Make a Tax Saving
Did you know that having HIF hospital cover could actually SAVE you money?
The Medicare Levy Surcharge (MLS) is levied on Australian taxpayers who do not have private hospital cover and who earn above a certain income.
The MLS is a Federal Government initiative to encourage individuals to take out private hospital cover, and where possible, to use the private hospital system to reduce the demand on the public system.
The Medicare Levy Surcharge thresholds increase incrementally, as does the Medicare Levy Surcharge itself, depending on your annual household Adjusted Taxable Income (ATI).
The 2012/13 ATI thresholds are outlined in the table below:
|
POLICY TYPE |
ADJUSTED TAXABLE INCOME |
SINGLE:
COUPLE/FAMILY: |
$84,000
$168,000 |
$84,001 - 97,000
$168,001 - 194,000 |
$97,001 - 130,000
$194,001 - 260,000 |
$130,001 or more
$260,001 or more |
|
APPLICABLE MLS |
0% |
1.0% |
1.25% |
1.5% |
Will you avoid the Medicare Levy Surcharge in this financial year?
If you are likely to incur the MLS in the 2012/13 financial year, it's actually more cost effective to take out private hospital cover, as a number of our hospital cover options are actually cheaper than the additional tax you'll be forced to pay.
For example, if you're an individual earning $84,001 per year and you don't have hospital cover, the MLS means that you will have to pay an extra $840 in tax (1% of your annual income). And if you’re an individual earning $130,001 per year and you don’t have hospital cover, you will be forced to pay a huge $1,950 in extra tax (scary thought, hey). However, if you take out GoldStarter (our entry level hospital cover option) for just $527.65 per year, you'll not only have peace of mind knowing that you're covered if the worst happens but you'll also avoid paying the MLS, resulting in a saving of $1,422.35.
Similarly, if you're a couple (or family) with a combined income of $168,001 and you don't have hospital cover, the MLS means that you will have to pay an extra $1,680 in tax (and if you have a combined income of $260,001 and you don’t have hospital cover, the MLS means you will have to pay a whopping $3,900 in extra tax). However, if you take out GoldStarter hospital for just $1,067.50 per year, not only will you hold great value hospital cover but you'll also avoid paying the MLS, resulting in a saving of $2,832.50.
Some quick FAQ's about the Medicare Levy Surcharge.
To find out more about how the Medicare Levy Surcharge may impact you, please click on the panels below.
How is the MLS calculated?
The MLS is means-tested based on your Adjusted Taxable Income for the 2012/13 financial year, and will range from 0% to 1.5%. Please refer to the information above for more details.
Who won't have to pay the surcharge in 2012/13?
You will not have to pay the 2012/13 Medicare Levy Surcharge if:
-
your Adjusted Taxable Income is below the income threshold of $84,000 for a single person or $168,000 for a couple or family;
-
your Adjusted Taxable Income is over the $84,000 / $168,000 income thresholds but you have hospital insurance for yourself and all of your dependents with a registered health insurer, like HIF;
-
you are normally exempt from the Medicare Levy because you are a prescribed person and you do not have any dependents;
-
you are a high-income earner who had already purchased a hospital insurance product with a front-end deductible or excess greater than $500 for singles or $1,000 for families/couples, on or before 24 May 2000 (in this case you will continue to be exempt from the surcharge as long as you maintain continuous membership under the same hospital treatment policy).
How will having private hospital cover in 2011/13 help me to pay less tax?
If you are likely to incur the MLS this year, it is actually more cost effective to take out HIF hospital cover as a number of our hospital cover options are actually cheaper than the additional tax you'll be forced to pay (see top of this page for examples).