MLS income thresholds and rates
The MLS is income tested against the following thresholds:
Medicare levy surcharge thresholds
You do not have to pay the MLS for:
- Singles: if your income for MLS purposes is $90,000 or less
- Families: if your combined income for MLS purposes is $180,000 or less plus $1,500 for each MLS dependent child after the first child.
Medicare levy surcharge rate
If you have to pay the MLS, the level of your income determines the MLS rate that you pay.
- For Singles if your MLS income is:
- $90,001 to $105,000, the rate is 1.0%
- $105,001 to $140,000, the rate is 1.25%
- $140,001 or more, the rate is 1.5%.
- For Families if your MLS income is:
Note 1: The family income threshold is increased by $1,500 for each MLS dependent child after the first child.
What if you or your family were covered by an appropriate level of private patient hospital cover for only part of the year?
If you took out private patient hospital cover during the 2018–19 year, use the following examples to help you work out how many days you are not liable to pay MLS.
Example 1: A single person with part-year private patient hospital cover
- Jacinta was single and had no dependants. She was not in a Medicare levy exemption category at any time during the year.
- Jacinta took out private patient hospital cover on 15 January 2019.
- Jacinta will answer No to the question Were you and all your dependants including your spouse covered by an appropriate level of private patient hospital cover from 1 July 2018 to 30 June 2019?
- Income below the MLS threshold:
- Where Jacinta's income for MLS purposes was less than the single income threshold of $90,000, myTax displays a message indicating that she does not have to pay the Medicare levy surcharge.
- Income above the MLS threshold:
- Where Jacinta's income for MLS purposes was greater than the single MLS threshold of $90,000, myTax displays the Number of days you not have the pay the surcharge entry box.
- Jacinta does not have to pay MLS for the time she had private patient hospital cover – from 15 January 2019 to 30 June 2019. That was 167 days.
- Jacinta will enter 167 at Number of days you do not have to pay the surcharge and complete Private health insurance section.
Example 2: A family with part-year private patient hospital cover
- Jill and Kevin have been married for a number of years. They have three dependent children. Jill, Kevin and their children were not in a Medicare levy exemption category at any time during the year.
- Jill and the children were covered by private patient hospital cover for the full income year.
- Kevin added his name to the policy on 10 January 2019.
- Both Jill and Kevin will answer No to the question Were you and all your dependants covered by an appropriate level of private patient hospital cover from 1 July 2018 to 30 June 2019?
- Income below the MLS threshold:
- Where Jill and Kevin's combined income for MLS purposes is less than their family MLS threshold, myTax displays a message indicating that they do not have to pay the Medicare levy surcharge.
- Income above the MLS threshold:
- Where Jill and Kevin's income for MLS purposes greater than their family MLS threshold, myTax displays the Number of days you not have the pay the surcharge entry box.
- Jill and Kevin do not have to pay MLS for the time the whole family had private patient hospital cover – from 10 January 2019 to 30 June 2019. That was 172 days.
- Jill and Kevin would both enter 172 at Number of days you do not have to pay the surcharge and complete Private health insurance section.
Which income threshold do you use if your family circumstances change during the year?
If you had a new spouse or you separated from your spouse, or you became or ceased to be a sole parent, both the single and the family surcharge thresholds may apply to you for different periods. Special rules apply in calculating MLS for these periods.
You need to work out whether you were liable for MLS for any period during 2018–19 that you:
- were single (that is, you had no spouse or dependent children) so you can apply the single surcharge threshold of $90,000 to your income for MLS purposes
- had a spouse or any dependent children, so you can apply the family surcharge threshold of $180,000, plus $1,500 for each dependent child after the first, to your income for MLS purposes.
If your spouse died during 2018–19 and you did not have another spouse before the end of the year, you are treated as if you had a spouse for the remainder of 2018–19 and you apply the family surcharge threshold of $180,000, plus $1,500 for each dependent child after the first.
You will be liable for MLS for the number of days you were single if:
- your own income for MLS purposes was more than the single surcharge threshold of $90,000, and
- you did not have an appropriate level of private patient hospital cover or were not in a Medicare levy exemption category.
You will be liable for MLS for the number of days you had a spouse or dependent children if:
- your own income for MLS purposes was more than the family surcharge threshold of $180,000 (plus $1,500 for each dependent child after the first one), and
- you, your spouse, or any dependent children did not have an appropriate level of private patient hospital cover or were not in a Medicare levy exemption category.
Use the following examples to help you work out how many days you are not liable to pay MLS if your family circumstances changed during the 2018–19 year.
Example 3: Separated during the year
- Michelle and Michael lived together as a couple on a genuine domestic basis for seven years, but on 12 October 2018 they separated and each stayed single.
