The MLS is an extra tax charged by the Australian Government via your annual income tax return. The purpose of the surcharge is to take pressure off the public healthcare system by encouraging high-income earners to take out hospital cover.
The Medicare Levy Surcharge (MLS) is owed on top of the regular Medicare levy, but only applies to high-income earners who don’t have a private hospital cover policy. If you meet the following Medicare Levy Surcharge thresholds, without sufficient private health cover, you will likely need to pay the MLS:
- Singles who earn more than $97,000
- Couples with a combined income of more than $194,000 (including families and single parents).
If the above applies to you, you’ll owe the MLS for every day you didn’t hold appropriate private patient hospital cover in the full financial year. So, if you get insured from the full month of December, you may still owe MLS from July to November.
Private hospital cover with an excess of no more than $750 for singles or $1,500 for couples and families can help you avoid the MLS.
Taking out an extras cover policy as a standalone product will not help you avoid paying the MLS.