Australian Government Rebate on Private Health Insurance and Medicare Levy Surcharge
Australian Government Rebate on Private Health Insurance
Until recently most Australians with Private Health Insurance received a 30% rebate to help cover the cost of their premiums.
From 1 July 2012, your private health insurance rebate became income tested (see table below).
If you expect to earn more than $84,000 as a single, or more than $168,000 as a family, you will need to use the table below to calculate your rebate tier.
There are a number of ways to claim the Private Health Insurance Rebate:
- As a premium reduction through GMHBA
- As a direct payment from a Medicare Office
- As a tax off set 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.
| | Unchanged | Tier 1 | Tier 2 | Tier 3 |
| Singles | $84,000 or less | $84,001-$97,000 | $97001-$130,000 | $130,001 or more |
| Couples / Families | $168,000 or less | $168,001-$194,000 | $194,001-$260,000 | $260,001 or more |
| Private Health Insurance Rebate |
| Under 65 Years | 30% | 20% | 10% | 0% |
| 65-69 Years | 35% | 25% | 15% | 0% |
| 70 Years and over | 40% | 30% | 20% | 0% |
Please note: As soon as one member on the membership moves to the next age bracket the entire membership will receive either 35% or 40% (depending on your level of income).
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 $84,000 as a single or $168,000 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 $84,000 as a single or $168,000 as a family.
- Tier 2 – A levy of 1.25% will apply to people who earn more than $97,000 as a single or $194,000 as a family.
- Tier 3 – A levy of 1.5% will apply to people who earn more than $130,000 as a single or $260,000 as a family.
| | Unchanged | Tier 1 | Tier 2 | Tier 3 |
| Singles | $84,000 or less | $84,001-$97,000 | $97001-$130,000 | $130,001 or more |
| Couples / Families | $168,000 or less | $168,001-$194,000 | $194,001-$260,000 | $260,001 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: