What’s the difference between the Medicare Levy and the Medicare Levy Surcharge?
Medicare gives Australian residents access to a range of medical services, low cost prescriptions and public hospital health care. Medicare is partly funded by the Australian public – most people pay a Medicare levy of 2% of their taxable income.
Your Medicare levy may be reduced if your taxable income is below a certain threshold. In some cases you may not have to pay the levy at all. You may be eligible to claim a full or half exemption if you:
were a blind pensioner
received sickness allowance from Centrelink
were entitled to full free medical treatment for all conditions under Defence Force arrangements or Veterans’ Affairs Repatriation Health Card (Gold Card)
for the full year – you can claim a full exemption for the Medicare levy
for only part of the year – you can claim a full exemption for that period if
you did not have any dependants for that period, or
all your dependants were in an exemption category for that period.
I'm not entitled to Medicare benefits
You are exempt from paying the Medicare levy if you:
were a temporary resident and you did not have any dependants or they were all in an exemption category for that period
were not an Australian citizen
However, in order to claim an exemption you must have applied for and received a Medicare Entitlement Statement from the Department of Human Services before you lodge your tax return. If you have not received the exemption before you lodge, your claim may be disallowed and you will be charged the Medicare Levy.
If you’re entitled to a Medicare Levy exemption and you haven’t claimed it, you may still be able to by lodging an amendment.
I have private health insurance but you charged me Medicare Levy Surcharge!
If you earn more than the MLS income thresholds, you’ll be exempt from paying MLS as long as you have an appropriate level of private hospital insurance. Private patient hospital insurance is provided by registered health insurers for hospital treatment in Australia.
An ‘appropriate level of cover’ differs depending on your situation. You must have
an excess of $500 or less as a single, or
an excess of $1,000 or less as a couple or a family.
General cover, also known as 'extras', is not private patient hospital cover. Travel insurance and cover from overseas funds are also not considered private patient hospital cover for the purposes of the MLS.