Rebate and Medicare levy surcharge

Australian Government Rebate on Private Health Insurance

The Australian Government provides an income tested rebate to help people meet the cost of private health insurance.

A person may claim the private health insurance rebate if they:

  • are eligible for Medicare
  • have a complying health insurance product (CHIP) that provides hospital treatment, general treatment (also known as ancillary or extras) cover or both and
  • have a taxable income for Medicare levy surcharge (MLS) purposes as shown in the table below.

From 1 July 2023, the income thresholds used to determine a person’s eligibility for the rebate are based on the following table:

  Base Tier Tier 1 Tier 2 Tier 3
Singles $93,000 or less $93,001-$108,000 $108,001-$144,000 $144,001 or more
Couples / Families $186,000 or less $186,001-$216,000 $216,001-$288,000 $288,001 or more

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

Income threshold rates from 2014-15 to 2022-23

  Base Tier 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

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

The rebate amounts continue to be adjusted annually on 1 April based on the Rebate Adjustment Factor.

The Private Health Insurance Rebate Percentages are as follows:

Private Health Insurance Rebate 

  Base Tier Tier 1 Tier 2 Tier 3
Rebate Entitlement
Under 65 24.608% 16.405% 8.202% 0.00%
65-69 28.710% 20.507% 12.303% 0.00%
70+ 32.812% 24.608% 16.405% 0.00%

 

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first. Rebate levels are adjusted annually on 1 April based on the Rebate Adjustment Factor.

The tiers are based on your taxable annual income for Medicare levy surcharge purposes.

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 have an annual taxable income over $93,000 as a single or $186,000 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.

From 1 July 2023, amount that you pay is based on income tiers:

  • Tier 1 – A 1% Medicare Levy Surcharge will be paid by people with a taxable income ≥ $93,000 as a single or $186,000 as a family
  • Tier 2 – A levy of 1.25% will apply to people with a taxable income ≥ $108,000 as a single or $216,000 as a family
  • Tier 3 – A levy of 1.5% will apply to people with a taxable income ≥ $144,000 as a single or $288,000 as a family
  Base Tier Tier 1 Tier 2 Tier 3
Singles $93,000 or less $93,001-$108,000 $108,001-$144,000 $144,001 or more
Couples / Families $186,000 or less $186,001-$216,000 $216,001-$288,000 $288,001 or more

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

MLS Income threshold rates from 2014-15 to 2022-23

  Base Tier 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

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

How to avoid the Medicare Levy Surcharge

You can avoid the MLS by keeping your hospital cover 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: