Private Health Insurance Cover & Your Tax Return

If you have private health insurance cover in Australia, you may be eligible for a tax offset. The amount of the offset depends on your age and income. While it is mandatory to have health insurance cover, there are tons of benefits that come with one.

You can have peace of mind knowing that you can get proper treatment when you need it the most. There are also a number of tax benefits that you can enjoy with private health insurance. One of the biggest benefits of having private health insurance is that you can claim a tax offset on your policy.

What Is a Private Health Insurance Rebate?

The Private Health Insurance Rebate is a government-provided rebate that helps Australians offset the cost of their private health insurance premiums. The rebate is income-tested, which means that the amount of the rebate you receive will depend on your taxable income.

If you’re eligible for the rebate, you can choose to have it paid directly to your health fund, which will reduce the amount of premium you pay, or you can claim it as a tax offset when you file your income tax return.

How much is the Private Health Insurance Cover Tax Return?

As mentioned earlier, the amount of the tax offset you’re entitled to depend on your age and income. The ATO has 4 tiers for calculating the offset, and they are as follows:

  1. Base Tier: Covers individuals who earn less than $90,000 or families with an income of less than $180,000
  2. Tier 1: Individuals earning $90,001 to $105,000 and families earning $180,001 to $210,000
  3. Tier 2: Individuals earning $105,001 to $140,000 and families earning $210,001 to $280,000
  4. Tier 3: Individuals earning more than $140,000 and families earning more than $280,000.

It is worth noting that people in Tier 3 are not entitled to any rebates from the private health insurance cover.

Age is a predominant factor in the amount of offset you can get. The following shows the different offsets for each age group:

Base Tier

  • 70 years and above: 32.812%
  • 65 to 69 years: 28.710%
  • Below 65 years: 25.608%

Tier 1

  • 70 years and above: 24.608%
  • 65 to 69 years: 20.507%
  • Below 65 years: 16.405%

Tier 2

  • 70 years and above: 8.202%
  • 65 to 69 years: 12.303%
  • Below 65 years: 16.405%

One of the most important facts to note is that the ATO adjusts these rates from year to year. As such, the rebates you will receive will vary depending on the financial year.

    Get In Touch

    Would you like to speak to one of our tax advisers? Just submit your details and we'll be in touch soon.

    How to Get the Private Health Insurance Cover Tax Return?

    If you want to receive the tax offset, you will need to file a tax return. The process is relatively simple and can be done online. You will need to provide your health insurance policy number as well as your income details.

    It is important to note that you can only make a claim for the offset if you have paid for your private health insurance premiums. If you are on a family or couple’s policy, you will need to include the details of your spouse or partner.

    Once you have provided all the required information, the ATO will calculate the amount of offset you are entitled to. The offset will then be applied to your tax return.

    The private health insurance cover tax return is a great way to reduce the cost of your premiums. If you are eligible for the offset, make sure to take advantage of it.

    Get Professional Assistance

    Your private health insurance cover return is a deduction that you should pay attention to. However, since taxation in itself is a complex matter for most Aussies, you need to engage an expert in tax matters and this is where Accurate Business & Accounting Services comes in. Talk to us today and enjoy huge savings.