What is the Medicare Levy Surcharge (MLS)?
The Medicare Levy Surcharge is an extra 1% to 1.5% levy paid by Australian taxpayers who don’t have Private Hospital Cover and are considered by Government to be high income earners.
The Medicare Levy Surcharge is in addition to the 1.5% Medicare levy (which is paid by most Australian taxpayers) and aims to encourage individuals to take out Private Hospital Cover. The Medicare Levy Surcharge currently applies to those Australian taxpayers who do not have private hospital cover and who earn above $90,000 for individuals and $180,000 for couples or families, increasing by $1,500 for each additional child after the first.
The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public system.
The Medicare Levy Surcharge is imposed on individuals and couples or families earning over the threshold who do not have an appropriate level of hospital insurance.
Currently, you have to pay the surcharge if you are:
- a single person with an annual taxable income for
MLS purposes greater than $88,000 in the 2013-14 financial year or $90,000 in the 2014-15 financial year; or
You must also pay the surcharge if you are a prescribed person with a taxable income over the threshold, and have any dependents who are not prescribed persons and who are not covered by an approved health cover policy as described above.
Medicare Levy Surcharge Income Thresholds Applicable From 1 July 2014
The table below shows the 2014-2015 income thresholds set by the Australian Government. (For the period of 1 July 2015 to 30 June 2018, the income tiers will be paused at the 2014-15 threshold levels as follows. The Rebate will continue to be adjusted annually on 1 April based on the Rebate Adjustment Factor.)