The Medicare Levy Surcharge is an extra tax of 1% of taxable income payable by higher income families, couples and singles who do not have an eligible hospital insurance policy.  The Medicare Levy Surcharge is in addition to the normal Medicare Levy of 1.5% of taxable income.

Save with Health Insurance

You can avoid paying the Medicare Levy Surcharge by taking out an eligible hospital cover.  Many policies may cost you less than your Medicare Levy Surcharge liability so joining health insurance can actually save you money!  For example:

The above examples are based on premiums as at 1st April 2009.

Health Link can help with your Health Insurance

Health Link Consultants has access to a huge selection of policies from a range of health funds to ensure we can find the most appropriate and competitive cover for your requirements.

Simply provide us with details of your health insurance needs using the online form or call us on (03) 9670 5555 or 1800 808 026.  We’ll then review your situation and forward a policy recommendation to you.  Best of all, Health Link’s health insurance review and personal recommendation service is available to you free of cost and without obligation.

Who pays the Medicare Levy Surcharge?

The Medicare Levy Surcharge is payable by higher income earners who do not have an eligible hospital cover.

For the 2009/10 financial year:

• Single people with a taxable income (including reportable fringe benefits) of greater than $77,000* per year will pay an additional tax of 1% of their taxable income (with an income of $75,000, you will pay an extra $750 tax).

• Families/couples with a taxable income (including reportable fringe benefits) of greater than $154,000* per year will pay an additional tax of 1% of their taxable income (with an income of $160,000, you will pay an extra $1600 tax).

Note: The family threshold increases by $1500 p.a. for each child after the first.

* Including Reportable Fringe Benefits.

Eligible Hospital Cover

To avoid the Medicare Levy Surcharge, higher income earners need to take out eligible private health insurance (hospital cover) with a low excess (also known as a low front end deductible). To qualify, your hospital cover excess must be equal to or less than $500 per annum for single policies or $1,000 per annum for families and couples cover.

When you may not have to pay the Medicare Levy Surcharge

You may not have to pay MLS if you were in an exemption category for the whole of the financial year and you did not have any dependants or, if you had dependants, they were also all in an exemption category and/or they all had private patient hospital cover for the whole of the financial year.

You may not have to pay the Medicare Levy Surcharge if you had private patient hospital cover for the whole of 2008–09 and you did not have any dependants or, if you had dependants, they also all had private patient hospital cover for the whole of 2008–09 and/or they were all in an exemption category.

If you had an eligible hospital cover for part of the year, you will generally be required to pay the Medicare Levy Surcharge only for those days when you or any of your dependants did not have an eligible hospital cover.

More information about the Medicare Levy Surcharge

For general information about the Medicare Levy Surcharge or any other health insurance related matter, contact Health Link Consultants on 03 9670 5555 or 1800 808 026 – or contact us online.
For more detailed information about the Medicare Levy Surcharge, contact the Australian Taxation Office by:

•    Visiting the ATO website at: http://www.ato.gov.au
•    Calling the ATO on 13 28 61