Private health insurance rebate for seniors:
estimate the impact of the proposed cut to the rebate
How much could the cut to Private Health Insurance rebates cost you?
The federal government has legislation before the Parliament to reduce the higher rebate for Private Health Insurance for people 65 and over to pay for aged care, from 1 April 2027.
The private health insurance rebate is a percentage of premiums that many people receive off their private health insurance premium bill.
Reducing the rebate could increase out-of-pocket premiums by more than $1000 a year for a couple with Gold cover and force tens of thousands of seniors to drop or downgrade their insurance.
The estimator below shows the likely impact on your current policy.
If this concerns you, support our advocacy against this proposal by joining our Health Costs campaign below.
Worried about how much your premiums might increase? Concerned about further demands being put on the public health system? Join our Health Costs campaign to help us advocate against this change:
- The legislation to make the announced change to the rebate has been introduced to the Parliament, but has yet to pass either the House of Representatives or the Senate. It is called the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026. The next sitting fortnight starts on 11 August 2026.
- A Senate committee has commenced an inquiry into the Bill. The inquiry is accepting submissions until 21 August, you can read our Connect article about making a submission here. The inquiry is due to make its report by 7 October 2026.
The federal government provides a rebate for Private Health Insurance to reduce the cost of private health insurance.
This is one of several incentives and penalties used to maintain the number of people subscribed to private health insurance.
Many people receive this rebate directly off their premium, but some may receive it at tax time.
The rebate rate depends on the age of the people insured and their income.
Since 2004, people 65 year and over have received a higher level of rebate than people below this age.
The government has announced its intention to reduce this higher rebate for seniors to the level applying to those under age 65.
This is expected to increase premiums for the estimated 2.6 million seniors with Private Health Insurance cover, leading some to drop their cover - increasing the strain on the public health system.
The impact will be most significant for pensioners and low-income self-funded retirees, who will either drop or downgrade their policy or reduce spending on other essentials.
The table below shows the current rebate levels - if implemented, the likely rates are the ones in bold:
Private Health Insurance rebate, rates for July 2026 to March 2027
| Oldest person covered | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Under 65 years old | 24.118% | 16.079% | 8.038% | 0.000% |
| 65–69 years old | 28.139% | 20.098% | 12.058% | 0.000% |
| 70 years old and over | 32.158% | 24.118% | 16.079% | 0.000% |
The Private Health Insurance rebate is subject to means testing based on income. The higher the income the less the rebate.
Note that the definitions of income and family status are specific. More detail about these definitions can be found on the ATO website here.
The rebate income thresholds are indexed each year. Note that the proposed rebate change would apply from 1 April 2027, ahead of the threshold indexation from 1 July 2027.
Private Health Insurance rebate income thresholds 2026/27
| Family status | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $105,000 or less | $105,001 – $123,000 | $123,001 – $164,000 | $164,001 or more |
| Family | $210,000 or less | $210,001 – $246,000 | $246,001 – $328,000 | $328,001 or more |
The above is based on the following assumptions:
- The measure is introduced as announced, based on publicly available information, starting 1 April 2027.
- Estimation does not include annual premium increasing applying on 1 April 2027.
- Estimation does not include annual decrease to rebate level based on relative premium and inflation changes.
- The rebate levels are not changed from those applying in April 2026.
- The income tiers are as 1 July 2026 and do not reflect 1 July 2027 indexation.
The information on this page are general estimates of the potential impact based on the information available and assumptions made and is intended as educational material and not legal advice, financial advice, or other forms of professional advice. The impact will vary depending on the full financial circumstances of specific individuals or couples.
