How the Significant Cost Health Threshold Is Calculated
What is significant cost?
“Significant cost” is the main health criterion the DHA uses to assess whether an applicant’s health condition affects their eligibility for a visa. This criterion is set out in the Migration Act 1958 and the related regulations.
In essence, the DHA asks: “If this person lived in Australia for the duration of the visa, would the health care and community services costs they generate exceed normal levels to a significant degree?”
If the answer is yes, the visa may be refused on health grounds — not because the person is “sick” or “dangerous”, but because of the potential financial burden on Australia’s public budget.
The DHA’s method of calculation
The DHA uses a method based on comparing the applicant’s projected costs against the average per-capita expenditure of the Australian population:
Step 1 — Determine the average expenditure: The DHA uses Australia’s average per-capita health care and community services expenditure, drawn from national statistical data. This figure is updated annually and is multiplied by the expected duration of the visa (for example: 4 years, 10 years, or lifetime for a permanent visa).
Step 2 — Estimate the applicant’s costs: Based on the medical examination and assessment, the DHA (or the medical specialist advising the DHA) estimates the cost of treatment, care, and support services the person will need over the visa period. This cost covers both health care and government-funded community services.
Step 3 — Compare and decide: If the applicant’s estimated costs exceed the average to a significant degree (exceeding the significant cost threshold), the application is assessed as not meeting the health requirement.
The significant cost threshold — the specific figure
The significant cost threshold is published and updated annually by the DHA. The threshold represents the total excess cost — that is, the portion of the applicant’s costs that exceeds the average, calculated over the entire visa period.
Because the threshold changes from one financial year to the next and is not a static figure, applicants should check the DHA’s official website or ask a migration agent for the most accurate and up-to-date figure at the time of application.
Health care costs and community services costs — an important distinction
Many people think only of health care costs (hospitals, medicines, doctors) when they hear “significant cost”, but the DHA actually counts both:
Health care costs: Treatment at public hospitals, subsidised prescription medicines, physiotherapy, government-funded mental health services, and so on.
Community services costs: NDIS (National Disability Insurance Scheme) support, home care, special education, and other social welfare services.
For people with disability in particular, community services costs (NDIS) can be very large and often make up a significant portion of the DHA’s total cost estimate. This is why significant cost relates not only to medical conditions but also to disability.
How can you challenge the DHA’s estimate?
If you believe the DHA’s cost estimate is inaccurate, there are several approaches:
A rebutting medical report: Engaging an independent medical specialist to prepare a detailed report on the actual cost of treatment, which may be lower than the DHA’s estimate if the condition is well controlled.
Private health insurance: Demonstrating that you hold comprehensive private health insurance may reduce the burden on the public system. However, the DHA may not accept insurance as a mitigating factor in every case — confirm this with an agent.
An AAT appeal with an IMA: At the AAT, you can request an Independent Medical Assessment to obtain an independent cost assessment that differs from the DHA’s.
Challenging the methodology: In some cases, you can challenge how the DHA applied its method of calculation (for example: using the wrong visa duration, or failing to take into account effective treatment that reduces costs).
Practical meaning for applicants
Understanding how significant cost works helps you:
- Make a preliminary assessment of risk before lodging.
- Prepare appropriate medical documentation to support your application.
- Choose a suitable visa type (a short-term visa has a lower total estimated cost).
- Know when to seek in-depth advice from a migration agent experienced in complex health cases.
If your health condition, or that of a family member, could lead to significant cost, do not lodge without professional advice. The cost of advice beforehand is usually far lower than the cost of an appeal after a refusal.