If private health cover is voluntary in Australia, then what are Private Health Insurance (PHI) tax statements for?
To put it simply, the data in PHI tax statements are used by the Australian Taxation Office (ATO) to determine two things:
- Whether you’re eligible for the Private Health Insurance Rebate
- Whether the Medicare Levy Surcharge (MLS) applies to you
Understanding what’s included on this statement makes it easier to prepare your tax return and assess the impact of private health cover on your tax position. While private health insurance is not mandatory for Australian citizens and permanent residents, there are a few key points to consider when it comes to tax.
Please note that any content shared in this article only applies to Australian citizens and permanent residents and should not be taken as financial advice.
What’s on a PHI Tax Statement?
- The number of days you held an eligible hospital policy during the financial year
- Premiums eligible for the Australian Government rebate
- The rebate amount you received during the financial year
- A benefit code used for ATO processing (sometimes called your tax claim code for private health insurance)
- Names of any other adult beneficiaries listed on your policy
HIF tax statements for the 2024/25 financial year will be ready for members to download from their Online Member Centre on 3 July 2025, which you can log in to at member.hif.com.au
HIF also provides tax statement data directly to the ATO, which typically becomes available in late July. Once finalised, your HIF tax details will be available via the ATO portal.
It is important to note that the ATO does not receive the following information on PHI Tax Statements:
- Details about the level or tier of your private health insurance policy (e.g., Basic, Bronze, Silver, Gold).
- Any claims history or data on services you’ve used under your private health insurance policy.
How It Affects Your Tax Return
The ATO may use the information in your PHI tax statement to assess a range of tax-related items, including the following:
1) Australian Government Rebate on private health insurance (AGR)
This is a rebate the Australian Government provides to help cover the cost of private health insurance. The rebate can be applied to domestic hospital, extras, and ambulance cover for most Australians. It can be claimed as either a reduction in your private health insurance premiums, or as a tax refund at the end of the financial year.
Eligibility for the private health insurance rebate depends on your circumstances, including your policy and income.
As per the Australian Taxation Office, to claim the private health insurance rebate, you must:
- Have a complying private health insurance policy with an Australian-registered health insurer
- Be eligible for Medicare
- Be listed as a private health insurance incentive beneficiary on the policy
- Have an income for surcharge purposes that is below the Tier 3 threshold
You can receive the rebate:
- As a reduced premium through your health insurer
- Or as a refundable tax offset when you lodge your return
Your PHI tax statement confirms the rebate amount (in dollars) you received as a payment toward your policy during the financial year.
You can check your eligibility or estimate your rebate using HIF’s rebate guide. And, for full details on income thresholds and rebate percentages, refer to the ATO’s official page.
2) Medicare Levy Surcharge (MLS)
The MLS is a levy paid by Australian tax payers who earn above a certain income and do not have private hospital cover.
You may have to pay the Medicare Levy Surcharge if:
- You’re a single earning over $97,000, or a couple/family earning over $194,000 (for 2024–25), and
- You didn’t hold a compliant hospital policy for the full year
The surcharge ranges from 1% to 1.5% of your income. For more information about income thresholds please visit the Australian Taxation Office website.
To Summarise
If you’re asking, “Do I need private health insurance for tax purposes?” - the short answer is no, it’s not a requirement. However, private health cover may have an impact on your tax return, depending on individual factors, such as your income for MLS purposes and your eligibility for the private health insurance rebate.
From a tax reporting perspective, your private health cover is a factor the ATO considers when assessing certain sections of your annual income tax return, such as the Medicare Levy Surcharge and rebate entitlements. Your Private Health Insurance (PHI) statement reflects these details, though it won’t include claim history or detailed product information.
If you’re weighing up your options, take a moment to explore HIF’s hospital and extras cover. Just remember, when it comes to tax matters, it’s always best to check in with the Australian Taxation Office or speak with a qualified advisor. For more deep dives like this one into “Do I need private health insurance for tax purposes?”, visit our HIF Health Hub.