Understanding Prescription Costs and Medicare Rebates in Australia

When you move to Australia, one of the first things you need to understand is how prescription costs work and what Medicare covers. Prescription costs in Australia are significantly lower than in many other countries, thanks to the Pharmaceutical Benefits Scheme (PBS), which provides Medicare rebates on eligible medicines. If you're a new migrant, international student, or temporary worker, knowing how these rebates work can save you hundreds of dollars a year on medications.

The PBS is a government program that subsidises the cost of prescription medicines for Australian residents. When you collect a prescription from a pharmacy, you pay a co-payment (also called a patient contribution), and Medicare covers the rest of the cost through a rebate to the pharmacy. As of 2026, the standard co-payment for most PBS medicines is $30 per prescription, though some medicines cost less if the PBS price is below this amount.

However, not everyone qualifies for Medicare rebates. Permanent residents and Australian citizens have automatic access to PBS medicines. Temporary visa holders, including international students and skilled temporary workers, do not qualify for Medicare and must pay the full cost of prescriptions unless they come from a country with a Reciprocal Health Care Agreement (RHCA) with Australia.

Who Qualifies for Medicare Prescription Rebates

Understanding your eligibility is crucial before you fill a prescription at an Australian pharmacy. Your visa status determines whether you can access PBS medicines at the subsidised co-payment rate.

Australian citizens and permanent residents automatically qualify for Medicare and can access PBS medicines at the standard co-payment. You simply present your Medicare card when you collect your prescription.

Temporary visa holders (skilled temporary visas, working holiday visas, student visas) do not qualify for Medicare unless they hold a visa from a country with an RHCA. These countries include the United Kingdom, Ireland, New Zealand, Sweden, Finland, Norway, Belgium, Netherlands, and several others. If you hold a visa from one of these countries, you may be eligible for reciprocal health care, which covers some prescription medicines.

International students are required to have Overseas Student Health Cover (OSHC) as a condition of their student visa. OSHC typically covers a portion of prescription costs, but you should check your policy details. Some OSHC providers cover the full cost of PBS medicines, while others require you to pay the co-payment.

New Zealand citizens on Special Category Visas (subclass 444) can access Medicare immediately upon arrival in Australia, which means they qualify for PBS rebates from day one.

To check your eligibility, you can contact Services Australia on 13 11 84 or visit the official Services Australia website. Have your visa details and passport ready when you call.

How the PBS Co-Payment System Works

The PBS co-payment system is straightforward once you understand the basics. When your doctor prescribes a medicine, they will indicate on the prescription whether it is a PBS medicine. When you take the prescription to a pharmacy, the pharmacist will charge you the co-payment amount.

As of 2026, the standard co-payment is $30 per prescription for most PBS medicines. However, there are important exceptions:

  • If the PBS price of the medicine is less than $30, you pay the lower amount
  • Concession card holders (pensioners, low-income earners, and some other groups) pay a reduced co-payment of $7.70
  • Safety net thresholds apply: once you or your family reach a certain spending limit on co-payments in a year, further prescriptions become free for the rest of that year

The safety net is an important feature of the PBS. For general patients, the threshold is $250 in co-payments per calendar year. Once you reach this amount, you receive a safety net card from the pharmacy, and all further PBS prescriptions are free for the remainder of that year. For concession card holders, the threshold is $50.

When you collect a prescription, the pharmacist will scan your Medicare card (if you have one) or your concession card. The system automatically tracks your co-payments toward the safety net threshold. If you're approaching the threshold, the pharmacist will let you know.

What Medicines Are Covered by the PBS

Not all medicines available in Australia are covered by the PBS. The Therapeutic Goods Administration (TGA) approves medicines for use in Australia, but the PBS only covers medicines that have been approved for listing on the PBS schedule.

The PBS covers thousands of medicines, including antibiotics, blood pressure medications, diabetes treatments, asthma inhalers, and many others. However, some newer medicines, expensive treatments, or medicines for rare conditions may not be on the PBS, or they may have restrictions on when they can be prescribed.

Your doctor will know whether a medicine is on the PBS. If it is, they will write "PBS" or "Authority Required" on the prescription. If a medicine is not on the PBS, you will pay the full cost, which can be significantly higher. For example, a non-PBS medicine might cost $100 or more, whereas the same medicine on the PBS might cost you only $30.

