What Is The Medicare Levy Surcharge

What is the Medicare levy surcharge and what is it for?

The Medicare levy surcharge (MLS) is designed to reduce the demand on the public Medicare system.

You will be required to pay the MLS if your income for MLS purposes is above the base income threshold and you or your family do not have an appropriate level of private patient hospital cover. This applies unless you are exempt from paying the Medicare levy and your dependents are also exempt or have an appropriate level of private cover.

The base income threshold is $90,000 for singles and $180,000 for families. However, you do not have to pay the MLS if your family income exceeds the threshold but your own income for MLS purposes was $20,896 or less.

Private patient hospital cover is provided by registered health insurers for hospital treatment provided in an Australian hospital or day hospital. You must arrange and pay for your cover directly with the insurer.

For singles, an appropriate level of cover must have an excess of $500 or less. Couples or families must have an excess of $1,000 or less.

General cover, commonly known as ‘extras’, is not private patient hospital cover. It covers items such as optical, dental, physiotherapy or chiropractic treatment.

The ATO will apply the rate of MLS that corresponds with your income for MLS purposes. If you have to pay the surcharge, it will be included with the Medicare levy and shown as one amount on your notice of assessment called Medicare levy and surcharge.

Warren Kruger

Specialist Tax Consultant - “Helping YOU Pay The Correct Tax And Not A Penny More”. My story starts on Christmas Eve, back in 1983 in South Africa.

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