Medicare levy surcharge letter

Receiving your letter

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

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

The letter will include an MLS schedule that compares relevant information from your tax return with information we have received.

We'll send the letter to the most recent postal address we have for you.

What to do

There are 2 types of MLS letters and each requires a different action:

1. Have you reported your Medicare levy surcharge correctly?
2. Your Medicare levy surcharge may be incorrect.

For both letters, you need to review the MLS schedule and compare the information with your records. You can then determine if you agree or disagree.

Letter 1: Have you reported your Medicare levy surcharge correctly?

MLS schedule – sample

Below is a sample MLS schedule for the MLS letter titled Have you reported your Medicare levy surcharge correctly. Keep in mind that your schedule will have your own details and may not look exactly like this one.

Use the definitions to help you understand your schedule.

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

MLS details	Item
Your income for Medicare levy surcharge (MLS) purposes	$192,069
Single or family status	Family
Your family income for MLS	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 you 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

If you agree

If you agree with our information, you don’t need to do anything. We’ll send you an amended notice of assessment 28 days after the date shown on your letter. If you have a myGov account linked to ATO online services, we’ll send your amended notice to your myGov inbox.

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

If you disagree

If you disagree with the details reported, you need to let us know before the due date noted in your letter. You can contact us by:

• mail to
  Australian Taxation Office
  PO Box 3543
  ALBURY  NSW  2640
• phoning 1300 768 912 and selecting option 3 between 8:00 am and 6:00 pm, Monday to Friday
• emailing us at datamatchingteam@ato.gov.au

Be aware that the internet isn't a secure environment. We don't control the path of inbound and outbound emails. If you choose to email us, we can't guarantee the privacy of your personal information.

The case officer reviewing your supporting documents may contact you if we need additional information. If you:

• can prove your claim, you'll receive a letter advising the decision
• can't prove your claim, you'll receive an amended notice of assessment.

If we don't receive a response from you within 28 days of your letter's date of issue, we’ll automatically amend your tax return using the information we have. You’ll then receive an amended notice of assessment.

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

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 your dependants (including your spouse) had private patient hospital cover.

Letter 2: Your Medicare levy surcharge may be incorrect

MLS schedule – sample

Below is a sample MLS schedule for the MLS letter titled, Your Medicare levy surcharge may be incorrect. Keep in mind that your schedule will have your own details and may not look exactly like this one.

Use the definitions to help you understand your schedule.

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

MLS fields	Item
Your status as determined by us	Family
Your income for Medicare levy surcharge (MLS) purposes This does not include your spouse's MLS income	$93,547
The number of days you reported on your tax return, at label M2, that you were not liable to pay the MLS	365
The number of days we have determined that you held an appropriate level of private patient hospital cover and were not liable to pay the MLS	15

Private health insurance fund information

Name of fund	Hospital cover	Type of cover	Cover start date	Cover end date
Healthy People Insurance	Yes	Family	16 June 2022	30 June 2022

If you agree

If you agree with our information, you must amend your tax return as soon as possible so the information is the same as the data we hold. If you don't amend your tax return, you may be selected for an audit in the future.

To lodge your amendment, you can choose from the following options depending on your circumstances:

• Lodge your amendment online – you can submit an amendment to your tax return using our online services, which takes about 20 days to process.
• Lodge your amendment with a registered tax agent – if you use a registered tax agent, you can ask them to complete an amendment to your tax return on your behalf. They are the only people who can charge a fee.
• Lodge a paper amendment form – you can use the paper amendment form to lodge your amendment by mail, which takes up to 50 business days to process.
• Send a letter – you can write us a letter, which takes up to 50 business days to process.

If you disagree

If you disagree with the details reported, you need to let us know. You can phone us on 1300 768 912 between 8:00 am and 6:00 pm, Monday to Friday and select option 3.

Remember to:

• quote the reference number found at the top right of your letter
• use the words 'data matching'.

Schedule definitions

The following definitions will help you understand your schedule:

• Income for Medicare levy surcharge (MLS) purposes – income that is used to work out whether you must pay the MLS and the rate you will pay.
  • It isn't the same as your taxable income.
  • If you have a spouse, we will use your combined income for MLS purposes.
  • It is the sum of the following items for you (and your spouse, if you have one)
    • your taxable income, including the net amount on which family trust distribution tax has been paid, (excluding any assessable First home super saver released amount)
    • your reportable fringe benefits (as reported on your income statement or payment summary)
    • your total net investment losses (the sum of your net financial investment losses and net rental property losses)
    • your reportable super contributions (the sum of your reportable employer superannuation contributions and your deductible personal superannuation contributions)
    • if you have a spouse, their share of the net income of a trust on which the trustee must pay tax and has not been included in their taxable income
    • your exempt foreign employment income (if your taxable income is $1 or more).
  • If you meet both of the following conditions, you can reduce your income for MLS purposes by any taxed element of the super lump sum, other than a death benefit, that does not exceed your (or your spouse's) low-rate cap
    • You (or your spouse) are aged from your (or their) preservation age to under 60 years old.
    • You (or your spouse) received a super lump sum.
• MLS tier – this is determined by your income for MLS purposes; the rate of MLS then depends on your MLS tier.
• Private health insurance fund information – 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.
• Status – your situation (that is, couple, single, family).