Private health insurance

In the 2009-10 Budget, the government announced a proposal to income test the private health insurance rebate.

From 1 July 2012, the private health insurance rebate and the Medicare levy surcharge are income tested against three income tier thresholds.

Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase.

Your income threshold calculation is based on the definition of income used to calculate Medicare levy surcharge for individuals or families. The Private health insurance rebate calculator will help you work out your estimated income and the rebate percentage for your estimate income threshold. The 2012-13 income thresholds are provided in the table below.

	Unchanged	Tier 1	Tier 2	Tier 3
Singles	$84,000 or less	$84,001-$97,000	$97,001-$130,000	$130,001 or more
Families	$168,000 or less	$168,001-$194,000	$194,001-$260,000	$260,001 or more
Rebate
Aged under 65	30%	20%	10%	0%
Aged 65-69	35%	25%	15%	0%
Aged 70 or over	40%	30%	20%	0%
Medicare levy surcharge
Rates	0.0%	1.0%	1.25%	1.5%

Media release

For more information, refer to the media release issued by the Treasurer and Minister for Health and Ageing as part of the 2009-10 Budget.

Legislation and supporting material

The legislation received royal assent on 4 April 2012:

• Fairer Private Health Insurance Incentives Act 2012
• Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Act 2012
• Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Act 2012
• Explanatory Memorandum.

More information

For more information, refer to Private health insurance and Medicare levy surcharge changes.