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.

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.  All hospital covers available through the La Trobe University Health Plan will enable you to avoid the Medicare Levy Surcharge for the period covered.

Who pays the Medicare Levy Surcharge?

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

• Single people with a taxable income (including reportable fringe benefits) of greater than $73,000 per year, will pay an additional tax of 1% of their taxable income (with an income of $80,000, you will pay an extra $800 tax).
• Families/couples with a taxable income (including reportable fringe benefits) of greater than $146,000 per year, will pay an additional tax of 1% of their taxable income (with an income of $150,000, you will pay an extra $1500 tax).

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

When you may not have to pay the Medicare Levy Surcharge

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.

Save with Health Insurance

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

The University Health Plan can help with your Health Insurance

The University Health Plan offers employees and their families significant health insurance savings and peace of mind.  If you are unsure which cover option best suits your needs, call the Health Plan advisers, Health Link Consultants on ph: (03) 9670 5555 or toll free 1800 808 026.  Health Link will review your situation and provide policy advice to you - free of cost and without obligation.

More information about the Medicare Levy Surcharge

For general information about the Medicare Levy Surcharge or any other health insurance related matter, contactthe Health Plan advisers, Health Link Consultants on ph: (03) 9670 5555 or toll free 1800 808 026.  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