Private health insurance
Private health insurance - Medicare levy surcharge
Questions and answers regarding the Medicare levy surcharge.
- What is the Medicare levy surcharge?
- Who must pay the Medicare levy surcharge?
- How much is the Medicare levy surcharge?
- How can I avoid paying the Medicare levy surcharge?
- Where can I find more information about the Medicare levy surcharge?
- Are the Medicare levy and Medicare levy surcharge the same?
The Medicare levy surcharge (MLS) is a tax on people that earn over a certain amount and don’t have private health insurance hospital cover.
Who must pay the Medicare levy surcharge?
For the 2012-13 financial year, the following people are required to pay the MLS:
- If you are single, earn more than $84,000 and don’t have private health insurance hospital cover, you will pay the MLS.
- If you are a family (or couple), have a combined income of more than $168,000 and don’t have hospital cover for you, your partner, or your children – you will pay the MLS. For families with multiple children, the threshold will increase by $1,500 for each child after the first.
How much is the Medicare levy surcharge?
Medicare levy surcharge for the 2012-13 financial year
 | No change | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Singles | $84,000 or less | $84,001 - 97,000 | $97,001 - 130,000 | $130,001 + |
| Families | $168,000 or less | $168,001 - 194,000 | $194,001 - 260,000 | $260,001 + |
| All ages | 0.0% | 1.0% | 1.25% | 1.5% |
The tiers are based on your income for Medicare levy surcharge purposes. For more information, visit the income for Medicare levy surcharge purposes page or call 132 861.
To work out which tier you are in, use the Australian Taxation Office calculator.
How can I avoid paying the Medicare levy surcharge?
If you do not earn more than the income thresholds you will not pay the MLS.
If you are single and earn more than $84,000 you will not pay the MLS if you have private health insurance hospital cover.
If you are a family (or couple) that earns more than $168,000 you will not have to pay the MLS if all members have hospital cover.
Private health insurance hospital cover for MLS purposes does not have an annual excess (or front-end deductible) greater than $500 for singles or $1,000 for families/couples.
General treatment (ancillary or extras) cover is not hospital cover. You will be liable for the MLS if this is your only private health insurance cover.
Where can I find more information about the Medicare levy surcharge?
For more information about the MLS, visit the guide to the Medicare levy surcharge page or call 132 861.
Are the Medicare levy and Medicare levy surcharge the same?
No.
The Medicare levy is paid by most Australians pay to help fund the public health system. You will pay the Medicare levy regardless of your private health insurance hospital cover or income. It is taxed at 1.5 per cent of your salary.
