Australian Government Rebate on Private Health Insurance and Medicare Levy Surcharge

Australian Government Rebate on Private Health Insurance

The Australian Government Rebate reduces the cost of private health insurance and makes your cover more affordable. The rebate is available to any Australian who is eligible for Medicare and, depending on your income and the age of the oldest person on your policy, the government may pay a percentage of your premium. The rebate applies to all GMHBA covers and there are a number of ways to claim the Australian Government Rebate

  • As a premium reduction through GMHBA
  • A lump sum payment when lodging your annual tax return

If you choose to claim your rebate through GMHBA, you can nominate a tier you expect to be in and we can adjust your rebate.

From 1 April 2014, the Government has reduced the rebate on private health insurance.

The reduction is based on a calculation which incorporates any changes to the average health insurance premium by industry and the cost of living.

These changes affect all health funds equally.

The Government will adjust the rebate percentage on the 1st April every year.

Please note that if you have a Lifetime Health Cover loading (LHC), the rebate is not claimable on the LHC loading component of your premium.

More information

For more information about the Australian Government Rebate or the Medicare Levy Surcharge you can:

The change is effective from 1 April 2015 and applies to every health fund.

  Tier 0 Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001-$105,000 $105,001-$140,000 $140,001 or more
Couples / Families $180,000 or less $180,001-$210,000 $210,001-$280,000 $280,001 or more
Rebate Entitlement
Less than 65 years 29.04% 19.36% 9.68% 0.00%
65-69 years 33.88% 24.20% 14.52% 0.00%
70 years+ 38.72% 29.04% 19.36% 0.00%

Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) is an additional tax which Australians need to pay if they are without private health insurance hospital cover and are earning over $90,000 as a single or $180,000 as a couple/family. If you do not hold an eligible hospital cover (or if you drop your hospital cover) you will have to pay additional tax on top of the standard Medicare Levy that applies to all Australian taxpayers.

The Federal Government increased the MLS in July 2012 to encourage people to maintain their private health insurance, rather than adding to the already long waiting lists for public hospitals.

The amount that you pay is now based on income tiers:

  • Tier 1 – A 1% Medicare Levy Surcharge will be paid by people who earn more than $90,000 as a single or $180,000 as a family.
  • Tier 2 – A levy of 1.25% will apply to people who earn more than $105,000 as a single or $210,000 as a family.
  • Tier 3 – A levy of 1.5% will apply to people who earn more than $140,000 as a single or $280,000 as a family.
  Unchanged Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001-$105,000 $105,001-$140,000 $140,001 or more
Couples / Families $180,000 or less $180,001-$210,000 $210,001-$280,000 $280,001 or more
Medicare Levy Surcharge
All ages 0% 1.0% (unchanged) 1.25% 1.5%

How to avoid the Medicare Levy Surcharge

You can avoid the MLS (and pay less tax) by keeping your hospital cover with us or adding a hospital cover to your policy. You’ll only be exempt from the MLS for the period during which you held this level of hospital cover. If you decide to leave and come back to private health insurance later, waiting periods and Lifetime Health Cover loading may apply. Please note Extras cover (general treatment) alone will not provide an exemption; it must be packaged with an eligible hospital cover.

Some other health funds may offer hospital covers with higher excesses that are not exempt from the MLS. At GMHBA, all of our hospital covers are eligible due to our lower excesses.

More information

For more information about the Australian Government Rebate or the Medicare Levy Surcharge you can: