Aside from the peace of mind and security that comes with increased choice and quicker access to healthcare, your private health insurance could help you save come tax time.
While health insurance isn’t tax-deductible, there are a couple of incentives and rebates that can impact the price you’ll need to pay.
They are:
- - The Australian Government Rebate on Private Health Insurance (most people just call it the rebate)
- - The Medicare Levy Surcharge (MLS), and
- - The Lifetime Health Cover loading (LHC).
These don’t apply to everyone, so we’ve put together some info on each and how they might impact you.
What’s ‘the rebate’?
The private health insurance rebate is the amount the Australian Government pays towards your premium (excluding any LHC loading) to make your private health cover more affordable.
Good news - the rebate applies to Hospital cover as well as Extras cover, or to both if you have combined or separate policies.
The rebate helps to take the pressure off the public healthcare system by encouraging Aussies to take out private health cover (and keep it).
The amount of rebate you receive is based on two things:
- - the age of the oldest person covered by your policy, and
- - your (or your family’s) total taxable income.
Most people claim the rebate as a reduction on their premiums, but you can also claim the rebate at the end of each financial year when you complete your tax return.
What’s the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is an additional charge (on top of the Medicare Levy) for Aussie taxpayers who are high-income earners and don’t have private hospital cover.
The MLS is based on your income.
The table below reflects the income thresholds in place during 2023–24.
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2023–24 Income Thresholds
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Australian Government Rebate on Private Health Insurance
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Base tier
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Tier 1
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Tier 2
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Tier 3
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Single
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$93,000 or less
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$93,001 – $108,000
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$108,001 – $144,000
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$144,001 or more
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Family
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$186,000 or less
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$186,001 – $216,000
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$216,001 – $288,000
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$288,001 or more
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Medicare Levy Surcharge
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0.0%
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1.0%
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1.25%
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1.5%
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Note: The family income threshold is increased by $1,500 for each dependent child after the first child (dependent child is defined for MLS and also applicable for the rebate).
The income thresholds will change again from 1 July 2024, and are outlined in the table below.
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2024-2025 Income Thresholds
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Australian Government Rebate on Private Health Insurance
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Base tier
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Tier 1
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Tier 2
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Tier 3
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Single
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$97,000 or less
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$97,001 – $113,000
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$113,001 – $151,000
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$151,001 or more
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Family
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$194,000 or less
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$194,001 – $226,000
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$226,001 – $302,000
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$302,001 or more
|
|
Medicare Levy Surcharge
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|
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0.0%
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1.0%
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1.25%
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1.5%
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Note: The family income threshold is increased by $1,500 for each dependent child after the first child (dependent child is defined for MLS and also applicable for the rebate).
What’s Lifetime Health Cover?
Lifetime Health Cover (LHC) is an Australian Government initiative designed to encourage Aussies to take out and maintain private hospital cover earlier in life.
From 1 July following your 31st birthday, a 2% LHC loading is added to your hospital cover premium for every year you don’t have hospital cover. And you'll be required to pay this loading for 10 continuous years.
If you take out Hospital cover earlier in life (and keep it), you’ll avoid paying LHC.
Your RT Health cover
Remember, having private health cover goes far beyond the government incentives and rebate.
Nobody has a crystal ball to see what the future holds, so Hospital cover helps to provide peace of mind, knowing you’ll be covered if the unexpected happens.
And Extras cover empowers you to take control of your own health and wellbeing. Can you really put a price on that?
As your life changes, so do your health needs. Regularly assessing your cover will help you keep yourself and those you love protected. Because that’s what it’s all about.
As the end of the financial year approaches, now’s a good time to check in on your health cover.
We’d love to hear from you if you have a query or if you want to review your existing cover to make sure it’s still the right one for you.
Just give our friendly team a call on 1800 886 123 or reach out via email to help@rthealth.com.au
For further information
To find out more about the Australian Government Rebate on Private Health Insurance, Medicare Levy Surcharge or Lifetime Health Cover loading, check out the ATO website. To calculate your private health insurance rebate, see the private health insurance rebate calculator.
If you have any tax-related questions, you can call the ATO’s Personal Infoline on 13 28 61, visit the ATO website or speak to your registered tax agent or accountant.