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Incentives and Rebates

Incentives and Rebates

Whatever your age or stage

No matter where you are in life, there's a good reason to have private health insurance.

If you earn over $90,000 a year as a single or $180,000 as a couple, there are a few very compelling reasons to take out Hospital cover. These include the Medicare Levy Surcharge (MLS) and, depending on your age, Lifetime Health Cover (LHC). There is also the Australian Government Rebate on private health insurance but you may be ineligible for this rebate if your salary is in the highest tier.

If you're a higher income earner, Hospital cover makes even more sense as you get something back for the extra expense, as opposed to paying more tax for no return. On top of that, it’s important to remember that it’s not just older people who get unexpectedly sick, or have an injury that requires hospital treatment. 

Avoid the Government Charges

If you don't have private health insurance, you could pay a government surcharge
Medicare Levy Surcharge (MLS)

The Medicare Levy Surcharge (MLS) is a levy paid by Australian tax payers who do not have private hospital cover and who earn above a certain income. The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public Medicare system.

The surcharge covers you and your dependents.  Your dependents include:

  • your spouse;
  • any of your children who are under 21 years of age; or
  • any of your student children who are under 25 years of age.

For more information about who is considered a dependant for MLS purposes, you can refer to the ATO's Medicare Levy Surcharge page.

The surcharge is calculated at the rate of 1% to 1.5% of your income for Medicare Levy Surcharge purposes. It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers. To work out your annual income for MLS and Rebate purposes, you can refer to the Australian Taxation Office's Private Health Insurance Rebate Calculator or contact the ATO directly.

The surcharge levels applicable from 1 April 2020 to 31 March 2023* are:

  Base tier Tier 1 Tier 2 Tier 3
Single income


$90,001 -105,000 $105,001-140,000 >$140,001
Family income <$180,000 $180,001 - 210,000 $210,001 - 280,000 >$280,001
Medicare Levy Surcharge
All ages 0.0% 1.0% 1.25% 1.5%


Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

*The income thresholds are indexed and will remain the same to 30 June 2023.

Currently, you have to pay the surcharge if you are:

  • a single person with an annual taxable income for MLS purposes greater than $90,000; or
  • a family or couple with a combined taxable income for MLS purposes greater than $180,000. The family income threshold increases by $1,500 for each dependent child after the first;
  • and do not have an approved hospital cover with a registered health insurer.

For additional information about the Medicare Levy Surcharge, you can visit www.privatehealth.gov.au or the ATO website.

Lifetime Health Cover (LHC)

Lifetime Health Cover (LHC) is a Government initiative that started on 1 July 2000. It was designed to encourage people to take out hospital cover earlier in life and encourage them to maintain it.

If you purchase hospital cover earlier in life, and keep it, you will avoid paying an extra amount called 'LHC loading'.

In some cases you may be exempt from LHC loading or fit into a special circumstances category.

If you are joining or transferring between insurers, or if you fit into one of the new migrant or special circumstances categories, you will need to establish your LHC loading by supplying supporting documents.

LHC loadings only apply to hospital cover.

General treatment (extras) cover, Overseas Visitors Health Cover, Overseas Student Health Cover, and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.

For more information about LHC, please visit www.privatehealth.gov.au.

Do you qualify for a Government Rebate?

Did you know the Government provides rebates to help pay for the cost of private health insurance
Australian Government Rebate on private health insurance

Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested.

The rebate applies to hospital, general treatment and ambulance policies. It does not apply to overseas visitors health cover. 

To see a table of current rebate amounts click here.

Two very good online resources for additional information about the Australian Government Private Health Insurance Rebate include www.privatehealth.gov.au or the ATO website.

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