Don't have Hospital cover? If you earn over $90,000 as a single or $180,000 as a couple or family, this will cost you more at tax time
The Medicare Levy Surcharge (MLS) is a levy paid by Australian taxpayers who do not have Hospital cover and who earn above a certain income. The surcharge is calculated at the rate of 1% to 1.5% of your income depending on what you earn. You pay this surcharge in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers.
You can't avoid paying the MLS by taking out Hospital cover shortly before June 30 hits, as it is calculated on the days that you didn't have Hospital cover. Still, if you sign up now, you won't have to worry about paying it when next year's tax time comes around...and it always seems to come around again quickly.
There is also the Lifetime Health Cover (LHC) loading to consider. This is a penalty which applies to Australians who didn't sign up for private health insurance by the 30th of June following their 31st birthday. For every year that you're over the age of 31 and not covered by private hospital insurance, a 2% loading is added to your premiums, or more accurately to the 'base rate' of your Hospital cover. (This loading does not apply to Extras or Ambulance-only cover.) You must pay this loading for ten years before it will be removed.
The maximum LHC loading is only capped at 70% so even if you already have a loading, it is best to minimise the loading by signing up sooner rather than later. Paying a high loading means that you will pay so much more for your health insurance premiums than your friend who signed up before they turned 31.
Contact our friendly and knowledgeable team on 1300 564 646 to find out which of our great-value health covers is right for you and your family.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.