What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is a tax the Australian Government introduced to
encourage people earning above a certain amount to buy hospital insurance and where
possible go to private hospitals instead of public ones.
There’s often confusion between the Medicare Levy and the MLS. The Medicare Levy is a tax
that helps fund the public health care system. Most Australian taxpayers pay this tax.
The MLS is an extra tax on top of the Medicare Levy, which only applies to people who
don’t have hospital insurance and earn above a certain amount.
How does it work?
If your income is more than $90,000 as a single (or $180,000 as a family) and you don’t
have hospital insurance, you might have to pay the Medicare Levy Surcharge (MLS).
Depending on how much you earn, the MLS will be 1 – 1.5% of your income.
Does it apply to me?
You will only have to pay the MLS if you’re earning more than $90,000 a year and don’t
have hospital insurance.
Even if the MLS doesn’t apply to you, it’s still worth considering taking out hospital
cover by 30 June of the year following your 31st birthday. Why? Because of another
government requirement: Lifetime Health Cover loading (explained above), which makes
Hospital cover more expensive the longer you put off getting it.