What is the Medicare Levy Surcharge?

Posted: May 20 2021

The Australian Government introduced the Medicare Levy Surcharge (MLS) to reduce demand on the public health system by encouraging those on higher incomes to take out private health insurance. Basically, if your income exceeds the MLS threshold and you don’t have hospital cover you’ll need to pay extra tax on your income at tax time. The MLS is additional to the standard Medicare Levy, which is unavoidable to most Australian taxpayers.

MLS article page s

We've broken it down for you.

The surcharge starts at 1% of your income for MLS purposes, rising as your income increases. So, take a look at the table below to see if you need to pay the MLS at tax time.

SinglesUnder $90,000$90,001 – $105,000$105,001 – $140,000$140,001+
FamiliesUnder $180,000$180,001 – $210,000$210,001 – $280,000$280,001+



Source: www.privatehealth.gov.au
Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

Can you avoid it?

That's where Health Partners can help.

If you’re single and earn over $90,000 (or $180,000 for families and couples), taking out hospital cover could reduce your income taxes by avoiding the MLS. For example, if you have our Basic Hospital Plus cover, you will avoid the need to pay the MLS. Plus depending on how much you earn, hospital cover could be cheaper than the MLS. Let us show you.


Private hospital coverageNoYes

Health Partners Basic Hospital Plus

MLS at tax time$10002$0
Health Insurance Premiums$0$986.251
What this could mean...John is reliant on the public system. He could experience long wait times and high out-of-pocket expenses if he requires private elective surgery.

With an average trip costing over $1,0004, John could be up for a hefty emergency ambulance bill.

Jane saved $13.75 by holding hospital cover throughout the tax year. She can choose her procedure schedule, specialist and stay in her own room3. Jane is covered for accidents, even for categories listed as exclusions.

Jane's cover offers unlimited emergency ambulance.

1. Income and premiums displayed for the entire tax year. Quoted Basic Hospital Plus premiums are for a single living in SA earning $90,001-105,000 aged under 65 (include the Tier 1 Govt. Rebate, or 16.405%).

2. Assumes taxpayer has no dependants

3. If the procedure’s clinical category is included on the Basic Hospital Plus cover (includes Joint reconstructions, Tonsils, adenoids and grommets and Dental surgery). Private room is subject to availability.

4. SA Ambulance Service, 2021

Why get hospital cover when there's a public system?

The reasons for choosing Hospital Cover can be varied, however there are a few common trends that are motivating people to take out cover, even when they have access to a good public health system. Here we outline some of the most common reasons.

Choose great value Hospital cover to suit your needs and budget. Compare here

Jump the queue

With Hospital Cover you can avoid long public hospital waits, which can take months or even years, by choosing your own doctor and timing for treatment.

Choose your own specialist

You get to choose your own specialist, as well as where and when you’ll be treated.

Have the same specialist care from start to finish

Continuity of care is something that can’t be undervalued.

Recover in the privacy of your own room

All levels of hospital policies cover you for a private room, where one is available, giving you comfort and privacy during your recovery.

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Let’s chat about your situation and whether you’d be better off. We’re here to help you understand health insurance, let’s talk.

Quote direct today or Request a call back

Posted: May 20 2021


The information contained here is of a general nature and does not take into account your personal medical situation. The information is not a substitute for independent professional medical advice and is not intended to diagnose, treat, cure or prevent any disease or used for therapeutic purposes. Should you require specific medical information, please seek advice from your healthcare practitioner. Health Partners does not accept any liability for any injury, loss or damage incurred by use of or reliance on the information provided. While we have prepared the information carefully, we can’t guarantee that it is accurate, complete or up-to-date. And while we may mention goods or services provided by others, we aren’t specifically endorsing them and can’t accept responsibility for them.

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