Private Health Insurance Rebate

Last updated July 2026

 

The Australian Government Rebate on private health insurance is an income-tested incentive that aims to help with the ongoing cost of your private health insurance. 

If your income sits below $164,000 for singles (or $328,000 for families) from 1 July 2026, the government may contribute between 24.118% and 32.158% toward your premiums. To qualify, you just need to hold eligible hospital cover, extras cover, or both. 

You have two simple ways to claim it. You can apply the rebate as an upfront premium reduction, or you can claim it as a tax offset when you lodge your annual return with the ATO. 

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.

Am I eligible for the rebate?

To claim the rebate, 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. (This 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.

Single parents and couples (including de facto couples) are assessed under the family income tiers. For families with children, the income thresholds increase by $1,500 for each additional child after the first. Couples are assessed using their combined income and will fall into the same family tier. However, the rebate applied to each person’s share of the policy may occasionally differ due to factors such as age.

How much do I get back?

The table below shows you what Tier you're in, based on rates effective from 1 July 2026. Different thresholds apply, depending on whether you have a single or family income.

 

The income thresholds and rebates that applied between 1 July 2025 to 30 June 2026:

 

How do I claim the rebate?

When you first join Frank, you'll be asked which way you want to claim the rebate.  

1. 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.  
2. If you want to claim the rebate as a lump sum, just fill out the relevant section when you or your tax professional are working through your tax return each year. It’s up to you. 
3. 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. 
4. 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 access a copy in your member area from mid-July. Here’s an example of the rebate information for tax.

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.

What is excess private health insurance entitlement? 

Excess private health insurance entitlement happens when the rebate you receive during the year doesn’t match what you’re actually entitled to based on your final income.  

In simple terms, you’ve either claimed too much rebate or not enough, and it gets evened out at tax time. This usually happens when your income estimate is off. 

  

How it shows up in your Notice of Assessment 

At tax time, the ATO reconciles: 

• The rebate you received through your premiums, and 
• The rebate you were actually entitled to based on your income 

You’ll see this as: 

• A reduction or increase to your private health insurance rebate, or 
• An adjustment to your final tax position (either owing more or getting a refund) 

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 (pay rise, bonus, job change). You should update your income tier with Frank as soon as possible as this could affect your private health insurance rebate and it doesn’t happen automatically. 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. You can do this anytime - no need to wait for tax time! 

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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 $105,000 as a single, or $210,000 (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. Having private health insurance doesn't mean 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 when completing your tax return 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).

Learn more about why you might need private health insurance for tax.

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.

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.

FAQs about the rebate