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Will Private Health Insurance Impact Your Tax Return?

If you’re wondering how private health insurance could impact your tax return this year, here is a general guide to health insurance when it comes to tax.  

Depending on your age, income and whether you’re single or have a family – there are different government incentives that may have an impact on your tax return, including:

  • The Australian Government Rebate (AGR) on private health insurance
  • Medicare Levy Surcharge
  • Lifetime Health Cover (LHC)

If you have health insurance, you may be eligible to receive the Australian Government Rebate to help towards your premium.
The rebate for private health insurance was put in place by the government to help people pay their premiums. The less you (and your partner if you have couple or family cover) earn, the more the government will contribute towards the cost of your cover.

You can contact your current heath fund to confirm your rebate tier is correct. Click here to find out more.

The more you earn, the more it pays to have private hospital cover come tax time.  
Most Australian taxpayers contribute to the public health system through an annual payment (known as the Medicare Levy), which is currently 2% of taxable income. Here are some key things to know:

  • The Medicare Levy Surcharge is an additional tax on high-income earners who don’t have private hospital cover.
  • If your income is below the current threshold of $90,000 for singles and $180,000 for couples, you’re exempt from the surcharge.
  • If your income is above the threshold you could avoid the surcharge by getting private hospital cover. Click here to find out more.

Are you over 31? You may be affected by Lifetime Health Cover (LHC)

If you take out private hospital cover before you’re 31, you’ll enjoy lower premiums. To get the full benefit, you need to take out private hospital cover with an Australian registered health fund by 1 July following your 31st birthday.

  • The government’s Lifetime Health Cover (LHC) initiative rewards people who get private hospital cover when they’re young.
  • Each year you wait after the age of 31 you’ll pay an extra 2% for your cover.
  • If you get hospital cover later in life, and maintain it for 10 years, the loading will be removed.

Thinking about switching your cover?
AANT members get up to $200 cashback* when you join HCF's Hospital & Extras cover. HCF were voted Australia’s most trusted private health fund 3 years in a row+.
Request a call back or Get a quote online

* Payment will be made by direct deposit up to 6 weeks after paying your first 3 months' premium. HCF will send you an email to redeem your EFT payment and you must provide your bank account details within 90 days to redeem the offer. You must not have been an HCF member 2 months prior to offer, must provide a valid email address and maintain policy after 30 day cooling off period. Limit 1 EFT payment per policy.

+ Roy Morgan Net Trust Survey 2018, 2019 and 2020.

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