• Medicare levy surcharge

    We may send a letter about the Medicare levy surcharge if the information we receive shows that, 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.

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

    The Medicare levy surcharge is in addition to the Medicare levy. The surcharge rate can be either 1%, 1.25% or 1.5% of your taxable income (including your total reportable fringe benefits).

    Since 1 July 2012, the Medicare levy surcharge has been income tested against three new income tier thresholds which are indexed annually. The rate of surcharge you will be charged may increase depending on your income tier.

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

    Understanding your Medicare levy surcharge schedule

    Below is a sample Medicare levy surcharge schedule. Keep in mind that your schedule will contain your own details and may not look exactly like this one.

    Sample Medicare levy surcharge schedule

    Medicare levy surcharge schedule
    for year ended 30 June 2015

    Tax return information

     

    Your income for Medicare levy surcharge purposes

    $192,069

    Your family income for Medicare levy surcharge purposes

    $192,069

    Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover as shown on your tax return at Label M2

    342

    Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover as determined by the ATO. (Note: This may be the same number of days as shown on your tax return if it is only the rate at which you must pay MLS that has changed).

    322

    Medicare levy surcharge tier

    1

    Single or family status

    Family

    Private health insurance fund information

    Name of fund

    Hospital cover

    (Yes/ No)

    Policy type

    Cover start date

    Cover end date

    Healthy People Insurance

    Yes

    Family

    01 JUL 2014

    07 JUN 2015

    The following definitions will help you understand your schedule:

    • Tax return information – The various amounts declared in your tax return. These amounts are used to calculate the Medicare levy surcharge.
    • Income for Medicare levy surcharge purposes – Your 'income for Medicare levy surcharge' is used to determine whether you are liable to pay the Medicare levy surcharge.
    • Number of days you or any of your dependants were covered by an appropriate level of private patient hospital cover – The number of days you may not be liable for the Medicare levy surcharge.
    • Medicare levy surcharge tier – The rate of Medicare Levy Surcharge depends on the tier your income for Medicare levy surcharge 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.

    Next step:

    See also:

    Last modified: 11 Feb 2016QC 41724