The Medicare Levy Surcharge is an extra 1% tax payable by those who earn over a certain threshold but do not have eligible private Hospital Cover. The purpose of the Medicare Levy Surcharge is to help ease the burden on the public health system by encouraging higher income earners to join health insurance and use the private system.
Singles
The threshold for singles for the 2010-2011 financial year is $77,000. This means that if you earn over $77,000 and do not have eligible Hospital Cover, you will be taxed an extra 1%, which is a minimum of $770 annually.
Couples
The threshold for couples for the 2010-2011 financial year is $153,000. This means that if you and your partner earn over $153,000 and do not have Hospital Cover, you will be taxed an extra 1%, which is a minimum of $1,530 annually.
Families
The threshold for families for the 2010-2011 financial year is also $153,000, so if your combined household income exceeds $153,000 and you do not have Hospital Cover, you will be taxed an extra 1%, which is a minimum of $1,530 annually. This applies to both single-parent and two-parent families, however special rules apply to families with more than one child. The Medicare Levy Surcharge threshold increases by $1,500 for every child after the first, as per the table below:
| No. of children | MLS threshold |
| 1 | $153,000 |
| 2 | $154,500 |
| 3 | $156,000 |
| 4 | $157,500 |
| etc... | + $1,500 per child |
If you're earning over the threshold figures outlined above, then the Medicare Levy Surcharge applies to you. Use the moneytime calculator to see how much extra tax you could be paying, then avoid it by taking out hospital cover.
By taking out eligible Hospital Cover, you can avoid the Medicare Levy Surcharge. In fact, in some cases you can even find Hospital Cover that's cheaper than the cost of the Medicare Levy Surcharge while still offering modest just-in-case cover. In order to be eligible, your hospital cover may not have an Excess or Co-payment greater than $500 for individual policies or $1000 for couple/family policies.
To find eligible Hospital Cover that exempts you from the Medicare Levy Surcharge, simply search and compare basic hospital cover options with moneytime. If you want a higher level of health cover than the basics required to avoid the Medicare Levy Surcharge, choose the private hospital option and consider taking out Extras cover as well, to receive benefits for a great range of non-hospital features like dental, optical, chiro, remedial massage and more.
Private health insurance offers peace of mind and the assurance that you are covered for any medical emergencies that may arise in life. Hospital Cover ensures your protection for medical procedures and hospital care, and with Extras Cover, you can claim on those lifestyle benefits that keep you fit and healthy, like chiro, physio, dental, remedial massage, acupuncture and more.
Keeping private health cover means you maintain all the benefits of Lifetime Health Cover, so you don't have to pay extra if you choose to come back to private health insurance later in life. Also, with private health cover, you have the option of being treated by the doctor and hospital of your choice, with shorter waiting times for elective surgery, and greater control over where and when you will be treated.
