Medicare Levy Surcharge (MLS)

If you and your spouse’s combined taxable income for MLS purposes exceeded the family surcharge threshold but your own taxable income for MLS purposes did not exceed the thresholds below then you are not liable for the surcharge for any part of the year.  However, your spouse may still be liable for the surcharge.

An appropriate level of private patient hospital cover is cover provided by a registered health insurer for hospital treatment in Australia which has an excess of:

$500 or less (for a policy covering only one person), or
$1,000 or less (for all other policies).

If you have overseas visitors health cover, check with the provider to make sure that the policy is one which has an appropriate level of private patient hospital cover for MLS purposes.

Refer to the link below for more details.

Changes to the Medicare Levy are typically announced in the May Federal Budget for the current year and to apply in the future years unless changed in the next Federal Budget.

You will have to pay the surcharge on a pro rata basis for any days during the year that you or any of your dependants did not have private patient hospital cover and you exceeded the thresholds below.

 NB! Even if one spouse has personal cover, they are both still liable to pay the surcharge for any days when both of them and all of their dependants were not simultaneously covered.  However, a spouse does not have to pay the MLS if their family income exceeds the threshold, but their own income for MLS purposes was $21,980 or less.

Family threshold increases by $1,500 for every child after the first child.

For the definition of Income for MLS purposes refer to the link below.

For this purpose, a dependant (regardless of their income) includes:

• your spouse
• your children under 21 years old
• your children who are 21 years old or older and under 25 years old who are full time students.

Dependants must have been Australian residents, and in the case of a child, you must have contributed to their maintenance.

*** When does the family threshold apply for the MLS purposes?

You will have to pay the surcharge on a prorata basis for any days during the year that you or any of your dependants did not have private patient hospital cover and you exceeded the thresholds below.

 NB! Even if one spouse has personal cover they are both still liable to pay the surcharge for any days when both of them and all of their dependants were not simultaneously covered.

For the definition of Income for MLS purposes refer to the link below

For this purpose, a dependant (regardless of their income) includes:

• your spouse
• your children under 21 years old
• your children who are 21 years old or older and under 25 years old who are full time students.

Dependants must have been Australian residents and you must have contributed to their maintenance.

You will have to pay the surcharge for any period during the year that you or any of your dependants did not have private patient hospital cover and you exceeded the thresholds below.

NB! Even if one spouse has personal cover they are both still liable to pay the surcharge if any of their dependants are not covered.

For the definition of Income for MLS purposes refer to the link below

For this purpose, a dependant (regardless of their income) includes:

your spouse

your children under 21 years old

your children who are 21 years old or older and under 25 years old who are full time students.

Dependants must have been Australian residents and you must have contributed to their maintenance.

You may have to pay the MLS if you or your dependants (including your spouse), did not have an appropriate level of private patient hospital cover for the whole tax year and your income for MLS purposes was above a certain amount.

NB! Even if one spouse has personal cover they are both still liable to pay the surcharge if any of their dependants are not covered.

For this purpose, a dependant (regardless of their income) includes:

your spouse

your children under 21 years old

your children who are 21 years old or older and under 25 years old who are full time students.

Dependants must have been Australian residents and you must have contributed to their maintenance.

Single person surcharge threshold (no dependents)

Family surcharge threshold

> a member of a family and the combined taxable income for MLS purposes of you and your spouse (if you had one for the whole year) was above the relevant family surcharge threshold shown in the table below.

The threshold for a family depends on the number of dependent children as listed below:

Note 1: Special conditions apply for 2008/2009 only, if the taxpayer started a policy for private hospital cover between 1 July 2008 and 1 January 2009, and has less than 365 days private hospital cover.  If the taxpayer had an appropriate level of private patient hospital cover during any part of the period 1 July 2008 to 31 December 2008 and also on 1 January 2009 the taxpayer is treated as having cover for the whole period 1 July 2008 to 31 December 2008.