Government programs you should know a little about

Healthcare is an expensive business, and to help pay for it the government tries to encourage people to have at least some form of private health insurance through three key programs. It’s worthwhile having at least a basic understanding of how these work. One will save you money, and two could cost you money – three good reasons to spend a few minutes reading up about them.

The Australian Government Rebate on Private Health Insurance
Because the government believes that private health insurance is good for you, it’s prepared to pick up some of the tab! Depending on your age, income and the number of dependent children you have, the government will chip in up to 37.09% of the cost of your health cover.

The Australian Tax Office sets a range of income tiers that will determine what ‘base level’ of rebate you’re eligible for, and this increases for people in the over 65 and over 70 age groups. For the 2014/15 financial year, anyone with an income below $90,000 a year as a single or $180,000 a year as a family will automatically be entitled to a 27.82% rebate (32.46% or 37.09% for older people). Anyone earning over those amounts will be entitled to a lower level of rebate, applied on a sliding-scale basis.

Visit the Australian Tax Office website for more information, and, if you’re a higher income earner, to find out which income tier applies to you,

The Medicare Levy Surcharge
Most of us pay a Medicare Levy through our income tax. It helps to fund the public health system. People who earn over certain amounts, and who don’t have private hospital cover (extras cover doesn’t count) have to pay an additional tax which is called the Medicare Levy Surcharge. The amount of the surcharge increases on a sliding-scale basis as your income increases: the higher your income, the higher the amount of surcharge you will pay if you don’t have private hospital cover.

Visit the Australian Tax Office website for more information, and, if you’re a higher income earner, to find out which income tier applies to you,

Lifetime Health Cover
Lifetime Health Cover is designed to encourage people to take out private hospital cover early in life and to keep it.

Basically, if you join private hospital cover by the 30th of June following your 31st birthday, then you pay the ‘base rate’ that the health fund you join offers. For every year you are over 31 when you join, you add a 2% loading to the base rate. The loading only applies to hospital cover, not extras or ambulance cover. If you do get stuck with a loading, it’ll be yours for the next ten years. After ten continuous years of cover, you are rewarded by having the loading removed. 

Find out more
This is summary information only. If you have specific questions about any of these programs, please give us a call. You can also read much more on the Department of Health and Ageing website, or the Australian Tax Office website,

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The materials on this website have been prepared for general information only. The information on this website, or any other website accessed via this website or otherwise, may not be accurate, complete or current. rt health fund ltd does not accept any liability to any person for the information that is provided.