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Private health and tax time

Wondering how your private health insurance could impact your tax return this year? Our member rewards partner HCF has put together a quick guide to help you through tax time.

Government incentives 

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)


The Australian Government Rebate

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.


Medicare Levy Surcharge

The more you earn, the more it pays to have private hospital cover when tax time comes around.

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


Lifetime Health Cover (LHC)

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?

If you’re a member with us you can get up to $300 cashback* when you join HCF's Hospital & Extras cover. In 2020, HCF was the only health insurer awarded Outstanding Value by Canstar in Tasmania.

  •    Request a call back. One of the HCF team members will call at a time that works for you.  

  •    Enquire online through HCF corporate. You'll need your member card to get started.