- They did not have private patient hospital cover at any time during 2018–19.
- Michelle and Michael had no dependent children, but they were dependants of each other for MLS purposes until they separated.
- Michelle's income for MLS purposes was $95,000 and Michael's income for MLS purposes was $69,000.
- Michelle and Michael now have to use their individual income for MLS purposes and compare that with the:
- family MLS threshold to calculate whether or not they will have to pay the MLS for the number of days they were living together as a couple
- single person MLS threshold to calculate whether or not they will have to pay the MLS to the number of days they were single.
- As they did not have any private patient hospital cover during 2018–19 both Michelle and Michael answered No to the question Were you and all your dependants covered by an appropriate level of private patient hospital cover from 1 July 2018 to 30 June 2019?
- First period of the year:
- Michelle and Michael are considered to be a family for the period 1 July to 12 October 2018 (104 days).For this period, they use their own income for MLS purposes and each compare that with the family MLS threshold of $180,000. This means:
- Michelle is not liable for MLS for this period because her own income for MLS purposes ($95,000) was less than $180,000.
- Michael is not liable for MLS for this period because his own income for MLS purposes ($69,000) was less than $180,000.
- Michelle and Michael are considered to be a family for the period 1 July to 12 October 2018 (104 days).For this period, they use their own income for MLS purposes and each compare that with the family MLS threshold of $180,000. This means:
- Second period of the year:
- Michelle and Michael were single for the period 13 October 2018 to 30 June 2019 (261 days). For this period, they use their own income for MLS purposes and each compare that with the single person MLS threshold of $90,000 applies for that period. This means:
- Michelle is liable to pay MLS for this period because her own income for MLS purposes ($95,000) exceeded $90,000.
- Michael is not liable for MLS for this period because his own income for MLS purposes ($69,000) was less than $90,000.
- Michelle and Michael were single for the period 13 October 2018 to 30 June 2019 (261 days). For this period, they use their own income for MLS purposes and each compare that with the single person MLS threshold of $90,000 applies for that period. This means:
- Entering Number of days you do not have to pay the surcharge
- Michelle writes 104 being the number of days in the first period when she was not liable for MLS.
- Michael writes 365 because he was not liable for MLS in 2018–19.
Example 4: Got married during the year
- At the beginning of the income year, Alice and Adam were both single. Alice and Adam got married on 17 January 2019 and are still married on 30 June 2019. They were not in a de facto relationship before their marriage.
- They did not have private patient hospital cover at any time during 2018–19.
- Alice and Adam had no dependent children, but they were dependants of each other for MLS purposes from the date they were married.
- Alice's income for MLS purposes was $133,000 (including a net investment loss of $8,000) and Adam's income for MLS purposes was $80,000.
- Alice and Adam now have to use their individual income for MLS purposes and compare that with the:
- single person MLS threshold to calculate whether or not they will have to pay the MLS to the number of days they were single
- family MLS threshold to calculate whether or not they will have to pay the MLS for the number of days they were considered to be a family.
- As they did not have any private patient hospital cover during 2018–19 both Alice and Adam answered No to the question Were you and all your dependants covered by an appropriate level of private patient hospital cover from 1 July 2018 to 30 June 2019?
- First period of the year:
- Alice and Adam were single for the period 1 July 2018 to 16 January 2019 (200 days). For this period, they use their own income for MLS purposes and each compare that with the single person MLS threshold of $90,000. This means:
- Alice is liable to pay MLS for this period because her own income for MLS purposes ($133,000) exceeds $90,000.
- Adam is not liable for MLS for this period because his own income for MLS purposes ($80,000) was less than $90,000.
- Alice and Adam were single for the period 1 July 2018 to 16 January 2019 (200 days). For this period, they use their own income for MLS purposes and each compare that with the single person MLS threshold of $90,000. This means:
- Second period of the year:
- Alice and Adam are considered to be a family for the period 17 January to 30 June 2019 (165 days). For this period, they use their own income for MLS purposes and each compare that with the family MLS threshold of $180,000. This means:
- Alice is not liable for MLS for this period because her own income for MLS purposes ($133,000) was less than $180,000.
- Adam is not liable for MLS for this period because his own income for MLS purposes ($80,000) was less than $180,000.
- Alice and Adam are considered to be a family for the period 17 January to 30 June 2019 (165 days). For this period, they use their own income for MLS purposes and each compare that with the family MLS threshold of $180,000. This means:
- Entering Number of days you do not have to pay the surcharge
- Alice writes 165, the number of days in the second period when she was not liable for MLS.
- Adam writes 365 because he was not liable for MLS at any period in 2018–19.