Medicare Levy Surcharge

Medicare Levy Surcharge

Affects higher income earners without hospital cover

The Medicare Levy Surcharge (MLS) is an additional tax on higher income earners who don’t have hospital cover for themselves and their family. The surcharge is in addition to the Medicare levy of 2% that applies to most taxpayers. No MLS is payable if you and your dependants* ​​hold Defence Health hospital cover. 

Permanent ADF personnel should note that although you do not need private health cover yourself, if your combined family income is above $210,000, your family will need to take out private hospital cover to avoid the MLS.

Families include single parents and couples, whether married or de facto. For families with children, the thresholds increase by $1,500 for each child after the first. For details on how the annual income for surcharge purposes is calculated, please refer to the Tax Office website link below.

*Under the Australian Taxation Office (ATO) definition for MLS purposes, a dependant includes:

• your spouse (married or de facto);
• your child under 21 years of age; and
• your child aged 21 to 24 who is studying full-time at a school, college or university.

If your income exceeds the relevant family income threshold, you and any dependant/s must all hold appropriate hospital cover to avoid paying the MLS.

Please note: The ATO's definition of a dependant for MLS purposes differs from Defence Health's definition of a dependant under a health insurance policy.

Members should refer to the ATO guidance when determining MLS liability.

For more information

• Visit the Australian Taxation Office website
• Visit the Private Health.gov website