Private Health Insurance Rebate Thresholds

Eligibility for the private health insurance (PHI) rebate is income tested against the PHI income thresholds, which are usually adjusted annually.From 1 July 2015, the income thresholds used to calculate the PHI rebate and the Medicare levy surcharge will remain at the 2014–2015 levels for three years. That is, the income thresholds will remain at the 2014–2015 levels for 2015–2016, 2016–2017 and 2017–2018.The rebate amounts will continue to be adjusted annually on 1 April based on a “rebate adjustment factor”. The rebate adjustment factor for 2016 is 0.963, and the industry-weighted average premium increase for 2016, including rate protection, is 5.59%.

Income thresholds/status	Base tier	Tier 1	Tier 2	Tier 3
Single	$90,000 or less	$90,001–$105,000	$105,001–$140,000	$140,001+
Family	$180,000 or less	$180,001–$210,000	$210,001–$280,000	$280,001+
Age	Rebate for premiums paid, 1 April 2015–31 March 2016
Under 65	27.820%	18.547%	9.273%	0%
65–69	32.457%	23.184%	13.910%	0%
70+	37.094%	27.820%	18.547%	0%
Age	Rebate for premiums paid, 1 April 2016–31 March 2017
Under 65	26.791%	17.861%	8.930%	0%
65–69	31.256%	22.326%	13.395%	0%
70+	35.722%	26.791%	17.861%	0%
Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

Prepaid premiums If you paid for your current financial year’s entire private health insurance cover in a previous financial year, you still need to enter the private health insurance policy details in your current year’s tax return.This will confirm that you had an appropriate level of private patient hospital cover for all or part of the financial year and, accordingly, ensure that the ATO does not charge the Medicare levy surcharge.Your insurer should provide you with a private health insurance statement. This statement will assist in completing the private health insurance policy details section of your tax return.If you prepaid your insurance for 12 or more months, you may want to consider contacting your private health insurer to discuss your income and rebate tier, and nominate a different tier where necessary.There is no requirement for you to change the level of rebate you receive as a premium reduction. However, it can reduce the chance of you facing a liability next tax time.