Medicare Levy Surcharge calculator

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What is a Medicare Levy Surcharge (MLS) calculator?

A calculator is an important tool that can give you an estimate of whether or not you’ll have to pay the Medicare Levy Surcharge (MLS), and the rate at which it will apply to you based on your current circumstances.

When you speak to one of our health insurance experts over the phone, we can calculate your eligibility for the MLS based on the following criteria:

  • whether or not you hold qualifying private hospital cover at that point in time;
  • your current relationship status;
  • how many children you have; and
  • your annual taxable income as an individual, with your partner, or based purely on your partner’s income.

What is the Medicare Levy Surcharge?

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. The following individuals will owe the MLS, with few exceptions:

  • singles who earn more than $90,000; or
  • couples that collectively earn more than $180,000 – including families & single parents.

You must also take out a policy with an excess of no more than $750 for singles or $1,500 for couples and families.

Furthermore, if you’re one of the individuals outlined above, you will owe the Medicare Levy Surcharge for every day in the financial year you did not hold appropriate private hospital cover. So, if you get insured in December, you may still owe MLS from July through to November.

Frequently asked questions

What is the Medicare levy, and how is it different from the Medicare Levy Surcharge?

The MLS differs from the Medicare levy, which is a two per cent tax paid by most taxpayers to fund the public healthcare system. For those on higher incomes, The MLS is payable in addition to the Medicare levy.
Thankfully, the MLS can be easily avoided by taking out hospital cover, though keep in mind if you haven’t held it for the entire financial year, you could have to pay the MLS for each day you didn’t hold cover.

Do I need to pay the Medicare Levy Surcharge?

If you earn less than a specified amount, you will not pay the MLS. If you earn above the respective income threshold and do not hold an appropriate private hospital policy, you will pay the MLS for every day of the financial year you aren’t insured.

Please note: Taking out an extras cover policy as a standalone product will not prevent you from paying the MLS.

Do I qualify for Medicare Levy Surcharge exemptions?

If you are exempt from the Medicare Levy, you could also be exempt from the MLS. For part of (or the entirety of) this financial year;

  • Did you identify as a blind pensioner?
  • Did you receive sickness allowance from Centrelink?
  • Were you entitled to full medical treatment free of charge for all conditions under the Australian Defence Force or Veterans’ Affairs Repatriation Health Card (Gold Card)?
  • Were you not entitled to Medicare benefits in the previous financial year?
  • Were you a foreign resident (for tax purposes)?

If any of the above conditions apply, you may be exempt from the Medicare levy and Medicare Levy Surcharge, but we recommend you visit the ATO’s website to make sure.

Is it worth taking out private health insurance to avoid the MLS?

Taking out hospital cover will not only help you avoid the MLS, but it also helps pay for your treatment as a private patient, allows you to choose your doctor, have a private room (if one’s available) and avoid public waiting lists.

Australia’s public hospital waiting lists have been growing steadily in recent years, as illustrated in the chart below, making this product even more appealing.

Source: Elective surgery waiting times 2017-18, Australian Institute of Health and Welfare, Australian Government. 2019.

Don’t want to pay MLS? Compare and buy hospital insurance

Nobody wants to pay extra tax if they can help it. Regardless of whether you’ve used a MLS calculator or not, there are more benefits to hospital cover than just avoiding a surcharge.

If you’re considering private hospital insurance for yourself or your family, comparing policies is a great place to start. Our free health insurance comparison service lets you review policies available from a range of brands in minutes.

It couldn’t be easier to compare prices and coverage, so why not see what we have to offer?

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