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grimbleman(Newbie)Newbie
7 June 2022

Curious regarding whether or not, having cover under a complying hospital insurance product as an (adult) dependant on a family policy is sufficient to avoid paying the Medicare Levy Surcharge (MLS).


A person who is not a full time student and is over 21 is not considered a dependant for MLS purposes.

However - it is not explicitly stated anywhere that being 'covered' is necessarily contingent with holding your own policy. I.e the ATO page states you have to hold 'an appropriate level of hospital cover' and other references only note the requirement that a person have some level of compliant private hospital cover.


It is not mentioned that there is a requirement as to your role on a given policy, to be counted as having cover, as far as avoiding paying the MLS. '


Interested in any thoughts or knowledge, and hopefully a source!

Thanks.

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RachATO(Community Support)Community Support
8 June 2022

Hi @grimbleman,


The Australian private health government agency have provided an answer to this :)


Under Adult dependents, they advise that individuals over the age of 21who are listed on a family hospital policy and who earn over the Medicare levy surcharge (MLS) income threshold are liable to pay MLS. To meet the criteria for MLS exemption, they'd have to take out hospital cover for themselves.

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Most helpful reply

RachATO(Community Support)Community Support
8 June 2022

Hi @grimbleman,


The Australian private health government agency have provided an answer to this :)


Under Adult dependents, they advise that individuals over the age of 21who are listed on a family hospital policy and who earn over the Medicare levy surcharge (MLS) income threshold are liable to pay MLS. To meet the criteria for MLS exemption, they'd have to take out hospital cover for themselves.

grimbleman(Newbie)Newbie
9 June 2022

Hi Rachel,


I had read that on the PH website, which was what alerted me to the scenario. It seems to me that it doesn't directly line up with what is in the legislation (i.e I can't find anything that directly indicates any requirement other than that a given person be 'covered' by PHI) and was curious whether that is correct. They directed me to the ATO as the body that applies the tax.


Thanks for your response!

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Medicare levy surcharge and Adult dependants covered on their parents health insurance policy | ATO Community