Medicare is the scheme that gives Australian residents access to health care. To help fund the scheme, most taxpayers pay a Medicare levy of 2% of their taxable income. To encourage people to have Private Health Insurance the government applies an additional levy to those who earn over a certain income and do not have an appropriate level of private hospital insurance. The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system and reduce the demand on the public system.

If you don't have an appropriate level of private hospital cover you may have to pay this taxation levy known as the Medicare Levy Surcharge (MLS). You will be charged a percentage of your earnings on top of the normal 2% Medicare Levy  if you earn over the following thresholds from the 2015/2016 financial year;

  •  If you are a family, have a combined income of more than $180,000 and don’t have the appropriate level of private hospital cover for you, your partner, or your children – you will pay the MLS.

  •  If you are single, earn more than $90,000 and don’t have the appropriate level of private hospital cover you will pay the MLS.

The MLS will also apply if you cancel your existing hospital cover.  If you want to avoid paying any MLS, you must have the appropriate level of private hospital cover for the full income year.

If you do not have an appropriate level of private hospital cover, use the table below to see how the changes affect you.

Remember it’s important that you and your partner (if any) and any children have private hospital cover or you (and any partner) will be subject to the MLS collectively.

 

Medicare levy surcharge for the 2015-16 Financial Year and 2016-17 Financial Year.


 

http://www.health.gov.au/icons/ecblank.gifIncome Level                 

Base Tier

No  MLS required

Tier 1

Tier 2

Tier 3

Singles

$90,000 or less

$90,001 - 105,000

$105,001 - 140,000

$140,001  or more

Families

$180,000 or less

$180,001 - 210,000

$210,001 - 280,000

$280,001  or more

All ages

0.0%

1.0% MLS

1.25% MLS

1.5% MLS

 

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

The tiers are based on your income as calculated for Medicare levy surcharge purposes.

 For more information, visit the income for Medicare levy surcharge purposes page  on the Australian Taxation Office website.

To work out which tier you are in, use the Australian Taxation Office calculator.

 

Important information 

 

Police Health cannot advise on financial or tax matters. All material regarding the Medicare Levy Surcharge featured by Police Health should be used as a general guide only and should not be taken as advice and should not be relied upon in determining your personal tax or financial position. You should obtain independent advice relevant to your circumstances.