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Medicare Levy Surcharge and Lifetime Health Cover Loading

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My husband and I have had private health insurance since well before we turned 31 to avoid the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) Loading. However, we are both now 37 and considering dropping private health insurance as we don't see the value in it.

1. Re MLS, if my husband earns more than the income threshold of $90k as a single, would this get overriden by the fact that we would be assessed as a couple that earns less than the household income threshold of $180k and therefore both do not have to pay the Medicare Levy Surcharge?

2. If we drop private health insurance now at the age of 37 but decide to join up again in 13 years time when we are 50, how would the LHC loading be calculated? Would it just be calculated based on those 13 years without private health (taking into account private health insurance was held from age 31 to 37)?

3. Can you please confirm that one can be without private health insurance for a total of 1094 days (3 years less one day) without the LHC coming into effect?

Would appreciate some clarification, thank you in advance.

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ATO Certified

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Hi @Salbal,

 

Welcome to our Community!

 

A family's base income threshold for Medicare levy surcharge purposes is $180,000, regardless of your individual's income. However, income for MLS purposes isn't just taxable income; it's the sum of the following items (and your spouse):

  • taxable income
  • reportable fringe benefits
  • total net investment losses
  • reportable super contributions
  • if you have a spouse, their share of the net income of a trust on which the trustee must pay tax
  • exempt foreign employment income

We provide general information about tax and super topics here on our Community and the Lifetime health cover lodging isn't a tax topic. You'll need to speak to your health insurance provider directly for clarification on these matters.

 

Thanks, JodieH.

1 REPLY 1
Highlighted

Best answer

ATO Certified

Community Support

Replies 0

Hi @Salbal,

 

Welcome to our Community!

 

A family's base income threshold for Medicare levy surcharge purposes is $180,000, regardless of your individual's income. However, income for MLS purposes isn't just taxable income; it's the sum of the following items (and your spouse):

  • taxable income
  • reportable fringe benefits
  • total net investment losses
  • reportable super contributions
  • if you have a spouse, their share of the net income of a trust on which the trustee must pay tax
  • exempt foreign employment income

We provide general information about tax and super topics here on our Community and the Lifetime health cover lodging isn't a tax topic. You'll need to speak to your health insurance provider directly for clarification on these matters.

 

Thanks, JodieH.