If your doctor prescribes a non-PBS medicine, ask them if there is a PBS alternative available. Often, there are several medicines that treat the same condition, and at least one will be on the PBS.

You can search the PBS website to check whether a specific medicine is covered. The PBS search tool allows you to look up medicines by name and see the current co-payment amount and any restrictions.

Reducing Your Prescription Costs

There are several practical ways to reduce what you pay for prescriptions in Australia, even if you don't qualify for Medicare rebates.

Ask your doctor about generic medicines. Generic medicines are chemically identical to brand-name medicines but cost less. Your doctor can prescribe a generic version, and you'll pay the same co-payment as for the brand name. Many people don't realise this option exists.

Request a longer prescription. If you take a medicine regularly, ask your doctor for a prescription that covers three months of supply instead of one month. This reduces the number of co-payments you make. For example, instead of paying $30 three times, you might pay $30 once for a three-month supply.

Use the PBS safety net. If you take multiple medicines, keep track of your co-payments. Once you reach $250 in a calendar year, your prescriptions become free. Plan your refills accordingly to take advantage of this.

Check if you qualify for a concession card. If you're on a low income, you may qualify for a Health Care Card or Pensioner Concession Card, which reduces your co-payment to $7.70. Contact Centrelink on 13 27 17 to check your eligibility.

Compare pharmacies. While the co-payment is the same at all pharmacies, some pharmacies offer loyalty programs or discounts on non-PBS items. It's worth asking your local pharmacy what they offer.

For temporary visa holders without Medicare: If you don't qualify for Medicare, ask your doctor if they can prescribe a medicine that is available over-the-counter at a lower cost. Some medicines are available without a prescription and may be cheaper than paying the full cost of a prescription medicine.

Reciprocal Health Care Agreements and OSHC

If you're a temporary visa holder from a country with an RHCA, you may have access to some PBS medicines without paying the full cost. The RHCA countries include the United Kingdom, Ireland, New Zealand, Sweden, Finland, Norway, Belgium, Netherlands, Malta, Italy, and several others. If you're from one of these countries, you can apply for reciprocal health care coverage, which covers some prescription medicines.

To apply for reciprocal health care, contact Services Australia or visit a service centre. You'll need to provide proof of your visa status and your country of origin. The process typically takes a few weeks.

If you're an international student, your OSHC policy should cover prescription medicines. Check your policy documents or contact your OSHC provider to understand exactly what's covered. Some OSHC policies cover the full cost of PBS medicines, while others require you to pay a co-payment or a percentage of the cost.

Useful Official Sources

Frequently Asked Questions

Do international students in Australia get free prescriptions?

No, international students do not qualify for Medicare. However, they are required to have Overseas Student Health Cover (OSHC), which typically covers some or all prescription costs. Check your OSHC policy for details on what medicines are covered.

What is the current PBS co-payment amount in Australia?

As of 2026, the standard co-payment for PBS medicines is $30 per prescription. Concession card holders pay $7.70. If the PBS price is lower than the co-payment, you pay the lower amount.

How does the PBS safety net work?

Once you pay $250 in co-payments in a calendar year, you receive a safety net card and all further PBS prescriptions are free for the rest of that year. Concession card holders reach the safety net at $50.

Can temporary visa holders access PBS medicines?

Temporary visa holders do not qualify for Medicare unless they are from a country with a Reciprocal Health Care Agreement. If you're from the UK, Ireland, New Zealand, or certain other countries, you may be eligible for reciprocal health care coverage.

What should I do if my prescribed medicine is not on the PBS?

Ask your doctor if there is a PBS alternative available. Many conditions have multiple treatment options, and at least one is usually on the PBS. If not, you will pay the full cost of the non-PBS medicine.

How can I reduce my prescription costs in Australia?

Ask your doctor about generic medicines, request longer prescriptions (three months instead of one), track your co-payments toward the safety net, and check if you qualify for a concession card. These steps can significantly reduce your costs.

Do New Zealand citizens get Medicare when they arrive in Australia?

Yes, New Zealand citizens on Special Category Visas (subclass 444) can access Medicare immediately upon arrival, which means they qualify for PBS rebates from day one.

Where can I check if a specific medicine is on the PBS?

You can search the PBS website at pbs.gov.au to check whether a specific medicine is covered, see the current co-payment amount, and learn about any restrictions on its use.

This is general information only. It is not legal, migration, financial, tax, medical, or professional advice. Always check official sources before acting.