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How the Health Insurance Rebate works
The Federal Government 30% Rebate on Private Health Insurance was introduced on 1 January 1999 and replaced the Private Health Insurance Incentives Scheme (PHIIS) which ended on 31 December 1998.
From 1 April 2005, legislation took effect that enhanced the amount offered under thefor older Australians. In effect, the value of the rebate is now age dependent.
Eligible members up to the age of 64 years are entitled to a 30% rebate on the total cost of their Private Health Insurance premiums. For example a family paying $2,000 a year for their private health insurance will get a rebate of $600. Someone paying $2,500 will receive $750 back. A $1,000 premium will be cut by $300, and a $500 premium will be cut by $150.
From 1 April 2005, the Private Health Insurance Rebate for a person aged 65 – 69 years increased from 30% to 35%, and the rebate for a person aged 70 years and over increased to 40%.
The level of rebate on a policy is determined by the age of the oldest person covered under the policy and applies to the total premium of the policy.
The Act includes a savings provisions to ensure that a change in family circumstances will not lead to overpayments and a debt to the Commonwealth. Where a person is entitled to an increased rebate because someone else on the policy is 65 or older, he or she will continue to be entitled to the higher rebate if the older person leaves the policy, for example due to death, divorce or separation. This entitlement ceases if the person takes out a policy that covers another person who was not on the original policy (other than adding a dependent child). The savings provisions will not apply where its application would result in less rebate being payable.
The rebate is applicable to the cost of private health insurance premiums for, ancillary cover and a combination of both. It is available irrespective of family type or income.
It is available as a premium reduction from most registered Health Funds, or as a direct payment from any Medicare office, or as a rebate on your tax return.
There is no minimum premium amount. The rebate is available for all health insurance premiums paid to registered health funds.