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The Australian Government rebate on private health insurance

 

What is the rebate?

The Australian Government Rebate on private health insurance (the ‘rebate’) is an initiative whereby, depending on your income, the Government contributes to the cost of a member’s private health insurance. The Rebate percentages changes yearly, and is effective from 1 April.

How is the rebate calculated?

The Government announced that, from 1 April 2014 and every year thereafter, the Rebate will be indexed annually by the lesser of the Consumer Price Index (CPI) growth or the industry average health insurance premium increase.

What does this change mean for me?

If you are eligible for the rebate, it is important to understand that this change may impact the cost of your premiums. The change in the Government Rebate means that the rebate percentage you’re receiving will be reduced each year if the average premium increase for all health insurers is higher than the CPI. If you are not eligible for rebate, this change does not affect you.

The table below is an illustration of the additional impact on price as a result of a lower 2016 rebate. For example, Lisa has been with Bupa since 2015. She is under 65 years of age and receiving the full rebate. In 2015 she was entitled to 27.820% rebate, and in 2016 this will reduce to 26.791% rebate. This is effectively increasing her 2015 premium by 1.5% on top of her price increase of her cover.

Single Income Thresholds#

Up to $90,000

$90,000 - $105,000

$105,000 - $140,000

More than $140,000

Couples/Families Income Thresholds#

Up to $180,000*

$180, 000 - $210,000*

$210,000 - $280,000*

More than $280,000*

Insured Age

Base Tier

Tier 1

Tier 2

Tier 3

less than 65

1.5%

0.9%

0.4%

0.0%

65-69

1.9%

1.2%

0.6%

0.0%

70+

2.4%

1.5%

0.9%

0.0%

#The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018. For more information visit ato.gov.au.


Am I eligible for the rebate?

1. If you are an Australian resident

If you’re an Australian permanent resident who is eligible for Medicare and holds private health insurance, you may be entitled to receive the rebate depending on your age and income.

Singles Show

If you are single and earn more than $90,000 the rebate is based on your age and income. The table below highlights how much rebate you’re entitled to for the 2016/17 financial year for payments made after 1 April 2016:

Income Thresholds#

Up to $90,000

$90, 000 - $105,000

$105, 000 - $140,000

More than $140,000

Rebate Tiers

Base Tier

Tier 1

Tier 2

Tier 3

Rebate^

 

 

 

 

Up to 65 years

26.791%

17.861%

8.930%

0%

65 – 69 years

31.256%

22.326%

13.395%

0%

70 years and over

35.722%

26.791%

17.861%

0%

^Rebate percentages are effective for payments made from 1 April 2016 and are indexed annually. #The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018. For more information visit ato.gov.au.

Couples, De Facto Couples, Families or Single Parent Families Show

If your family earns more than $180,000 the rebate is based on your age and income. The level of rebate you're entitled to is based on the age of the oldest person covered by the policy and by combined annual earnings. The table below highlights how much rebate you’re entitled to for the 2016/17 financial year for payments made after 1 April 2016:

Income Thresholds#

Up to $180,000*

$180,000 - $210,000*

$210,000 - $280,000*

More than $280,000*

Rebate Tiers

Base Tier

Tier 1

Tier 2

Tier 3

Rebate^

 

 

 

 

Up to 65 years

26.791%

17.861%

8.930%

0%

65 – 69 years

31.256%

22.326%

13.395%

0%

70 years and over

35.722%

26.791%

17.861%

0%

^Rebate percentages are effective for payments made from 1 April 2016 and are indexed annually. #The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018. For more information visit ato.gov.au. *On a family membership this increases by $1, 500 per child after the first. The family thresholds also apply to single parent families and couples including de facto couples.


2. If you are an Overseas Visitor

Depending on your country of origin, your income and your level of cover you may be entitled to receive the rebate if you:

  • Are from a country with a Reciprocal Health Care Agreement (RHCA) with Australia. The countries that have an RHCA with Australia include: Belgium, Finland, Ireland, Italy, Malta, the Netherlands, New Zealand, Norway, Slovenia, Sweden and the United Kingdom.
  • Have a Reciprocal Medicare Card; and
  • Have Extras cover included on your Overseas Visitors Cover or in addition (the rebate is only available on your Extras cover), or
  • Have purchased Reciprocal Health Cover (an additional cover that can be purchased by you to help eliminate the Medicare Levy Surcharge).
Singles Show

If you are single and earn more than $90, 000 the rebate is based on your age and income. The table below highlights how much rebate you’re entitled to for the 2016/17 financial year for payments made after 1 April 2016:

Income Thresholds#

Up to $90,000

$90,000 - $105,000

$105,000 - $140,000

More than $140,000

Rebate Tiers

Base Tier

Tier 1

Tier 2

Tier 3

Rebate^

 

 

 

 

Up to 65 years

26.791%

17.861%

8.930%

0%

65 – 69 years

31.256%

22.326%

13.395%

0%

70 years and over

35.722%

26.791%

17.861%

0%

^Rebate percentages are effective for payments made from 1 April 2016 and are indexed annually. #The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018. For more information visit ato.gov.au.

Couples, De Facto Couples, Families or Single Parent Families Show

If your family earn more than $180,000 the rebate is based on your age and income. The level of rebate you're entitled to is based on the age of the oldest person covered by the policy and by combined annual earnings. The table below highlight how much rebate you’re entitled to for the 2016/17 financial year for payments made after 1 April 2016:

Income Thresholds#

Up to $180,000*

$180,000 - $210,000*

$210,000 - $280,000*

More than $280,000*

Rebate Tiers

Base Tier

Tier 1

Tier 2

Tier 3

Rebate^

 

 

 

 

Up to 65 years

26.791%

17.861%

8.930%

0%

65 – 69 years

31.256%

22.326%

13.395%

0%

70 years and over

35.722%

26.791%

17.861%

0%

^Rebate percentages are effective for payments made from 1 April 2016 and are indexed annually. #The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018. For more information visit ato.gov.au. *On a family membership this increases by $1, 500 per child after the first. The family thresholds also apply to single parent families and couples including de facto couples.


Claiming the rebate

The rebate is quick and easy to claim – you can choose to get it as a reduced premium or as a lump sum at tax time. See our list of frequently asked questions on how to claim and how to nominate your rebate tier with us to avoid paying the difference at tax time.

Why keep your private health insurance?

With access to Medicare for Australians, many people ask this very question. The reasons differ among almost half of the population who are covered – here are some of the main ones:

  • Choice if you need to go to hospital – by choosing your doctor, preferred hospital and timing of procedure (subject to availability)
  • Reducing the wait for hospital procedures which are not classified as a medical emergency
  • Cover beyond Medicare if you have extras cover
  • You may save money with health cover by avoiding paying the Australian Government’s Lifetime Health Cover (LHC) loading, and the Government’s Medicare Levy Surcharge (MLS).

Contact us

If you're a Bupa member and you can't find the information you need online, you can email us via myBupa.