Keep the Medicare Levy Surcharge off your tax bill
The Medicare Levy Surcharge will apply if you earn more than the threshold of $80,000* per year as an individual or a combined $160,000* per year for most couples or families and you do not have an appropriate level of hospital insurance. The threshold increases by $1,500* for each additional child after the first.
The surcharge is equal to 1% of your taxable income and applies in addition to your Medicare Levy.
By taking out Defence Health hospital insurance you will be exempt from paying the 1% Medicare Levy Surcharge. For a full year exemption you will need to have your cover in place for the entire financial year.
If you need financial advice please speak to your accountant or financial advisor.
* These Medicare Levy Surcharge income thresholds are applicable for the 2011/12 taxation year. The 2010/11 thresholds were $77,000 for singles and $154,000 for couples and families (with the family threshold increasing by $1,500 for each dependant child after the first).
Medicare Levy Surcharge and the ADF
Single permanent ADF members are exempt from the Medicare Levy Surcharge.
However, a couple or family with a permanent ADF member will have their combined income included for the purpose of determining Medicare Levy Surcharge liability.
The 1% surcharge is then levied on both you and your spouse's individual taxable income.
An ADF family with Defence Health hospital cover for a civilian spouse and any dependent children will be exempt from the Medicare Levy Surcharge.
Threshold income test
The income test for surcharge purposes is used to determine whether you are liable to pay, not how much you will pay. For more information on the threshold income test go to the Australian Taxation Office website for individuals and search for 'Medicare Levy Surcharge income test'.
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Keep the Medicare Levy Surcharge off your tax bill
The Medicare Levy Surcharge will apply if you earn more than the threshold of $80,000* per year as an individual or a combined $160,000* per year for most couples or families and you do not have an appropriate level of hospital insurance. The threshold increases by $1,500* for each additional child after the first.
The surcharge is equal to 1% of your taxable income and applies in addition to your Medicare Levy.
By taking out Defence Health hospital insurance you will be exempt from paying the 1% Medicare Levy Surcharge. For a full year exemption you will need to have your cover in place for the entire financial year.
If you need financial advice please speak to your accountant or financial advisor.
* These Medicare Levy Surcharge income thresholds are applicable for the 2011/12 taxation year. The 2010/11 thresholds were $77,000 for singles and $154,000 for couples and families (with the family threshold increasing by $1,500 for each dependant child after the first).
Medicare Levy Surcharge and the ADF
Single permanent ADF members are exempt from the Medicare Levy Surcharge.
However, a couple or family with a permanent ADF member will have their combined income included for the purpose of determining Medicare Levy Surcharge liability.
The 1% surcharge is then levied on both you and your spouse's individual taxable income.
An ADF family with Defence Health hospital cover for a civilian spouse and any dependent children will be exempt from the Medicare Levy Surcharge.
Threshold income test
The income test for surcharge purposes is used to determine whether you are liable to pay, not how much you will pay. For more information on the threshold income test go to the Australian Taxation Office website for individuals and search for 'Medicare Levy Surcharge income test'.
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