The Australian Government Rebate on Private Health Insurance (to save everyone time, let’s just call it ‘the rebate’) is an income-tested incentive that aims to help with the ongoing cost of private health insurance. Here’s all you need to know about the rebate, who’s eligible, and how to claim it.

Understanding the rebate

When you take out hospital or extras cover, you nominate a rebate tier based on the age of the oldest person on your policy, your family status and income for surcharge purposes. This tier is used to calculate the rebate you’re entitled to. You can claim it as a premium reduction on your health insurance premium, or directly from the Australian Tax Office when you lodge your tax return. It’s your call.

Am I eligible for the rebate?

To claim, you have to:

  1. Hold a complying health insurance policy (all Frank hospital and extras policies are eligible) with an Australian-registered health insurer (that's us). Tick and tick.
  2. Be eligible for Medicare
  3. Be a private health insurance incentive beneficiary. That basically means you’re an adult covered by private health insurance.

Your annual income determines which Tier you’re eligible for: Base Tier, Tier 1 or Tier 2.

Tier 3 has a 0% rebate applied. If you fall into this income level, you won’t see any benefit straight away, but it’s worth still registering for the rebate in case your income level drops into any of the lower tiers down the track.

You can view your rebate before you purchase when you get a quote online.

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How much do I get back?

The table below shows you what Tier you're in, based on rates for the period 1 July 2023 to 30 June 2024*. Different thresholds apply, depending on whether you have a single or family income.
  Base Tier Tier 1 Tier 2 Tier 3
Single $93,000 or less $93,001 - $108,000 $108,001 - $144,000 $144,001 or more
Couple/Family/Single Parent  $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.

*The income threshold tiers will be updated for the next financial year (1 July 2024 to 30 June 2025).

The table below shows what rebate percentage applies to you based on your income tier and age.

The Australian Government Rebate on Private Health Insurance
Age 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: Rebate percentage levels may be adjusted annually on 1 April based on the Rebate Adjustment Factor, however these remain unchanged for the period 1 April 2023 to 31 March 2025.

If you prefer your math done for you, the ATO also has a handy Rebate calculator. Just enter your income and current circumstances, and it’ll calculate the rebate percentage you can expect.

How it works: Let’s say you’re a single parent under 65 with one child and you earn $120,000 per year. As a single parent, you’d be on the Family Threshold. And since you earn less than $186,000 per annum, you would be on the Base Tier. You would receive a rebate of 24.608%* on the cost of your private health insurance.

*Based on rates from 1 July 2023 to 30 June 2024

How do I claim the rebate?

When you first join Frank, you'll be asked which way you want to claim the rebate. If you want to claim the rebate as a premium reduction on your Frank insurance, you’ll be asked to fill out a rebate application form as part of the sign-up process. If you want to claim the rebate as a lump sum, just fill out the relevant section when you or your favourite tax professional are working through your tax return each year. It’s up to you.

If you are an existing Frank member and want to change the rebate you are currently claiming or switch to claiming the rebate as a premium reduction (if eligible), all you need to do is complete a rebate application form and send it to Frank.

It’s worth a mention that if you have Lifetime Health Cover (LHC) loading applied to your policy, the rebate isn’t paid on the LHC loading component of your premium.

Where can I find my rebate amounts?

Frank sends your rebate information directly to the ATO each July so it can be pre-filled in your tax return. That means when you lodge your tax return (online or through a registered tax agent) your information will be automatically populated. For this reason, we no longer send out statements to members, but you can still request one in July if you need a copy. Here’s an example of the rebate information.

Note that you might see two lines of information, rather than one. The rebate rates are reviewed annually. If any changes are made, they come into effect on 1 April of each year, based on the Rebate Adjustment Factor. You just need to enter both rebate lines when doing your income tax return. If you want us to double check what percentage you’re currently on, simply get in touch.

Do I need to notify Frank if my income changes?

You sure do. It’s important to let us know if your income changes during the financial year, as this could affect your private health insurance rebate. If you’ve moved up or down an income tier, for example, you may be entitled to a bigger refund at tax time or have to pay some of your rebate back in your tax.

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Are there tax benefits from having private health insurance?

The private health insurance rebate is an incentive that can reduce the cost of health insurance.

If you earn more than $93,000 as a single, or $186,000 (plus $1,500 for each dependent child after the first one) as a family, for example, taking out private health insurance hospital cover could help you avoid the Medicare Levy Surcharge.

Tax rebate vs. Tax deduction: It’s important not to confuse these two. Private health insurance isn’t a tax deduction.

  • The private health insurance rebate is a government contribution towards the cost of your private health insurance. It can be claimed upfront with your health insurer to reduce your premiums, or you can claim it as a lump sum refund at tax time each year.
  • A tax deduction is something that reduces your taxable income when you do your tax return (such as claiming work from home expenses).

Need rebate help?

All this can be kind of complicated, we know. That’s why it’s a good idea to pick up the phone and give us a call if you have any questions about the private health insurance rebate. If you’re more digitally inclined, chat to us online or via the Frank app.

At Frank, we want to make health insurance as affordable as possible. Part of that is to make sure you get the most out of any private health insurance perks that you’re eligible for.

Frequently asked questions about the rebate

What happens if I choose the wrong income tier?
It's a lot of numbers, we get it! While there's no penalties as such for estimating your income incorrectly during the financial year, it could impact your income tax return.

It's important to keep us in the loop if your annual income changes, so we can make sure you’re getting the right rebate amount.

  • If you choose a tier that's higher than your actual income, you'll end up with a lower rebate amount than what you should get. If that happens, you’ll still get it back in your tax return.
  • If you've done the opposite and selected a tier that's lower than your actual income, you'll end up with a higher rebate amount than what you’re entitled to. You may have to pay an extra amount when you lodge your tax return for that financial year if that happens.

Does the rebate apply to extras too?
It sure does! The rebate applies to both hospital and extras cover. So even if you have an extras-only policy, you're still entitled to a premium reduction on your health insurance. Remember though, the amount you get back will depend on your age, family circumstances and income threshold.