The Australian Government and PHI

Australian Government Rebate

Most Australians with private health insurance receive a rebate from the Australian Government to assist with the cost of their private health insurance. The rebate received depends on your level of income. The income thresholds are usually reviewed and indexed by the Government each year. However, the Government has paused the indexing of the income thresholds until 30 June 2021.


  Base Tier Tier 1 Tier 2 Tier 3
Single Income $0 - $90,000 $90,001 - $105,000 $105,001 - $140,000 $140,001 +
Family Income $0 - $180,000 $180,001 - $210,000 $210,001 - $280,000 $280,001 +



  Base Tier Tier 1 Tier 2 Tier 3
Less than 65 years 24.608% 16.405% 8.202% NIL
65 to 69 years 28.710% 20.507% 12.303% NIL
70 years or older 32.812% 24.608% 16.405% NIL

The rebate can be claimed in two ways:
  1. As an upfront reduction to  your premium. To do this, you will need to complete the Australian Government Rebate Application Form. You will need to nominate a rebate tier from the above table so that we know how much rebate you wish to claim. If you need to change your rebate tier, you can nominate a new tier by calling us on 1300 651 988, by email to, visit your local St.LukesHealth customer care centre or login to Online Member Services.
  2. At the end of the financial year when you lodge a tax return. For more information about the rebate, click here or contact the Australian Taxation Office on 13 28 61.

Lifetime Health Cover

What is Lifetime Health Cover?
Lifetime Health Cover was introduced by the Australian Government on July 1, 2000 and is designed to encourage people to take out hospital cover earlier in life and to maintain their hospital cover.

How do I avoid paying a Lifetime Health Cover loading?
The lowest hospital premium you can pay is the base rate. To qualify for this base rate premium, a person needs to take out hospital cover before July 1 immediately following their 31st birthday. People who join after this date will pay an extra 2 per cent loading (in addition to the base rate) for each year they are over the age of 30, up to a maximum of 70 per cent.

Are there exemptions?
People born on or before July 1, 1934 can join a registered health insurer at any time and always qualify for the base rate premium. Other special provisions apply to people who were overseas when Lifetime Health Cover was introduced, those overseas when they turned 31, migrants, those covered by a Department of Veterans’ Affairs Gold Card and members of the Australian Defence Force.  New migrants to Australia who are aged 31 or over will not have to pay a loading providing they purchase hospital cover within 12 months of becoming eligible  for Medicare.

Can the Lifetime Health Cover loading be removed?
The Australian Government allows health funds to remove any Lifetime Health Cover loading that applies to a person after that person has held hospital cover for a continuous 10-year period.  The government recognises that people may need to stop their hospital cover for various reasons, such as during times of financial difficulty. Therefore, people can cease their hospital cover for a cumulative period of up to two years and 364 days over their lifetime, without incurring any premium loadings when they rejoin. If a member ceases their membership for three years or more, calculated over a lifetime, they will pay an additional 2 per cent loading for each full year of absence over and above the first two years when they return to hospital cover.

What happens when I change funds?
When you change funds, your Lifetime Health Cover loading moves with you. All registered health funds are obliged to recognise the certified age of any contributor wanting to transfer from another fund. The period of absence rule will apply to any gap in hospital cover if a member is not paid up to date with their previous fund.

For more information about Lifetime Health Cover, visit

Medicare Levy Surcharge

The Medicare Levy Surcharge is an additional surcharge imposed on people earning above defined income thresholds, who are eligible for Medicare but do not hold an appropriate level of private hospital cover.
For families with children, the above income thresholds increase by $1500 for each child after the first. The income thresholds are usually indexed by the Government each year however, as part of the 2016-17 Federal Budget, the Government paused the indexing of the income thresholds until 30 June 2021. People earning above the threshold amounts may avoid paying the Medicare Levy Surcharge by taking out an appropriate level of private hospital cover with a registered health insurer. An appropriate level of private hospital cover is defined as one that does not have an excess greater than $750 for single members or greater than $1500 for couples, single parents or family members.


  Base Tier Tier 1 Tier 2 Tier 3
Single Income $0-$90,000 $90,001-$105,000 $105,001-$140,000 $140,001+
Family Income $0-$180,000 $180,001-$210,000 $210,001-$280,000 $280,001+
Medicare Levy Surcharge NIL 1.00% 1.25% 1.50%

If a couple’s combined taxable income exceeds the couple’s threshold, both parties must hold appropriate private hospital cover to avoid paying the Medicare Levy Surcharge. If only one of the couple holds private hospital cover and the other does not, the Australian Taxation Office will require both parties to pay the additional levy.

For more information on the Medicare Levy Surcharge, visit

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