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What is the Australian Government Rebate?

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Health Insurance Rebate

The government provides a private health insurance rebate to most individuals and families to help with the cost of private health cover, depending on your income. The rebate is also based on the age of the oldest person covered by a particular policy.

Recipients of the rebate must be eligible for Medicare and be covered by an eligible private health insurance policy.

How does my income affect my private health insurance rebate?

Eligibility to receive a private health insurance rebate depends on gross income, or combined gross income with a spouse, in a standard Australian financial year. It also depends on the age of the oldest person on the policy.

Income Tiers

Base Tier

Tier 1

Tier 2

Tier 3

Singles

 $90,000 or less  $90,001 to $105,000  $105,001 to $140,000  $140,001 or more

Family/Couples

 $180,000 or less  $180,001 to $210,000  $210,001 to $280,000  $280,001 or more

Rebate Percentage until 31 March 2017

Insured Age

Base Tier

Tier 1

Tier 2

Tier 3

Less than 65

26.791% 17.861% 8.930% 0%

65 – 69

31.256% 22.326% 13.395% 0%

70+

35.722% 26.791% 17.861% 0%

Rebate Percentage from 1 April 2017

Insured Age

Base Tier

Tier 1

Tier 2

Tier 3

Less than 65

25.93% 17.29% 8.64% 0%

65 – 69

30.26% 21.61% 12.97% 0%

70+

34.58% 25.93% 17.29% 0%

The income thresholds will remain the same from the 2015-16 financial year until 30 June 2018.
Source: www.ato.gov.au.

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How is the private health insurance rebate calculated?

Since 1 April 2014, the health insurance rebate is calculated as a percentage of eligible premium. The rebate is indexed annually by either the Consumer Price Index (CPI) growth or the industry average health insurance premium increase, whichever is lower. The rebate percentage is then adjusted every year on 1 April.

How do I access the private health insurance rebate?

The vast majority of people access the health insurance rebate by registering for the rebate at the time they take out health insurance and requesting that it is deducted from their premiums upfront. Choosewell will quote prices assuming that this is your choice. Alternatively, you can choose to claim the rebate if you’re eligible, when you complete your tax return each year.

Who is eligible for Medicare?

According to the Department of Human Services, you are entitled to Medicare cover if you:

  • hold Australian citizenship
  • hold documented New Zealand citizenship
  • have been issued with a permanent visa

Or have:

  • applied for a permanent visa, excluding an application for a parent visa
  • permission to work in Australia or
  • can prove a relationship to an Australian citizen or permanent resident

There is also a limited Medicare entitlement for visitors to Australia from overseas that have reciprocal healthcare agreements with Australia. However, these people should confirm this arrangement.

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The private health insurance rebate can be tricky to understand but Choosewell can save you and your family money. Choosewell will save you time by helping you understand how or if it applies to your personal circumstances. Call Choosewell today on 1300 421 154 and let us help you make the right decision with your health cover.

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