Medicare levy surcharge

Depending on your income for Medicare levy surcharge (MLS) purposes, the MLS rate is 1%, 1.25% or 1.5% of:

• your taxable income
• your total reportable fringe benefits, and
• any amount on which family trust distribution tax has been paid.

You may have to pay the MLS if:

• you or your dependants (including your spouse, even if they had their own income) did not have an ‘appropriate level of private patient hospital cover’ for the whole of 2014–15, and
• your income for MLS purposes was above a certain amount.

Your health insurer must give you a statement showing the number of days that you and all your dependants had appropriate cover in 2014–15. If you do not have this statement, or are not sure if you had an ‘appropriate level of private patient hospital cover’, contact your health insurer.

An appropriate level of private patient hospital cover is cover provided by a registered health insurer for hospital treatment in Australia which has an excess of:

• $500 or less (for a policy covering only one person), or
• $1,000 or less (for all other policies).

Excess is the amount you pay before your health insurer pays for any claim you make.

General cover (formerly called ancillary cover) or 'extras' is not private patient hospital cover because it covers only items such as optical, dental, physiotherapy or chiropractic treatment.

Dependants

Your dependants (regardless of their income) are your:

• spouse, even if they worked during 2014–15 or had their own income
• children under 21 years old
• children 21 to 24 years old who are full-time students.

Your dependants must have been Australian residents for tax purposes in 2014–15 and you must have contributed to their maintenance.

If you and all your dependants were not covered by an ‘appropriate level of private patient hospital cover’ for the whole of 2014–15, then read on.

Medicare levy surcharge exemptions

You are exempt from MLS for the whole of 2014–15 if you fit into one of the categories in table 1.

You and all your dependants were in a Medicare levy exemption category for the whole of 2014–15.

You were single for the whole of 2014–15, and: for the whole of 2014–15 you did not have a dependent child, and your income for MLS purposes was $90,000 or less.

You were single for the whole of 2014–15, and: you had a dependent child for all of 2014–2015, and your income for MLS purposes was $180,000 or less (plus $1,500 for each dependent child after the first).

You were single for part of 2014–15, and: for the whole of 2014–15 you did not have a dependent child your spouse did not die during the year, and your income for MLS purposes was $90,000 or less.

You had a spouse (with or without dependent children) for the whole of 2014–15, and your combined income for MLS purposes was: $180,000 or less (plus $1,500 for each dependent child after the first), or greater than $180 ,000 (plus $1,500 for each dependent child after the first) but your own income for MLS purposes was $20,896 or less. If you had a spouse on 1 July 2014, your spouse died during 2014–15 and you did not have another spouse before the end of the year, assume that you had a spouse for the whole of 2014–15 when you work out your MLS income.

Read Medicare Levy Surcharge if you did not fit into any of the categories in table 1 above and:

• you were single for part of the year
• you were widowed during the year
• you became or ceased to be a sole parent
• you or any of your dependants were covered for only part of the year, or
• you are an overseas visitor with health cover.

Completing your tax return

1. If you and all your dependants had an appropriate level of private patient hospital cover for the whole of 2014–15, select yes and go to Private health insurance policy details.

If you or any of your dependants did not have private patient hospital cover or only had cover for part of the year, select no.

Go to step 2.

2. If you were in an exemption category (see table 1 above) for the whole of 2014–15, you do not have to pay the surcharge. Go to Private health insurance policy details.

If you were not in an exemption category, read on.

3. Enter the number of days for which you do not have to pay MLS.

If you do not have to pay MLS for any days during the period 1 July 2014 to 30 June 2015, enter 365.

If you have to pay MLS for:

• the whole period 1 July 2014 to 30 June 2015, enter 0
• part of the period 1 July 2014 to 30 June 2015, enter the number of days for which you do not have to pay MLS.

 

Instructions on completing your individual tax return using myTax.