Private Health Insurance Rebate Tiers 2026: How Much Can You Claim?

The Australian Government Rebate on private health insurance is income-tested. Higher earners receive a smaller rebate — or no rebate at all. The four tiers are based on your income for Medicare levy surcharge purposes.

Base Tier (income at or below $93,000 single / $186,000 family):

• Under 65: 24.608%
• Age 65-69: 28.710%
• Age 70+: 32.812%

Tier 1 ($93,001 to $108,000 single / $186,001 to $216,000 family):

• Under 65: 16.405%
• Age 65-69: 20.507%
• Age 70+: 24.608%

Tier 2 ($108,001 to $144,000 single / $216,001 to $288,000 family):

• Under 65: 8.202%
• Age 65-69: 12.303%
• Age 70+: 16.405%

Tier 3 ($144,001 and above single / $288,001 and above family):

• All ages: 0% (no rebate)

Use our Health Insurance Rebate Calculator to calculate your exact rebate amount in dollars.

You can claim the rebate in one of two ways:

Premium reduction (most common): You nominate your rebate tier to your health fund, and they bill you the reduced net premium. The government pays the rebate directly to the fund. For example, if your annual premium is $3,000 and you're on the base tier (24.608%), you pay $2,262 and the government pays $738 to your fund.

Tax return refund: You pay the full premium, and at tax time you claim the rebate as a tax offset in your return. The ATO refunds the rebate amount to you.

Most people use the premium reduction method — it's simpler and reduces your out-of-pocket cost immediately. The important thing is to nominate the correct rebate tier based on your expected income for the year. If you nominate a lower tier (higher rebate) than your actual income warrants, you'll need to repay the excess rebate through your tax return. If you nominate a higher tier (lower rebate), you'll receive the difference as a tax refund.

The income test for the health insurance rebate uses the same definition as the Medicare Levy Surcharge: your taxable income plus reportable fringe benefits, total net investment losses, and total reportable employer super contributions.

Key points:

• For couples and families, the threshold is based on combined income
• The family threshold increases by $1,500 per dependent child (from the second child onwards)
• If your income fluctuates year to year (e.g., you receive bonuses, sell investments, or have variable rental income), it's worth reviewing your nominated tier each April when premiums change
• A large one-off payment — a redundancy, an inheritance if taxable, or selling an investment — can push you into a higher tier and reduce your rebate for that year

If you're unsure what tier to nominate, choose conservatively (a higher tier = less rebate upfront) and claim any underclaimed rebate through your tax return. This avoids an unexpected debt at tax time.

To illustrate the value of the rebate, consider a 45-year-old single person on a gold hospital + extras policy costing $4,200 per year in gross terms:

• Base tier (income ≤$93,000): Rebate of 24.608% = $1,034 saving. Net premium: $3,166
• Tier 1 ($93,001-$108,000): Rebate of 16.405% = $689 saving. Net premium: $3,511
• Tier 2 ($108,001-$144,000): Rebate of 8.202% = $344 saving. Net premium: $3,856
• Tier 3 (over $144,000): No rebate. Full premium: $4,200

The difference between a base-tier and a Tier 3 rebate is $1,034 per year — almost a full month's premium. For families, the rebate value is larger still.

If you're on the base tier and your income increases significantly (a promotion, a bonus), review your rebate tier and your MLS exposure. Above $93,000, the combination of losing part of the rebate and paying the MLS if you don't have hospital cover adds up quickly. See our Medicare Levy Surcharge guide for details.

Does the rebate apply to extras/ancillary cover as well as hospital?
Yes — the rebate applies to both hospital and general treatment (extras) cover. It's calculated on your total premium including all components of your policy.

My fund applied last year's rebate tier — will they automatically update it?
Funds typically notify you each year to confirm or update your rebate tier when they notify you of premium changes. If you don't update, your fund will continue using your existing nominated tier. Review it each April and update if your income has changed.

Are children included in the family threshold?
The family threshold for 2025-26 is $186,000 and increases by $1,500 for each dependent child after the first. Children on family policies are covered by the family rebate — there's no separate child rebate.

Can I claim the rebate if I'm not an Australian resident?
The rebate is only available to Australian residents who are eligible for Medicare. If you're on a visa that doesn't grant Medicare access, you're generally not entitled to the rebate.