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Medicare Levy Surcharge

Here's a simple way to reduce your tax

If you earn more than $50,000 a year (for singles) or $100,000 a year (for couples and families*) and you don't have private hospital cover, you may need to pay the Medicare Levy Surcharge (MLS). This is an additional 1% tax on top of the 1.5% Medicare Levy paid by eligible taxpayers.

But, if you take out private hospital cover, you may not have to pay the extra tax.

So why not reduce your tax and get the benefits of private health cover too?

Here's how it works

For singles

If you earn more than $50,000 a year, you'll pay at least $500 extra at tax time for the Medicare Levy Surcharge (MLS). To find out exactly how much this will cost you, simply multiple your annual taxable income by 1%, or use our online calculator.

How HBA can help – cover with HBA starts from around $528 a year for singles, with the 30% Government Rebate^. Or, if you're after a more comprehensive cover, we have a range of hospital and extras options to suit you.

Help me select the right health cover

For couples and families

If you and your partner and earn a total of more than $100,000 a year, you'll pay at least $1,000 in extra tax for the Medicare Levy Surcharge (MLS). If you are a family, and have children, the threshold of $100,000 increases by $1,500 for each additional child you have after the first child.

To find out exactly how much this will cost you, simply multiply your annual taxable income by 1%, or use our online calculator.

How HBA can help – cover with HBA starts from around $1,055 a year for couples and families, with the 30% Government Rebate^. Or, if you're after a more comprehensive cover, we have a range of hospital and extras options to suit you.

Help me select the right health cover

All HBA hospital covers will allow you to reduce your tax because you won't have to pay avoid the Medicare Levy Surcharge.

What else do I need to know?

What's the definition of a dependant child?

For the purposes of the Medicare Levy Surcharge, dependant children are:

What's the benefit of taking out hospital cover?

Private health insurance with HBA gives you access to high-quality health care in Australia's private hospital system. It allows you to choose your own doctor, where you're treated and when.

Plus, when you take out any HBA hospital cover, you can reduce your tax because you won't have to pay the Medicare Levy Surcharge. So you get the protection of private hospital cover, and benefit by not having to pay the Medicare Levy Surcharge.

Proposed changes to the Medicare Levy Surcharge

In the Federal Government's May 2008 Budget it was proposed that the taxable income threshold for the Medicare Levy Surcharge would increase to $100,000 for singles and $150,000 for couples and families*.

Until passed by Parliament, this proposal remains just that - a proposal - and Parliament is not likely to consider the legislation again until at least September 2008. Also, the proposal may change from what is outlined above, and it is not certain whether the effective date would be applied retrospectively or at a future date.

For the time being, $50,000 remains the threshold for singles and $100,000 the threshold for couples and families*.

Until there is certainty about what the changes will be and when they will be effective, there may be some risks associated with any decision to discontinue hospital cover:

Please be assured that as soon as we know more, we'll pass on the information.

Check out our Medicare Levy Surcharge calculator to see if you are impacted
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* The family threshold increases by $1,500 per child after the first child.
^ Assuming no Lifetime Health Cover loading applies.