurance Rebate

 Less than 65 yrs 

26.791% 

 17.861% 

8.930%

Nil 

 65 to 69 yrs 

31.256% 

22.326%

13.395%

Nil 

 70 yrs or over 

35.722%

26.791%

17.861%

Nil 

 

Table 2 shows the percentage rebates that apply to payments made on or after 1 April 2017



Income



Base Tier

Tier 1 

 Tier 2

Tier 3

 Single income 

 $0 - $90,000 

 $90,001 - $105,000  

 $105,001 - $140,000 

$140,001 +

 Family income 

 $0 - $180,000 

$180,001 - $210,000 

 $210,001 - $280,000 

$280,001 +



 Table 2: Private Health Insurance Rebate

 Less than 65 yrs 

25.934% 

 17.289% 

8.644%

Nil 

 65 to 69 yrs 

30.256% 

21.612%

12.966%

Nil 

 70 yrs or over 

34.579%

25.934%

17.289%

Nil 

The income testing applies to the financial year in which the payment is received by the health fund, regardless of the period the payment covers.

The income thresholds are usually reviewed and indexed by the Government each year. However, as part of the 2015 Federal Budget, the Government paused the indexing of the income thresholds until 30 June 2018.

How can you claim the rebate?

You can lower your health cover premium by applying to receive the rebate as a reduction in the premium you pay to St.LukesHealth, providing everyone on your policy is eligible for Medicare. If you do wish to claim the rebate as a premium reduction you will need to nominate a rebate tier from the above table so that we know how much rebate you wish to claim. To register for a premium reduction all you need to do is complete the Australian Government Rebate application form.

Alternatively, you can claim the rebate in your annual tax return. 

What if you claim the wrong level of rebate as a premium reduction?

If at the end of the financial year you find out you are eligible for a different level of rebate to the level you have claimed as a premium reduction, an adjustment will be made in your annual tax return. You may wish to nominate a rebate tier based on what you believe would be the upper limit of the income you expect to earn to avoid a tax liability at the end of the year. There is no penalty imposed by the ATO for claiming the wrong level of rebate, however, if you have claimed too much or too little this will be adjusted in your annual tax return

What if I’m already claiming the rebate as a premium reduction?

You may wish to consider nominating a rebate tier if you expect your income to exceed the amounts shown under Tier 1 to avoid a tax liability at the end of the year. If you do not nominate a rebate tier, your premium won't change and we will continue to claim your current rebate level on your behalf.



How can I nominate a new rebate tier?

You can nominate a new rebate tier in one of four ways:

  1.  Call us on 1300 651 988:
  2.  Email general@stlukes.com.au;
  3.  Visit your nearest St.LukesHealth office; or
  4.  Through online member services.

If you are not registered for online member services you can register now.



How often can I change my rebate tier nomination?

You can change your rebate tier as often as you wish, however you can’t backdate a tier nomination as the rebate would already have been claimed from the government for your previous premium payments.



What income is included in the income test?

To find out what income is tested for a single person or for a family or couple go to www.ato.gov.au/privatehealthinsurance.

How can I find out more information about the rebate?

Go to www.ato.gov.au/privatehealthinsurance

To find out how the rebate changes may affect your individual circumstances, consult your tax advisor or contact the ATO on 13 28 61.

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