Changes to the income thresholds for the private health insurance rebate
On 1 July 2023, the income thresholds that are used to calculate the private health insurance rebate increased – by around $3,000 for singles and $6,000 for families.
These increases mean that depending on your income level, you may be eligible for a higher rebate on your private health insurance. You could pay less towards your health insurance premium or get more back at tax time, depending on how you claim it.
New tiers from 1 July 2023:
Medicare Levy Surcharge income tiers from 1 July 2023
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| Base tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Singles | $93,000 or less | $93,001-$108,000 | $108,001-$144,000 | $144,001 or more |
| Families or couples | $186,000 or less | $186,001-$216,000 | $216,001-$288,000 | $288,001 or more |
| Surcharge | 0.0% | 1.0% | 1.25% | 1.5% |
Note: The family income threshold is increased by $1,500 for each Medicare levy surcharge dependant child after the first child
What do you need to do?
You can call us to update your rebate tier if it needs to change based on these new income thresholds. If you claim the rebate as a premium reduction, this change means your next premium payment will be lower. If you do nothing now or claim your rebate as a tax offset, your income will be calculated at tax time to determine your correct rebate entitlement and you may get more money back.
How does the rebate work?
The private health insurance rebate is an income tested government initiative that helps to cover the cost of premiums and encourage more Australians to take out and keep private health cover.
If you are eligible for the rebate, there are two ways you can claim it: as a premium reduction – meaning you pay less when your health insurance premium is due – or as a tax offset when lodging your annual tax return. Your rebate entitlement depends on your family status at 30 June.
You can change your tier at any time; if you get a pay rise, take a pay cut or your family circumstances change. If your nominated tier doesn’t match your actual income at tax time, you’ll either receive a tax offset through your return for that year or will owe money, depending on whether you’re on a higher or lower tier than your actual income for the year.
Turn 65 or 70 recently? You may have noticed a reduction in your premium. This is because the rebate increases when you turn 65, and again at 70.
This change in income thresholds has also been applied to the Doctors’ Health Fund eligibility criteria for covering dependants. A dependant or dependant with disability can now remain on a family or single parent policy if they earn less than $93,000 per year, rather than $90,000 per year.
As these changes came into effect 1 July 2023, they will have no impact on your tax return for the 2022-23 financial year. Read more detailed information from the ATO about this rebate.
Important disclaimer: The material contained in this publication is of general nature only. It is not, nor is intended to be legal, accounting, tax or financial advice. The Doctors' Health Fund Pty Ltd and its related entities have not considered your individual objectives, financial situation and needs in providing this information. If you wish to take any action based on the content of this publication, we recommend that you seek appropriate professional advice. While we endeavour to ensure that this information is as current as possible at the time of publication, we take no responsibility for matters arising from changed circumstances, information or material. Doctors' Health Fund and its related entities will not be liable for any loss or damage, however caused (including through negligence), that may be directly or indirectly suffered by you or anyone else in connection with the use of information provided.
