Private Health Insurance and Tax FAQs

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What's Lifetime Health Cover (LHC) loading?

People who take out hospital cover before the age of 31 and keep it can avoid the Lifetime Health Cover (LCH) loading . If you take out hospital cover after 1 July following your 31st birthday, you'll pay 2% more in premiums for each year you don't have hospital cover (up to 70%). You'll be required to pay the extra amount for 10 years. If you're already over 31, take out hospital cover as early as possible to avoid paying any extra on your premiums.

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The loading on a couple or family policy is slightly different. It’s calculated as an average between the individual loading of the 2 adults. For example, if one person has 30% loading and the other person has 0% loading, the loading applied to their policy is 15%. Each individual (policyholder and partner only) has their own loading based off their respective hospital insurance cover history.

You can be without hospital cover for up to 1,094 days (3 years less 1 day) over your lifetime, without affecting your loading. This is known as ‘Days of Absence’. If you exceed this period, you’ll pay a 2% loading if you re-join, and this will increase by another 2% for every year after that without cover. If you maintain hospital cover for 10 years, the loading will be removed.

New migrants

If you’re a new migrant to Australia, and you're eligible for Medicare and you've taken up hospital cover within 1 year from the date you’ve become eligible, you may not need to pay Lifetime Health Cover (LHC) loading. You’ll need to request a letter from Medicare which has your applicable date and send this to us to remove your LHC loading.

What’s the Medicare Levy Surcharge?

If you're single and earn more than $97,000, or a family or couple earning more than $194,000 a year (increasing by $1,500 for each dependant child after the first) from 1 July 2024, you may be required to pay the Medicare Levy Surcharge. You can avoid any additional Medicare Levy Surcharge by having an appropriate level of hospital cover.

INCOME THRESHOLDS FROM 1 JULY 2024
Australian Government Rebate tiers
Type of member	Base tier	Tier 1	Tier 2	Tier 3
Singles	< or = $97,000	$97,001 - $113,000	$113,001 - $151,000	> or = $151,001
Families*	< or = $194,000	$194,001 - $226,000	$226,001 - $302,000	> or = $302,001
Medicare Levy Surcharge
All ages	0.0%	1.0%	1.25%	1.5%

^* Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each dependant child after the first.

What’s a private health insurance rebate?

A private health insurance rebate, also known as the Australian Government Rebate, is a government contribution to help with the cost of your private health insurance.

You can claim the Australian Government Rebate (Rebate) as a reduction on your premium (this requires a completed Australian Government Rebate Application form) or as a Rebate through your annual tax return.

Learn more about the Australian Government Rebate.

No, you don’t need to report your income to your health fund; you just need to nominate your tier.

When you lodge your income tax return, the Australian Taxation Office (ATO) will determine your Rebate entitlement, which could mean you get a refundable tax offset (refund) or a tax liability (debt). 

There's no penalty for changing tiers during the financial year. If you've claimed too much Rebate, as a premium reduction or through Medicare, the ATO may seek to recover the amount. This liability will be listed on your notice of assessment.

If you haven't received your full Rebate entitlement, the ATO will calculate your Rebate and refund this to you as a tax offset when you lodge your tax return. The tax offset will be listed on your notice of assessment.

If any member of your family dies, family thresholds will continue to apply for that financial year. If a dependant child dies, any increase in the thresholds due to that child will also apply for the rest of that financial year.

Do I need to let my health fund know what my income is to determine my Rebate tier?

No, you don’t need to report your income to your health fund; you just need to nominate your tier.

What happens if I nominate an incorrect Rebate tier?

What happens if my or my family’s income tier changes during the year?

What happens if any member of our family passes away?

Can I claim any of the Rebate amounts as a reduction on my premiums?

Yes, you can receive any Rebate amount you select. But when you submit your tax return, the ATO will determine whether you've claimed a higher Rebate than you're entitled to and will seek reimbursement in your tax assessment. If you've claimed a lower Rebate than you're entitled to, you could get a refundable tax offset in your tax assessment. 

Who's entitled to the Rebate for dependant child only policies?

Parents with dependant child only cover may still be income tested and may be entitled to the Rebate. 

Is the Rebate applicable to the Lifetime Health Cover (LHC) loading?

No, the LHC loading component of your premium isn't eligible for the Rebate even if you're eligible for a Rebate overall. 

Do I need a private health insurance tax statement?

You may need it to complete your tax return. Your tax statement will confirm the number of days you had an appropriate level of hospital cover over the last financial year. If you weren't covered for the full financial year, and you fall within certain income brackets, you may be liable for the Medicare Levy Surcharge. 

Your statement will also outline premium reductions you've received due to the Australian Government Rebate on private health insurance, as well as details of any additional rebate you may be able to claim as part of your tax return. 

If you're an existing member or have had HCF health insurance during the last financial year, we'll contact you with your tax statement details. You'll be notified by SMS, email or post depending on your communication preference.

If you're an existing member, you'll also get an Annual Policy Summary. This provides a summary of your current Lifetime Health Cover (LHC) loading status and an overview of your current level of cover. You may also receive a Standard Information Statement.

Your tax statement may be mailed or emailed to you during the first 2 weeks of July (depending on your communication preference). You can also access your tax statement on the My Membership app and online member services. See how-to guides.

Tax statements include details of all payments processed by HCF up to and including 30 June. This means that we can't begin to process them until after that date. We aim to get statements out to all members as quickly as possible.

How do I get my statement?

Will I receive anything else with my statement?

When will I get my private health insurance tax statement?

Can I get a statement earlier?

Do I need my Annual Policy Summary to complete my tax return?

No. These are for your personal records.

What information from my statement do I need to complete my tax return?

You may need these details to complete your tax return:

Health insurer ID	B HCF
Membership number	C
Your premiums elilgible for Australian Government Rebate	J
Your Australian Government Rebate received	K
Benefit code	L
Other adult beneficiaries for the policy

What's Savings Provision Entitlement?

The Savings Provision Entitlement makes sure people remaining on a policy that were eligible for the Rebate don't have their Rebate amount reduced because a person aged 65 years or over leaves the policy.

Anyone who's a dependant can't inherit the Rebate that applied when the person aged 65 years or over was on the policy. 

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Important Information

Find out about our terms and conditions to use and access this site.

^* Our Life and Recover Cover products are issued by our own HCF Life insurance Company Pty Ltd. ABN 37 001 831 250. AFSL 236 806 (HCF Life). HCF Life is a wholly owned subsidiary of The Hospitals Contribution Fund of Australia Limited ABN 68 000 026 746, AFSL 241414 (HCF). Terms and conditions apply. Please read the relevant Product Disclosure Statement, Policy Document and Financial Services Guide available by calling 1800 560 855 or visiting hcf.com.au/lifeinfo, and consider your financial situation, objectives, and needs before deciding on these products as any advice provided does not take these into account. In addition to these documents, you should also read the Target Market Determination (TMD) for the product, which is available at hcf.com.au/lifeinfo. The premiums for Recover Cover products are paid to HCF Life. HCF receives commission from HCF Life for their sale of up to 40% of the first year’s premium plus an additional commission of 80% of HCF Life’s underwriting profit each year calculated as premiums less claims and expenses. HCF’s staff may receive an incentive depending on the annual premium of these products which they sell. This will not exceed 15% of the first year’s premium.

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