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  • Medicare levy surcharge letters

    We may send a letter about the Medicare levy surcharge (MLS) if we receive information that shows, for all or part of that year, you and all your dependants (including your spouse):

    • were not a member of a registered health fund
    • did not have an appropriate level of private patient hospital cover
    • had family income that was above the MLS threshold.

    We send these letters to your postal address.

    On this page:

    Paying the Medicare levy surcharge

    The MLS is in addition to the Medicare levy. The surcharge rate can be either 1%, 1.25% or 1.5% and is levied on:

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

    Since 1 July 2012, the MLS has been income tested against three new income tier thresholds (these may be indexed annually). The rate of surcharge you will be charged may increase depending on your income tier.

    The MLS income levels and rates are based on Single and Family thresholds. If you have two or more dependent children, the family income threshold is increased by $1,500 for each dependent child after the first child.

    If you cancelled your health insurance cover while travelling overseas, you may be liable for the MLS.

    See also:

    Receiving your letter

    We will send the letter to the most recent postal address on your record.

    Your letter will include a schedule showing the relevant information from your tax return compared with information we have.

    If you've received a data-matching letter from us and you have a question, we have a dedicated phone line you can use. You can phone us on 1300 768 912 and select option 3 between 8.00 am and 6.00 pm, Monday to Friday.

    What you need to do

    Review the information in your letter. Below is a sample MLS schedule provided on the letter.

    Keep in mind that your schedule will contain your own details and may not look exactly like this one.

    Sample: MLS schedule for the year ended 30 June <CCYY>

    Your income for Medicare levy surcharge (MLS) purposes

    $192,069

    Single or family status

    Family

    Your family income for MLS means you are a Tier 1 earner

     

    The number of days you reported on your tax return, at label M2, that you were not liable to pay the MLS

    342

    The number of days that held an appropriate level of private patient hospital cover

    322

    Private health insurance fund information

    Name of fund

    Hospital cover

    Type of cover

    Cover start date

    Cover end date

    Healthy People Insurance

    Yes

    Family

    1 July 2019

    7 June 2020

    The following definitions will help you understand your schedule:

    • Income for MLS purposes – your 'income for MLS is used to determine whether you are liable to pay the Medicare levy surcharge.
    • MLS tier – the rate of MLS depends on the tier your income for MLS purposes falls within.
    • Private health insurance fund information – provides details of your private health insurance policy, as provided to us by your private health insurer. It includes the name of your fund, the type of cover and the period of cover during the financial year.

    Once you have compared the information in your letter with your records, you can let us know:

    If you agree

    If you agree with our information you don’t need to do anything. We will send you an amended notice of assessment after 28 days.

    Once you receive your amended notice of assessment you'll need to pay and amounts you owe us by the due date.

    Your amended notice of assessment will be sent to your myGov Inbox if you have a myGov account.

    If you disagree

    If you disagree with the details reported, you will have 28 days to respond. We may ask you to provide supporting documents as evidence.

    You can either send us your details by:

    • mail, to:

    Australian Taxation Office
    PO BOX 3543
    Albury  NSW  2640

    Be aware, the internet is not a secure environment. We do not control the path of inbound and outbound emails. If you choose to communicate with us by email the privacy of your personal information can't be guaranteed.

    Your response will be assessed and once finalised you will receive an amended notice of assessment. You may be contacted by the case officer reviewing your supporting documents if we require additional information.

    If we don't receive a response from you in 28 days, we will automatically amend your tax return to align to the information we have. You will then receive an amended notice of assessment.

    Supporting documents

    We may ask you to provide your private health insurance statements for the relevant year showing the number of days that you and all of your dependants (including your spouse) had private patient hospital cover.

    'Private patient hospital cover' is provided by registered health insurers for hospital treatment provided in an Australian hospital or day hospital. You must arrange and pay for your cover directly with the insurer.

    For singles, an appropriate level of cover must have an excess of $750 or less. Couples or families must have an excess of $1,500 or less.

    General cover, commonly known as 'extras', is not private patient hospital cover. It covers items such as optical, dental, physiotherapy or chiropractic treatment.

    Travel insurance is not private patient hospital cover for the purposes of the MLS. Similarly, private patient hospital cover does not include cover provided by an overseas fund.

    See also:

    Last modified: 09 Oct 2020QC 41724