How much is the Medicare levy surcharge?

The Medicare levy surcharge is an additional tax of between 1% and 1.5%, depending on how much you earn. The full 1.5% is only applied to singles who earn more than $151k a year, or couples earning more than $302k a year. This is in addition to the 2% Medicare Levy that most tax payers pay.

How can I avoid the Medicare levy surcharge?

You can avoid the Medicare levy surcharge by taking out an eligible hospital cover policy. You cover will need to have an excess of no more than $750 for singles, or $1500 for couples.

How many Australians are impacted by the MLS?

It's hard to be exact. Finder looked at earnings figures from the 2021 Census. Two years ago, there were: 3.51 million Australians earning $91,000 per year or more. 1.53 million households with a combined income of more than $182,000. Even with lower-than-average wage rises, you'd expect most would fall above the minimum thresholds today. APRA stats show around 55% of the population isn't covered by hospital cover, meaning we're likely talking millions not hundreds of thousands. If that includes you, consider hospital insurance .

Do my partner and I both need hospital cover to avoid the MLS?

Yes, if you both earn a combined income of more than $194,000 in the current financial year, you must hold hospital cover for you and your partner to avoid the MLS. If your partner or any dependent isn't covered, you will pay the surcharge.

Do both spouses pay the Medicare Levy Surcharge?

Essentially, yes. If you have a spouse, the ATO uses your combined income to calculate your surcharge.

If I switch my hospital cover, will I need to re-serve my waiting periods?

No. The industry follows portability rules to make sure there's competition among health funds. You won't need to re-serve any waiting periods you've already served.