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.
For the current financial year (2011/12), the income thresholds are:
-
$80,000 for individuals;
-
$160,000 for couples;
-
$160,000 for families; however the family threshold increases by $1,500 for each dependent child after the first dependent child (e.g. the threshold for a family with three dependent children would be $163,000)
So if you earn over these thresholds (for example, an individual earning $80,001) and do not hold private hospital cover, you will incur the MLS and subsequently have to pay an additional 1% in tax.
Will you avoid the Medicare Levy Surcharge?
If you are likely to incur the MLS this year, it can actually be 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 $81,000 per year and you don't have hospital cover, the MLS means that you will have to pay an extra $810 in tax (1% of your annual income). However, if you take out GoldStarter Hospital for just $452.50 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 $347.50.
Similarly, if you're a couple (or family) with a combined income of $161,000 and you don't have hospital cover, the MLS means that you will have to pay an extra $1,610 in tax. However, if you take out GoldStarter Hospital for just $913.75 per year, not only will you hold great value hospital cover but you'll also avoid paying the MLS, resulting in a saving of $696.25.
Try our handy tax savings calculator and see how much you could save.
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Still unsure whether having private hospital cover could save money by avoiding the Medicare Levy Surcharge? Don't worry, just use our interactive tax savings calculator and it will do all the work for you.
If the calculator confirms that you may incur the MLS, why not check out our great range of hospital cover options - HIF hospital cover starts from a tiny $1.24 a day.
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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 surcharge is calculated at the rate of 1% of taxable income. It is in addition to the Medicare Levy of 1.5%, which is paid by most Australian taxpayers. The MLS is imposed on individuals earning over the threshold who do not have an appropriate level of hospital insurance.
Use our handy online tax savings calculator to see if you will incur the Medicare Levy Surcharge.
What are the current income thresholds?
For the current 2011/12 financial year, the income thresholds are:
-
$80,000 for individuals;
-
$160,000 for couples;
-
$160,000 for families; however the family threshold increases by $1,500 for each dependent child after the first dependent child (e.g. the threshold for a family with three dependent children would be $163,000)
So if you earn over these thresholds (for example, an individual earning $80,001) and do not hold private hospital cover, you will incur the MLS and subsequently have to pay an additional 1% in tax.
Use our handy online tax savings calculator to see if you will incur the Medicare Levy Surcharge.
Who won't have to pay the surcharge?
You will not have to pay the 2011/12 Medicare Levy Surcharge if:
-
your taxable income is below the income threshold of $80,000 for a single person or $160,000 for a couple or family;
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your taxable income is over the income threshold but you have hospital insurance for you and all of your dependents with a registered health insurer, like HIF;
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you are normally exempt from the Medicare Levy because you are a prescribed person and you do not have any dependents;
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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).
Use our handy online tax savings calculator to see if you will incur the Medicare Levy Surcharge.
How will having private hospital cover in 2011/12 help me to pay less tax?
If you are likely to incur the MLS this year, it can actually be 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.
For example, if you are an individual earning $81,000 per year and you don't have hospital cover, the MLS means that you will have to pay an extra $810 in tax (1% of your annual income). However, if you take out HIF GoldStarter Hospital for just $452.50 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 $347.50.
Similarly, if you're a couple (or family) with a combined income of $161,000 and you don't have hospital cover, the MLS means that you will have to pay an extra $1,610 in tax. However, if you take out HIF GoldStarter Hospital for just $913.75 per year, not only will you hold great value hospital cover but you'll also avoid paying the MLS, resulting in a saving of $696.25.
Use our handy online tax savings calculator to see if you will incur the Medicare Levy Surcharge.
