What Is the Medicare Safety Net and How Does It Work?

The Medicare Safety Net is one of those things a lot of people do not think about until someone mentions it. In short, once your out-of-pocket medical costs for the year reach a set threshold, Medicare starts covering a larger share of the cost for eligible GP and specialist services.

What Is the Medicare Safety Net?

The Medicare Safety Net is a government scheme designed to reduce the financial burden of frequent medical visits. Once your gap payments, meaning the difference between what Medicare pays and what your provider charges, reach a certain amount within the calendar year, your rebate increases for the rest of the year.

How Do the Two Thresholds Differ?

There are actually two safety nets working together, and it helps to understand what each one does.

The Original Medicare Safety Net

Under the Original Medicare Safety Net, once your gap costs reach the annual threshold, Medicare increases your benefit to 100 percent of the Medicare Benefits Schedule fee, rather than the standard 85 percent. For 2026, this threshold is set at $594.40, reviewed each year on 1 January in line with the cost of living. This figure applies to Medicare-eligible individuals and families.

The Extended Medicare Safety Net

The Extended Medicare Safety Net applies once a separate, higher threshold of out-of-pocket costs is reached, after which Medicare covers up to 80 percent of further out-of-pocket costs for the rest of the year, up to a cap on some items. Concession card holders and families receiving Family Tax Benefit Part A qualify for a lower threshold under this scheme. Because these figures are indexed and can be capped differently by item, the most accurate way to check your exact threshold is through your Medicare online account or by asking Services Australia directly.

Does the Threshold Reset Each Year?

Yes. Both safety nets run on the calendar year, from 1 January to 31 December, and reset to zero at the start of each new year. Costs from earlier in the current year all count towards your total, which is why checking your progress partway through the year, rather than waiting until December, can be worthwhile.

Does Bulk Billing Count Towards the Safety Net?

This is one of the most common points of confusion. Bulk-billed visits generally do not create an out-of-pocket cost, so they do not add to your safety net total in the same way a gap payment does. It is privately billed visits, where you pay a fee above the Medicare rebate, that count towards the threshold. For families with several GP visits, specialist referrals, or ongoing care for a child across the year, these costs can add up faster than expected.

How Do You Check Where You Stand?

You do not need to apply for the Medicare Safety Net. Medicare tracks your spending automatically, and you can check your running total any time through your Medicare online account via myGov or the Express Plus Medicare app. Families need to register with Services Australia to have costs combined across family members, even if everyone is listed on the same Medicare card.

If your family has had a busier year than usual with appointments, our reception team can also help point you towards the right information when you come in for your next visit.

Understanding the Medicare Safety Net will not change what today's appointment costs, but it might change what your next few visits cost, particularly if your family is approaching the threshold. For questions about how your specific visits are billed, our team can talk you through your options at Embrace Medical on Crown.

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