Guide to the private health insurance benefit code

If you have private health insurance, you could be eligible to receive a private health insurance rebate as part of your annual income tax return.

The government rebate aims to make private health insurance more affordable, but you need a private health insurance benefit code to claim it.

What is a benefit code for private health insurance?

The Australian Tax Office (ATO) uses a private health insurance benefit code to apply your private health insurance rebate when you complete your annual income tax return. 

The health insurance benefit code that applies to you is used to calculate your rebate based on the age of the oldest person on the policy and the private health insurance premiums you paid for during the financial year. 

What is the Australian government rebate on private health insurance?

The Australian government offers most private health insurance policyholders an rebate that aims to make private health cover more affordable.  

This rebate can typically be claimed as an annual sum through your tax return, or used to reduce the monthly premiums you pay to your health fund. 

Either way, you need an Australian government rebate on private health insurance benefit code to be eligible. 

How much is the Australian government rebate on private health insurance? 

The private health insurance rebate you receive depends on your age and income. 

In most cases, the rebate percentage you receive increases with age. So if you're older than 65 you'll likely receive a higher rebate. 

The rebate you receive also tends to change with your income. Typically, the more you earn, the lower your rebate. High-income earners may not receive any rebate. 

Am I eligible for the private health insurance rebate?

According to the ATO, in order to claim the private health insurance rebate, you must:

• Have a complying health insurance policy with an Australian-registered health insurer

• Be eligible for Medicare

• Be a private health insurance incentive beneficiary (this is any adult who is covered by a health insurance policy)

• Have an income for surcharge purposes that is less than the Tier 3 income threshold ($144,001 or more for singles, or $288,001 or more for families)

What is my private health insurance benefit code? 

Your health insurance benefit code is assigned according to your age (or the oldest person listed on your health insurance policy), and the period during which your health insurance premiums were paid. 

Table: Benefit codes for private health insurance

How to find benefit code for private health insurance?

Your health insurance benefit code can usually be found on the annual tax statement your health insurer sends you so you can complete your tax return. 

However, if you submit your tax return online via the myTax portal, or through an accountant or tax agent, your health insurer may not send an annual tax statement directly to you. 

In these cases, your benefit code may be electronically submitted and pre-filled into your online tax return form. 

If you’re still having trouble finding your health insurance benefit code, contact your health insurer.

What if I don’t have a benefit code for private health insurance?

If you didn’t have private health insurance or appropriate hospital cover during the preceding financial year, you may not be eligible for a benefit code. 

In that case, you might have to pay the Medicare Levy Surcharge (MLS). The MLS is calculated as a percentage of your taxable income, depending on how much you earn. 

People with private health insurance do not have to pay the MLS.

Table: Medicare Levy Surcharge rate

Is a tax claim code the same as a benefit code?  

You’ll need your tax claim code and your health insurance benefit code to complete your tax return, but they have slightly different roles.

Your benefit code helps the ATO calculate which rebate percentage is applicable to you based on your age (or the age of the oldest person listed on your policy). 

Your tax claim code is similar in that it helps the ATO calculate which rebate percentage is applicable to you based on your relationship status and dependents.  

Like your health insurance benefit code, your tax claim code is supplied on your annual tax statement from your health insurer, or pre-filled in your online tax return via the myTax portal.

Key terms

• Health insurance tax statement: Your health fund may send you an annual document that lists the premiums you’ve paid throughout the financial year, and includes your health insurance benefit code and tax claim code. 

• myTax portal: A website you can use to submit your annual income tax return online. It is part of the myGov platform.

• Medicare Levy Surcharge: An annual fee you may have to pay if you earn more than $93,000 (for singles) and don’t have private health insurance.

Additional resources

• Calculate your private health insurance rebate. 

• Learn more about your private health insurance rebate eligibility.

• Understand how to read your private health insurance statement.

• Learn how to lodge your annual tax return online.

• Find out if you have to pay the Medicare Levy Surcharge.

Sources

Private health insurance rebate eligibility, Australian Taxation Office

Private health insurance incentive beneficiary, Australian Taxation Office

Income thresholds and rates for the private health insurance rebate, Australian Taxation Office Your private health insurance statement, Australian Taxation Office,

Lodge your tax return online with myTax, Australian Taxation Office

Paying the Medicare levy surcharge, Australian Taxation Office,

Medicare levy surcharge income, thresholds and rates, Australian Taxation Office,

*Compare Club compares selected products from a panel of trusted insurers. We do not compare all products in the market. This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.