Net medical expenses tax offset The net medical expenses tax offset is being phased out.From 2015Ð16 until 2018Ð19, claims for this offset are restricted to net eligible expenses for disability aids, attendant care or aged care. Net expenses are the total eligible medical expenses minus refunds from Medicare, National Disability Insurance Scheme (NDIS) and private health insurers which individuals received or are entitled to receive. This offset is income tested. If indivinduals are eligible for the offset, the percentage of net medical expenses they can claim is determined by their adjusted taxable income (ATI) and family status. Private Health insurance rebate If an individual has private health insurance cover, they may be eligible for the private health insurance (PHI) rebate. Most people claim the rebate as a reduction in the amount of premiums they pay to their insurer. The rebate is income tested, which means that if the individual has a higher income, the rebate entitlement may be reduced, or the individual may not be entitled to any rebate at all. If the individual doesnÕt have an appropriate level of private patient hospital cover, they may have to pay the Medicare levy surcharge. Medicare Levy Medicare gives Australian residents access to health care and is partly funded by taxpayers who pay a Medicare levy of 2.0% of their taxable income. The Medicare levy is reduced when taxable income is below a certain threshold and exemptions are available for Foreign and Norfolk Island residents; those not entitled to Medicare Benefits; and those meeting certain medical conditions.