Private health insurance rebate 2026: tiers, percentages and how to claim
Rebate percentages from 1 April 2026 by age and income tier, the 2026–27 thresholds, premium reduction versus tax return claims, and how tax-time reconciliation works.
The private health insurance rebate is a government contribution towards your hospital and extras premium. How much you get depends on your income for surcharge purposes and the age of the oldest person on the policy. For premiums from 1 April 2026, a person under 65 at the base tier gets 24.118% of the premium back, tier 1 gets 16.079%, tier 2 gets 8.038% and tier 3 gets nothing. People aged 65–69 and 70 or over get higher percentages. Most people take the rebate as a lower premium, and the ATO checks the claim against their actual income at tax time.
This guide is part of private health insurance and Medicare explained.
Rebate percentages
| Age of oldest person covered | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Under 65 (from 1 Apr 2026) | 24.118% | 16.079% | 8.038% | 0% |
| 65–69 (from 1 Apr 2026) | 28.139% | 20.098% | 12.058% | 0% |
| 70 or over (from 1 Apr 2026) | 32.158% | 24.118% | 16.079% | 0% |
| Under 65 (1 Jul 2025 – 31 Mar 2026) | 24.288% | 16.192% | 8.095% | 0% |
| 65–69 (1 Jul 2025 – 31 Mar 2026) | 28.337% | 20.240% | 12.143% | 0% |
| 70 or over (1 Jul 2025 – 31 Mar 2026) | 32.385% | 24.288% | 16.192% | 0% |
Source: privatehealth.gov.au. The percentages are adjusted every 1 April by a rebate adjustment factor, which in practice means they drift slightly lower when average premiums rise faster than inflation.
Income tiers
| Tier | 2025–26 singles | 2025–26 families | 2026–27 singles | 2026–27 families |
|---|---|---|---|---|
| Base | up to $101,000 | up to $202,000 | up to $105,000 | up to $210,000 |
| Tier 1 | $101,001–$118,000 | $202,001–$236,000 | $105,001–$123,000 | $210,001–$246,000 |
| Tier 2 | $118,001–$158,000 | $236,001–$316,000 | $123,001–$164,000 | $246,001–$328,000 |
| Tier 3 | $158,001+ | $316,001+ | $164,001+ | $328,001+ |
Family thresholds go up by $1,500 for each dependent child after the first. These are the same tiers as the Medicare Levy Surcharge, and income is measured the same way, including reportable fringe benefits, net investment losses and reportable super contributions.
What the rebate applies to
- Hospital cover, extras cover and combined policies from registered insurers, plus ambulance-only policies from those insurers.
- Not the Lifetime Health Cover loading: the rebate is calculated on the premium before the loading is added.
- Not Overseas Visitors Health Cover.
Worked example (illustrative). A couple, both 52, have a combined hospital and extras premium of $5,200 a year before the rebate. One partner has a 10% Lifetime Health Cover loading and the other has none, so the policy loading is the average, 5%. The hospital part of the premium is $3,800, so the loading is $3,800 × 5% = $190. Their family income for surcharge purposes is $220,000 in 2026–27, so they are in tier 1 at 16.079%.
- Rebate: $5,200 × 16.079% = $836.11
- Premium paid: $5,200 + $190 − $836.11 = $4,553.89
Two ways to claim
- Premium reduction. You tell the insurer your tier and it charges you less. The government pays the insurer the difference. This is the most common choice.
- Tax offset. You pay the full premium and claim the rebate in your tax return.
You can switch between methods or change your tier with your insurer at any time. Insurers send an annual tax statement and report the details to the ATO, which normally pre-fills them in myTax.
Reconciliation at tax time
The ATO compares the rebate you received with what you were entitled to based on your actual income.
Worked example (illustrative). A single person aged 38 tells their insurer they expect $104,000 income and claims the base tier, 24.118%, on a $2,000 premium for 2026–27 (ignoring, for simplicity, the new percentages that will apply from 1 April 2027). That is $482.36 of rebate. A bonus lifts their income for surcharge purposes to $126,000, which is tier 2 at 8.038%: entitlement $160.76. At tax time they repay $321.60. Had they chosen tier 2 at the start, there would have been nothing to repay.
Because the percentage changes on 1 April and the tiers on 1 July, a single income year can involve two percentages. The ATO handles this split automatically using your insurer's statement.
Picking a tier
- Use your expected income for surcharge purposes for the current income year, not last year's.
- If your income is close to a threshold, choosing the lower rebate avoids a tax bill later; any shortfall comes back through your return.
- Check the age bracket: it is based on the oldest person on the policy, so a 66-year-old with a younger partner gets the 65–69 rate on their joint policy.
- The rebate calculator shows the dollar effect for your premium.
FAQ
Do I get the rebate on my LHC loading?
No. The rebate is calculated on the premium before the loading. See Lifetime Health Cover loading.
If I prepay a year's premium before 1 April, which rebate rate applies?
The rebate rate depends on the period the premium covers, so part of a prepayment can be rebated at the new percentage. Ask the insurer how it applies the change before prepaying.
Can I get the rebate if I am on a high income?
At tier 3 the rebate is 0% for every age group. You can still buy cover; you just pay the full premium.
Does my employer paying the premium affect the rebate?
It may be a fringe benefit, which counts towards your income for surcharge purposes. Ask your employer or a tax agent.
Sources
- PrivateHealth.gov.au — rebate percentages and income tiers by period
- Australian Taxation Office — claiming and reconciling the rebate in your tax return
- Department of Health, Disability and Ageing — annual rebate adjustment
