Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) is an additional tax applied to a person’s taxable income when they do not have an appropriate level of private hospital cover.

Understanding the Medicare Levy Surcharge

The Medicare Levy Surcharge was introduced to encourage Australians in the higher income brackets who are eligible for Medicare, but do not have an appropriate level of private hospital cover to get private hospital insurance, reducing the demand on the public hospital system.

The MLS is calculated in addition to the standard Medicare Levy of 2%. It applies to a person and his or her dependents, including his or her spouse. A dependent is classified in this case as any children under 21 years of age, or any children who are full-time students and are under 25 years of age.

The MLS is paid on any period during which the person does not have hospital cover. Those who are exempt from the Medicare Levy do not need to pay the MLS. 

Suspension of membership

If you apply to CBHS Corporate Health to suspend your hospital cover for a short period, and we agree, this period of suspension may affect your MLS liability.

Income thresholds and surcharge levels

If you need to pay the MLS, it will be included with the Medicare Levy on your notice of assessment from the Australian Tax Office.

 

Singles earning...
$90,000 or less do not pay the MLS
$90,001 – $105,000 pay 1% in MLS
$105,001 - $140,000 pay 1.25% MLS
$140,001 or more pay 1.5% for MLS 
Families earning...
$180,000 or less do not pay the MLS
$180,001 - $210,000 pay 1% in MLS
$210,001 - $280,000 pay 1.25% in MLS
$280,001 or more pay 1.5% in MLS

If as a couple or a single parent you have two or more children, the family income threshold is increased by $1,500 for every MLS dependant child after the first child. For example, if you have three dependent children, your family income threshold will increase by $3,000.

To work out your annual income for MLS purposes, you can refer to the ATO's Medicare Levy Surcharge Information.

You can avoid having to pay the MLS by simply choosing any hospital cover product with CBHS Corporate Health. Our premiums are lower than the industry average, and as a not for profit health insurer we provide outstanding value and better per service limits to our members. We also offer a comprehensive range of extras and insurance products in addition to hospital cover.

Useful links

Find out more

If you want to find out more about why you should join CBHS Corporate Health today, send us an email at help@cbhscorp.com.au or give our friendly Member Care team a call on 1300 586 462.