To make private health insurance more affordable, the Federal Government provides many Australians with a rebate, known as the Australian Government Rebate on Private Health Insurance (AGR).
Each year the Government provides health funds with a rebate adjustment factor which will be applied to each member’s premium (after any applicable discounts) and determined by their income tier and age. The adjusted rebate will automatically apply to any premium payments made on or after 1 April each year including members who aren't up to date with their payments. The rebate can be used to reduce your premiums, or claimed when you lodge your tax return with the Australian Taxation Office.
Please note that if you have a Lifetime Health Cover (LHC) loading, the rebate is not claimable on the LHC loading component of your premium.
Who is eligible for a rebate?
If you earn an income of $144,000 or less as a single, or $288,000 or less as a family (see table below) you are eligible for the rebate. All the people listed on the health insurance policy must be eligible to claim Medicare for you to receive the rebate.
How much is the rebate?
If you are 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 2023/2024 financial year:
|Income for the 2023/2024 financial year||Age < 65||Age 65-69||Age 70+|
|Base Tier||$93,000 or less||24.608%||28.710%||32.812%|
|Tier 3||$144,001 or more||0%||0%||0%|
Source: Australian Tax Office. These thresholds will apply to individuals from 1 July 2023. 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 2023/2024 financial year||Age < 65||Age 65-69||Age 70+|
|Base Tier||$186,000 or less||24.608%||28.710%||32.812%|
|Tier 3||$288,001 or more||0%||0%||0%|
Source: Australian Tax Office. These thresholds apply to couples, families and single parent families from 1 July 2023. 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 Tax Office.
Frequently asked questions
Q: How do I claim the Australian Government Rebate?
A: Most eligible members claim the rebate upfront as it reduces the amount they pay nib. By letting us know which income bracket you fall into we can apply the corresponding rebate to your policy.
You can nominate your level of rebate by logging into Online Services and selecting Government Rebate or calling nib on 13 16 42.
Other options for claiming the rebate:
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.
Q: What if I pick the wrong tier?
A: If you choose to receive the Australian Government Rebate as a reduction on your premium, you'll need to select an income tier so the correct rebate level can be applied. As this income tier is an estimation for your earnings in the full financial year, you may earn more or less than this amount by the time June 30 rolls around. There are no penalties for choosing the wrong tier but you may need to factor in a financial adjustment at tax time.
If you earn more than the tier you selected, you probably won't be eligible for as much of a rebate and you may need to pay back the difference in your tax return. If you earn less than this income tier and are eligible to receive a higher rebate, you may receive this when you finalise your tax at the end of the financial year.
Q: Does this impact the Medicare Levy Surcharge?
A: If you earn more than $93,000 annual taxable income for singles and $186,000 combined for couples, families and single-parent families, you may also be impacted by the Medicare Levy Surcharge.
Q: What if I’m an Overseas Visitor?
A: The Australian Government Rebate only applies to nib's domestic health covers. The AGR can be applicable to overseas visitors living and working in Australia, who have taken out an nib domestic health cover for tax purposes. Contact us for 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.