Medicare Levy Surcharge 

As its name suggests, the Medicare Levy Surcharge is imposed on higher-income earners who are eligible for Medicare, but do not have an appropriate level of private hospital insurance with a registered health fund.

The levy is calculated as a one per cent surcharge of taxable income. This means that those who are charged the Medicare Levy Surcharge incur 1 per cent more tax than they would if they had private hospital insurance.

It is designed to encourage higher-income earners to take out private hospital insurance and further reduce the demand on the public health system.

Under the scheme, you are considered a high-income earner if:

  • You are a single person without a dependant child or children and you have a taxable income greater than $50,000; or
  • You are a member of a family and the combined taxable income of you and your spouse is greater than $100,000.

You are considered to be a family if you have:

  • A spouse or
  • Any dependant children or
  • A spouse and dependant children

The family income threshold increases by $1,500 for each dependant child after the first.

For further information, email Navy Health, or contact the Australian Taxation Office on 13 28 62. Visit their web site at http://www.ato.gov.au/ or speak with your financial advisor.