It’s an unfortunate truth but Australians are unwittingly forking out extra at tax time due to a lack of knowledge surrounding the Medicare Levy Surcharge (MLS) and what it could mean for their back pocket.
An independent survey of 1200 respondents from comparison service comparethemarket.com.au shows that 41% of adult Australians don’t understand the MLS. Given the levy costs consumers a minimum of $900 per year in ‘penalty taxes’, this money could make a real difference to people’s household budgets.
The MLS applies to those who earn more than $90k as a single or $180k as a couple and do not have private hospital cover. These salaries might seem high at first glance but the average Aussie income of $81k actually isn’t too far away from it.
Karan Seth is single and earns over $104k but is not affected by the MLS as she took out health insurance before being impacted: “MLS can be a burden for those earning above the threshold due to the yearly indexing of the income as well as not being signed up with a health provider. But you can avoid it altogether, by signing up with a health insurance provider like I did.”
“Once you’re covered with a registered health fund, this MLS isn’t applicable anymore, irrespective of what a person earns.”
Currently, you have to pay the surcharge if you don’t have hospital cover with a registered health fund and you are:
- A single person with an annual taxable income for MLS purposes greater than $90k in the 2015-2016 financial year or
- A family or couple with a combined taxable income for MLS purposes greater than $180k in the 2015-2016 financial year.
Aussies should read up now and understand how they can be affected financially this health season.
For further information, or for an interview with Karan, please contact:
Hannah Twiggs, PR Assistant, comparethemarket.com.au
Tel: 07 3377 8879
Comparethemarket.com.au is a comparison website that makes it easier and quicker for Australians to compare and buy products and services they rely on in their everyday lives. Whether you’re looking for a good deal on your car insurance, health cover for you and your family, the lowest fuel prices in your area, or an energy provider that suits your needs, then go to comparethemarket.com.au. It’s a completely free service and enables Australians to make purchasing decisions with greater knowledge, confidence and savings.
 An independent survey carried out by Pure Profile on behalf of comparethemarket.com.au. The 1200 respondents were individuals living in Australia with private health insurance. Respondents were an equal ratio of male to female with age groups ranging from 18 years to 65 years +. Respondents were representative of the Australian population NSW (31%), VIC (25%), QLD (17%), WA (11%), SA (7%), TAS (6%), ACT (2%), and NT (1%).  http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0