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Guides / PHI Rebate Tiers 2025-26

Private Health Insurance Rebate Tiers 2025-26

Updated March 2026 · 6 min read

The Australian Government provides a rebate on private health insurance premiums. The rebate reduces the amount you pay for your policy, and the percentage you receive depends on your age and income. The rebate applies to hospital cover, extras cover, and combined policies.

Below are the rebate percentages for the 2025-26 financial year (effective from 1 April 2025).

2025-26 Rebate Percentages

TierSingles incomeFamilies incomeUnder 6565-6970+
Base Tier$97,000 or less$194,000 or less24.608%28.710%32.812%
Tier 1$97,001 - $113,000$194,001 - $226,00016.405%20.507%24.608%
Tier 2$113,001 - $151,000$226,001 - $302,0008.202%12.303%16.405%
Tier 3Over $151,000Over $302,0000%0%0%
Family threshold note

For families, the income thresholds increase by $1,500 for each dependent child after the first child.

What the Rebate Means in Dollars

The rebate is expressed as a percentage of your premium. For example, if you are a single person under 65 earning $85,000 per year (Base Tier), and your combined policy costs $250 per month, the rebate reduces your premium by 24.608%, saving you approximately $61.52 per month. You would pay $188.48 per month instead of $250.

For a couple both aged 70+ on the Base Tier with a family policy costing $500 per month, the 32.812% rebate saves approximately $164.06 per month, reducing the premium to $335.94.

How to Claim the Rebate

There are two ways to receive the rebate:

Option 1: Premium reduction (most common)

Notify your health fund of your estimated income tier and they will reduce your premium by the rebate amount. You pay less each month. If your actual income differs at tax time, the ATO adjusts accordingly.

Option 2: Tax return claim

Pay the full premium throughout the year and claim the rebate as a tax offset when you lodge your tax return. This method means you pay more upfront but receive the full amount back at tax time.

Age Group Definitions

The rebate increases with age to reflect higher healthcare costs for older Australians. Your age is assessed as at 1 July of the financial year. The three age groups are: under 65, 65 to 69, and 70 and over. Each group receives a progressively higher rebate percentage within the same income tier.

For couples or families where partners are in different age groups, the rebate is calculated based on the older person's age group for the hospital component, and each individual's age for the extras component.

Frequently Asked Questions

How do I claim the PHI rebate?
You can claim the rebate in two ways. The most common is as a premium reduction, where you nominate your rebate tier with your health fund and they reduce your premium accordingly. Alternatively, you can pay the full premium and claim the rebate when you lodge your tax return. Most people choose the premium reduction method for simplicity.
What income is used to determine my rebate tier?
Your rebate tier is based on your income for surcharge purposes, which includes taxable income, reportable fringe benefits, total net investment losses, and reportable super contributions. For families, the combined income of both partners is used.
Does the rebate apply to both hospital and extras cover?
Yes. The Australian Government rebate applies to both hospital cover and extras (general treatment) cover, as well as combined policies. The rebate percentage is the same regardless of the type of cover.
Do the rebate percentages change each year?
Yes. The government reviews the rebate percentages annually, typically adjusting them on 1 April each year. The adjustment is based on the increase in private health insurance premiums. Income thresholds are also reviewed periodically.
What if I nominate the wrong rebate tier?
If you nominate a higher rebate tier than you are entitled to (i.e., your income is higher than expected), you may need to pay back the excess rebate through your tax return. If you nominate too low, you will receive the balance as a tax offset. It is important to update your tier with your fund if your income changes significantly.

See your actual rebate on real plans

Compare premiums from 34 health funds with your rebate applied. Enter your age and income to see your actual cost.

See your actual rebate on real plans

General information only. This is not financial or tax advice. Rebate percentages are for the 2025-26 financial year as published by the Australian Government. Rates are reviewed annually and may change. Consult a qualified tax professional for personalised advice.