Medicare items

Medicare levy surcharge (MLS)

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

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 2016–17, 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 2016–17. 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.

Appropriate level of private patient hospital cover

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 2016–17 or had their own income
children under 21 years old
children 21 to 24 years old who are studying full time at school, college or university.

Your dependants must have been Australian residents for tax purposes in 2016–17 and you must have contributed to their maintenance (for more information, see Maintaining a dependant).

Medicare levy surcharge exemptions

You are exempt from MLS for the whole of 2016–17 if you fit into one of the categories in table 1.

Table 1: Exemption categories

You and all your dependants were in a Medicare levy exemption category for the whole of 2016–17.

You were single for the whole of 2016–17, and:

for the whole of 2016–17 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 2016–17, and:

you had a dependent child for all of 2016–17, 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 2016–17, and:

for the whole of 2016–17 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 2016–17, 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 $21,655 or less.

If you had a spouse on 1 July 2016, your spouse died during 2016–17 and you did not have another spouse before the end of the year, assume that you had a spouse for the whole of 2016–17 when you work out your MLS income.

See 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, or
you or any of your dependants were covered for only part of the year.

Completing this section

Note: If you are an overseas visitor, for more information and instructions on how to complete the Medicare levy surcharge and this section, see Overseas visitors.

Answer the question Were you and all of your dependants covered by an appropriate level of private patient hospital cover from 1 July 2016 to 30 June 2017?
If Yes, go to the Private health insurance section.
If No, go to step 2.
If your income for MLS purposes is below the threshold for your circumstance, as outlined in the table 1, myTax may advise you that you do not have to pay the Medicare levy surcharge.
Otherwise, work out the Number of days you do not have to pay the surcharge.
If you do not have to pay MLS for any days during the period 1 July 2016 to 30 June 2017, enter 365.

If you have to pay the surcharge for:
- the whole period 1 July 2016 to 30 June 2017, enter 0
- part of the period 1 July 2016 to 30 June 2017, enter the number of days for which you do not have to pay the surcharge. For more information see Medicare levy surcharge.
If you had private patient hospital cover for any part of the year, go to the Private health insurance section.

Last modified: 12 Jun 2017QC 51007