The Medicare Levy Surcharge applies to Australian taxpayers who do not have private hospital cover and who earn above a certain income (that’s singles who earn over $97,000 and families that earn over $194,000 in the financial year). The surcharge aims to encourage individuals to take out private hospital cover and, where possible, to use the private system to reduce the demand on the public system.
The surcharge is calculated between 1% and 1.5% (dependent on your household income). It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers. The Medicare Levy Surcharge is imposed on individuals earning over the income threshold who do not have an appropriate level of hospital cover. The income threshold changes each financial year. You do not have to pay the surcharge if your household income is below the income threshold.
The RBHS hospital cover exempts you from the Medicare Levy Surcharge.
|
Step 1: Income Threshold |
Medicare Levy Surcharge | |
|---|---|---|
| Base Tier | Single |
0% |
| Tier 1 | Single |
1% |
| Tier 2 | Single |
1.25% |
| Tier 3 | Single |
1.5% |
*If you're a family with children, the income threshold for each tier is increased by $1,500 for every child after your first.
Family includes couples and single parent families.