The Australian Government Rebate on Private Health Insurance explained

At Australian Unity we believe health insurance should be simple to understand and useful too.

With this in mind, we've created a list of FAQs to help explain the latest government’s changes to the way your rebate is calculated.

And please remember, if you have any further questions, just to call our friendly team on 13 29 39 or contact us online. We’re here to help.

The government has made more changes to the way your rebate is calculated.

Until now when the price of your cover increased, your rebate increased by the same proportion.

From 1 April 2014 the rebate will be calculated differently. This calculation is linked to the rate of inflation and the industry average price increase. This means the value of your rebate may diminish over time. This change applies to all Australian health funds.

To help our members better understand these changes and the impact on your personal circumstances, we recommend you read the following information, and contact if you have any questions.

Frequently Asked Questions

Am I affected?

Yes, this change applies to anybody who claims the rebate.

Can I pre-pay my cover and avoid the changes?

Generally speaking, if your payment is applied to your membership before 27 March 2014, it will lock in your current rebate level for the duration of the pre-paid period.

Payments or adjustments applied to your membership after 1 April 2014 will follow the new legislation and rebate amount.

Do I have to register for the rebate?

Yes. To be sent a Rebate Application form, call us on 13 29 39. Alternatively, visit Online Member Services and apply online.

If you choose not to nominate a tier, or you nominate an incorrect tier, the ATO will correct any over or under payment of your rebate in your annual tax return in the form of a tax refund or liability.

What is Income Testing?

On 1 July 2012, The Australian Government Rebate on Private Health Insurance became income tested.

This means the rebate you receive to discount the cover’s price is affected by a variety of factors, including your age, income and the number of children covered under your policy.

Who is income tested for the Australian Government Rebate?

Each adult on the policy will be income tested to determine what their share of the price paid is how much rebate they will receive. You will need to nominate an income tier based on the amount you earn, see the table below:

Rebate table

Who is classified as a dependent child for entitlement to the rebate?

A dependent child is classified as being:

under 23 years of age


aged between 23 and 25 years of age and engaged in full-time study or undertaking a trade apprenticeship. They cannot be married or in a de facto relationship.

What happens if my tax or financial circumstances change during the year?

To change your selected rebate tier, call us on 13 29 39 or visit Online Member Services.

Can I claim the rebate at tax time?

Yes. You can claim the rebate as a reduction to the price of your health insurance or get the money back as a tax credit in your annual tax return.

Where can I get more information?

You can find more technical information at the Department of Health website,

Update your Australian Government Rebate tier

 Notify us of your Rebate Tier by accessing Online Member Services and selecting "Update your Rebate Tier".

Medicare Levy Surcharge (MLS)

The MLS is an additional tax of between 1.0% and 1.5% paid by singles, couples and families who don’t have private hospital cover and who have taxable incomes over a certain thresholds.

As of the 2014/15 financial year, the MLS is applied to the following income thresholds:

Rebate table

Tell me more about the MLS

Lifetime Health Cover (LHC) loading

The LHC loading applies if you didn’t have private hospital cover

before 1 July 2000


before the 1st of July following your 31st birthday (whichever is later) you pay 2% extra, plus an extra 2% for every year after this date you didn’t have it.

This additional amount is known as your LHC loading.

For example, if you took out hospital cover in 2008 as a 40 year old, you would pay a 20% LHC loading on top of the standard price of your hospital cover.

Important notes

You stop paying the loading after you’ve paid for hospital cover for ten continuous years.

The maximum loading amount is 70%.

Recent changes to the way the LHC is calculated

If you earn under $140,001 as a single or $280,001 as a family, you may be entitled to receive the Australian Government Rebate on Private Health Insurance.

This rebate can reduce the price of your cover depending on your age and income.

Up until 1 July 2013, this rebate was applied to your LHC loading.

From 1 July 2013, the rebate will no longer apply to the LHC loading part of your cover's price, and now everyone who pays the loading has to pay all of it.

Tell me more about the LHC loading