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 can I avoid paying the Medicare Levy Surcharge?
- Where can I find more information about the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is additional tax of 1% of your income on top of the 1.5% Medicare Levy.
For the financial year of 2010–11 it will be imposed on people who do not have an appropriate level of private health insurance hospital cover and earn more than $77,000 for singles or $154,000 for couples/families (the family threshold increases by $1,500 for each dependent child after the first). The Australian Taxation Office can provide further information on the definition of dependents.
Income thresholds for the MLS are indexed to keep pace with the changes to average wages.
In the 2009-10 Budget, the Government put forward a proposal to increase Medicare Levy Surcharge rates for higher income earners. The proposal has not yet been passed by Parliament.
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Who must pay the Medicare Levy Surcharge?
For the financial year of 2010–11, the following people are required to pay the Medicare Levy Surcharge:
- single people with an income in excess of $77,000 who do not have an appropriate level of private health insurance hospital cover for any part of the year;
- couples and families with an income in excess of $154,000 (this income threshold increases by $1,500 for each child after the first) who do not have an appropriate level of private health insurance hospital cover for any part of the year.
General treatment (ancillary or extras) cover is not hospital cover, and you will be liable for the Medicare Levy Surcharge if this is your only private health insurance coverage.
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How can I avoid paying the Medicare Levy Surcharge?
For the financial year of 2010–11, if you are a single person and you earn more than $77,000 per year, you do not have to pay the Medicare Levy Surcharge if have an appropriate level of private health insurance hospital cover (with an excess or front-end deductible of no greater than $500 per annum) for the whole year.
For the financial year of 2010–11, if you are a couple or family and you earn a combined income of more than $154,000 per year, you do not have to pay the Medicare Levy Surcharge if you have an appropriate level of private health insurance hospital cover (with an excess or front-end deductible of no greater than $1,000 per annum) for the whole year.
Where can I find more information about the Medicare Levy Surcharge?
Further detailed information on the Medicare Levy Surcharge can be found at the Australian Taxation Office, or alternatively, by calling The ATO Helpline on 13 28 61.
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