The document summarizes the tax benefits of private health insurance in Australia. It discusses the private health insurance rebate program, which provides a rebate on premiums that varies based on income and age. It also outlines other tax advantages, such as avoiding the Medicare Levy Surcharge and Lifetime Health Cover Loading by holding an appropriate level of private health insurance. Eligibility for the rebate requires having a private health insurance policy, meeting the income threshold, and qualifying for Medicare. The document provides information on calculating rebate entitlements and where to find additional details.

1. The Tax Benefits of Private
Health Insurance

2. The Tax Benefits of Private Health
Insurance
The private health rebate is a tax benefit that is available
to the vast majority of Australia residents.
Eligibility for the rebate is tiered according to income
thresholds for singles and families.

3. The Tax Benefits of Private Health
Insurance
The rebate is calculated according to the age of the
owner(s) of the private health insurance policy.
The rebate can be claimed as:
• A reduction to your private health insurance premiums
OR
• A refundable tax offset on lodging your annual income
assessment with the Australian Tax Office.

4. To be eligible for the private health
insurance rebate:
• You must have a complying health insurance policy that
is provided by a registered health insurer.
• The policy should provide hospital or general cover, or a
combination of both.

5. To be eligible for the private health
insurance rebate:
• You need to be a private health insurance incentive
beneficiary (PHIIB), which is:
a) someone who pays for their own or their child’s private
health insurance cover OR
b) married to the other parent paying for the child’s cover.

6. To be eligible for the private health
insurance rebate:
• You need to be eligible for Medicare.
• You need to earn less than the Tier 3 annual income
threshold. (For 2014-15, that is $140,000 or less for
singles, or a combined family income of $280,000 or
less).

7. Entitlements
For premiums paid during the 2014-15 FY, your rebate
entitlement can range from a reduction of 9.68% to 38.72%
depending on your age and your income.
Entitlements are adjusted every financial year according to
increases in CPI and private health insurance premiums.

8. Other Tax Advantages
Along with a tax rebate, there are two areas of tax liability
that you can avoid when you invest in the appropriate level
of private health cover:
a) Medicare Levy Surcharge
b) Lifetime Health Cover Loading

9. Medicare Levy Surcharge
If you are not adequately covered, the MLS could be
calculated into your tax assessment. This is means tested
using a set of income thresholds.

10. Lifetime Health Cover Loading
Every year after the age of 30 that you are not covered by
a private health insurance policy will add 2% loading to
your premiums when you eventually do take out cover.
You’ll then need continuous cover for 10 years before the
loading is removed.

11. For all Private Health Insurance rebate
information
www.ato.gov.au

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