Private Health Insurance Rebate: 2026–27 Rates and Examples

The private health insurance rebate is the Australian Government’s contribution towards eligible private health insurance premiums. It can make hospital, extras or combined cover cheaper, but it is not one flat discount for everyone.

Your percentage depends on your income tier, the age of the oldest person covered and the date the premium is paid. The income thresholds usually change each 1 July, while rebate percentages are adjusted each 1 April.

Rebate rates from 1 April 2026 to 31 March 2027

For eligible premiums paid during this period, the published rebate percentages are:

• Base tier: 24.118% if the oldest person is under 65, 28.139% at age 65–69, or 32.158% at age 70 or over.
• Tier 1: 16.079% if under 65, 20.098% at age 65–69, or 24.118% at age 70 or over.
• Tier 2: 8.038% if under 65, 12.058% at age 65–69, or 16.079% at age 70 or over.
• Tier 3: no rebate at any age.

If people on a policy have different ages, the age of the oldest person generally sets the rate. Eligibility and apportionment can be more involved when relationships or policy membership change during the year.

Income tiers for 2026–27

The income thresholds applying from 1 July 2026 are:

• Base tier: $105,000 or less for singles; $210,000 or less for families.
• Tier 1: $105,001–$123,000 for singles; $210,001–$246,000 for families.
• Tier 2: $123,001–$164,000 for singles; $246,001–$328,000 for families.
• Tier 3: $164,001 or more for singles; $328,001 or more for families.

The family threshold increases by $1,500 for each dependent child after the first. A couple is normally assessed against the family threshold even when only one partner is named on the policy.

Worked examples

Consider a single 42-year-old with income for surcharge purposes of $90,000. They are in the base tier. If the eligible portion of their annual premium were $2,000 and all of it were paid while the 24.118% rate applied, the simple rebate calculation would be about $482.36. This is illustrative: the insurer’s statement and ATO reconciliation determine the actual amount.

Now consider a couple whose oldest insured adult is 67 and whose family income is $230,000. They sit in Tier 1 for 2026–27, so the applicable listed percentage is 20.098%. On $3,000 of eligible premium, the simple amount would be about $602.94.

If the same couple’s income rose into Tier 3, the rebate would be 0%. That change does not necessarily mean their policy changes; it changes who pays the premium cost.

How to claim the rebate

Most people choose one of two methods:

• ask the insurer to reduce premiums upfront; or
• pay the full premium and claim the rebate as a refundable tax offset.

When claiming an upfront reduction, you nominate the tier you expect to fall into. If the nomination is wrong, the ATO generally reconciles it after the income year. Claiming too much can produce a liability; claiming too little can produce a tax offset.

The rebate applies only to eligible premiums. It does not apply to the Lifetime Health Cover loading, and it can be limited by the government’s Rebate Adjustment Factor.

Income, family status and timing matter

The relevant income test is not always the figure people casually call salary. The ATO’s private health insurance income test can include taxable income, reportable fringe benefits, reportable super contributions and total net investment losses, subject to adjustments.

Family status is generally assessed at 30 June, and special rules may apply to spouses who lived apart or to dependent children. If your circumstances are complicated, use the ATO material or a registered tax agent.

Timing also matters. A premium paid in March can use a different percentage from one paid in April, even if both relate to the same policy year. Insurers usually calculate the reduction, so check the private health insurance statement rather than manually applying one annual percentage to every payment.

The rebate does not tell you whether a policy is good value

A larger rebate reduces the premium, but it does not fix a poorly matched policy. Compare the amount you pay after rebate alongside:

• hospital clinical categories included, restricted or excluded;
• excesses and co-payments;
• extras benefit limits and waiting periods;
• agreement hospitals and medical gap arrangements;
• annual and lifetime limits; and
• whether you expect to use the included cover.

Also consider the Medicare Levy Surcharge. The rebate helps with premium cost, while MLS is a separate tax setting for some higher-income people without appropriate hospital cover.

What to check when comparing premiums

Ask each fund to quote the same household, state, excess, cover tier and rebate tier. Confirm whether a displayed discount is temporary and what the ongoing premium will be. Then compare annual cost, not just the fortnightly number.

Use the CompareUs health insurance comparison checklist to organise the decision. The government’s PrivateHealth.gov.au service is the authoritative place to inspect standardised Private Health Information Statements.

Government sources

• PrivateHealth.gov.au: private health insurance rebate
• Department of Health: rebate percentages from 1 April 2026
• ATO: income thresholds and rates