Confusion abounds as to what exactly the Medicare Levy Surcharge (MLS) is, so let’s clear it up once and for all.
It’s not the same as the Medicare Levy
First of all, the surcharge is not the same as the Medicare Levy. The levy is a compulsory tax that’s deducted from your annual taxable income, if you earn over $21,655±. It’s equal to 2% of your income and goes towards funding our public health system, Medicare.
±For the 2016-17 financial year. For seniors and pensioners entitled to the seniors and pensioners tax offset the income threshold is $34,244 for the 2016-17 financial year.
The MLS is a government surcharge
In addition to the Medicare Levy, the Federal Government introduced the MLS to help ease the burden on the public healthcare system. The MLS applies to people (including their dependants) who don’t hold an appropriate level of private hospital cover and earn over $90,000 a year as a single, or $180,000 as a couple/family.
The MLS levels applicable from 1 April 2017 to 31 March 2018~ are: