Australian Government Rebate on private health insurance
The Australian Government Rebate (also known as the AGR) is a contribution from the Australian Government that helps reduce the cost of private health insurance premiums. The rebate is income-tested and varies based on your income, age and family status. It can be applied directly to your premium or claimed at tax time.
What is the Australian Government Rebate?
The Australian Government Rebate is a contribution from the Australian Government that helps reduce the cost of your private health insurance. The rebate is income tested and varies based on:
your income
your age
whether you are single or part of a family
You can receive the rebate as a discount on your premiums or claim it later when you complete your tax return.
If you have a Lifetime Health Cover (LHC) loading the rebate is not claimable on the LHC loading component of your premium.
How the rebate works
Here's how the rebate is calculated:
Your income determines your rebate tier
Your age determines the rebate percentage within that tier
The rebate is applied to your premium or claimed at tax time
If your income increases, your rebate reduces. If your income is lower, your rebate is higher.
Who is eligible for the rebate?
You may be eligible if you:
have an eligible private health insurance policy
are an Australian resident for tax purposes
earn below the highest income threshold
Eligibility is based on your income for Medicare levy surcharge purposes, not just your base salary. Learn more about the Medicare Levy Surcharge.
Your rebate is based on your income for surcharge purposes, which may include:
taxable income
reportable fringe benefits
superannuation contributions
investment losses
This means your rebate tier may be different from what you expect if you only consider your salary.
Rebate income thresholds and percentages
Your rebate depends on your income tier, age and family status. If you're eligible for the rebate, use the below table to find out which rebate you fall into and what percentage of your premium the Australian Government will cover.
Income and age tiers for the Australian Government Rebate
Rebate for singles based on your age and taxable income for the 2026/2027 financial year:
Income for the 2026/2027 financial year | Age < 65 | Age 65-69 | Age 70+ | |
|---|---|---|---|---|
Base Tier | $101,000 or less | 24.118% | 28.139% | 32.158% |
Tier 1 | $101,001 - $118,000 | 16.079% | 20.098% | 24.118% |
Tier 2 | $118,001 - $158,000 | 8.038% | 12.058% | 16.079% |
Tier 3 | $158,001 or more | 0% | 0% | 0% |
Source: Australian Tax Office. These thresholds will apply to individuals from 1 April 2026. There are specific rules for calculating income for Australian Government Rebate purposes. For more information visit the Australian Tax Office.
Rebate for couples, families and single parent families (based on the age of the oldest person on the policy and your combined annual taxable income):
Combined income for the 2026/2027 financial year | Age < 65 | Age 65-69 | Age 70+ | |
|---|---|---|---|---|
Base Tier | $202,000 or less | 24.118% | 28.139% | 32.158% |
Tier 1 | $202,001 - $236,000 | 16.079% | 20.098% | 24.118% |
Tier 2 | $236,001 - $316,000 | 8.038% | 12.058% | 16.079% |
Tier 3 | $316,001 or more | 0% | 0% | 0% |
Source: Australian Tax Office. These thresholds apply to couples, families and single parent families from 1 April 2026. Thresholds increase by $1,500 for each dependant child after the first. There are specific rules for calculating income for Australian Government Rebate purposes. For more information visit the Australian Taxation Office.
How do I claim the Australian Government Rebate?
You have a few options for claiming the Australian Government Rebate/
1. Claim it as a premium reduction
Most people choose to receive the Australian Government Rebate as a premium reduction. This means the rebate is applied directly to your policy, so you pay less for your private health insurance throughout the year. To apply the correct rebate, you need to tell nib your expected income tier. Your rebate amount will be based on this estimate.
How to set or update your rebate
You can nominate or update your rebate tier at any time:
Log in to your member account or the nib App and select ‘Australian Government Rebate’
Or call nib on 13 16 42
Read our help guide on changing your rebate tier
Important to know
Your rebate is based on your income for Medicare Levy Surcharge purposes, not just your salary
If you choose the wrong tier, it will be adjusted at tax time by the Australian Taxation Office
Updating your tier during the year can help avoid unexpected adjustments later.
Claiming the rebate at tax time
Receive a rebate from nib which is higher than what you're entitled to from the Government. If you do this you may need to pay back the difference over and above your entitlement in the form of a tax bill when you lodge your tax return
Receive a rebate from nib which is lower than what you're entitled to from the Government. If you do this you should see the difference returned to you when you lodge your tax return
Choose not to receive any rebate upfront from nib and claim your entire entitlement from the Government (if eligible) when you lodge your tax return.
Frequently asked questions
More information
The rebate percentages are set annually on 1 April by the Federal Government.
To find out how they are calculated and the specific rules about defining your income for Australian Government Rebate and Medicare Levy Surcharge purposes, get in touch with your accountant, financial planner or visit the Australian Taxation Office website for more information.