Individuals and families on incomes above the Medicare Levy Surcharge thresholds, who do not have an appropriate level of private health insurance cover, may have to pay the Medicare Levy Surcharge (MLS) for the period they did not have this cover.
The Medicare Levy Surcharge is in addition to the 2% Medicare levy.
How much is the Medicare Levy Surcharge?
Previously, the Medicare Levy Surcharge was a flat rate of 1%, however from 1 July 2012 the Government has introduced new income thresholds with higher rates of the Surcharge for higher income earners.
The Medicare Levy Surcharge is calculated on your “income for surcharge purposes“. If you have a partner, your combined “income for surcharge purposes” is used.
The income thresholds in the table below relate to the 2017-18 financial year.
|Base Tier||Tier 1||Tier 2||Tier 3|
|Singles||90,000 or less||90,001 - 105,000||105,001 - 140,000||140,000 +|
|Families||180,000 or less||180,001 - 210,000||210,001 - 280,000||280,000 +|
|Each extra child||1,500||1,500||1,500||1,500|
The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child.
The above rates will remain frozen until 30 June 2018.
The Taxation Office has a handy Income Tests Calculator to help you work out your income for Medicare Levy surcharge purposes.
More information on the Medicare Levy Surcharge is available from the ATO Medicare Levy Surcharge page. This includes detailed information on appropriate cover, who is a dependent, taxable income for MLS purposes, part-year liability, and more.