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Combined Income and the Medicare Levy Surcharge

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Person A has a taxable income of $102,100.

 

Person B has a taxable income of $65,400.


Person A and B are living together in a de facto relationship. Neither of them have dependent children nor do they have any private health cover. 

Person B, when filing their return via MyGov, was eligible for the full MLS exemption and was not given to option to change it. Person A, however, has the option to declare a full exemption or half an exemption for the full year but is unsure which one to claim given their combined income is $167,500.

 

Will Person A be liable for the surcharge at any stage? Which option should they pick should they be applicable for the MLS exemption? 

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ATO Certified Response

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Hello @Teal_Evergreen

 

The income threshold that determines if you need to pay the MLS is different for singles and families, so it depends on if persons A and B were in a relationship for the full year or not.

 

If they were in a relationship for the full year:

  • Person A and B will both be exempt from the MLS because their income is below the family threshold of $180,000

 

If they were in a relationship for part of the year:

  • Person A will be liable for MLS for the number of days they were single because their income is above the singles threshold of $90,000
  • Person B will not be liable for MLS because their income is below $90,000

 

Hope this makes sense Smiley Happy

 

You can find more information about the MLS thresholds on our website.


 

 

1 REPLY 1

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hello @Teal_Evergreen

 

The income threshold that determines if you need to pay the MLS is different for singles and families, so it depends on if persons A and B were in a relationship for the full year or not.

 

If they were in a relationship for the full year:

  • Person A and B will both be exempt from the MLS because their income is below the family threshold of $180,000

 

If they were in a relationship for part of the year:

  • Person A will be liable for MLS for the number of days they were single because their income is above the singles threshold of $90,000
  • Person B will not be liable for MLS because their income is below $90,000

 

Hope this makes sense Smiley Happy

 

You can find more information about the MLS thresholds on our website.