If You Earn Over 90k And Don’t Have Private Hospital Cover You Could Be Throwing Away Thousands

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With every hard-earned dollar you make, the government wants more and more from you. For single Aussies who earn over 90k a year or families who earn over 180k, one way the government may be reaching into your pocket is with the Medicare Levy Surcharge.[1]

Not to be confused with the Medicare Levy, which is required to be paid by most Aussies, the Medicare Levy Surcharge (MLS) applies only to those Aussies with higher incomes who don’t have an eligible hospital cover. Depending on your income and family situation, you could end up paying 1%-1.5% more per year in taxes[2] than other Aussies—even if you’re only making a few dollars more than them.

This means you could potentially be paying thousands of dollars in additional taxes every year.

With the right hospital cover, you could avoid paying the MLS tax altogether and depending on your situation, you could gain some great health insurance benefits at the same time. The exact income tiers and rules surrounding the MLS tax change from time to time. This is why it’s important to check up on your health insurance at least once per year to ensure you have the cover you need to avoid paying this MLS tax.

Our Australian team of health insurance experts at Health Insurance Comparison understand this and stay up to date with all of the current information to help you identify a cover that suits your specific needs and budget. Over the last year, our free comparison service has saved Aussies an average of $340.68* off their yearly premiums by comparing health funds—and for high-earners without private hospital cover, the savings you could get just from avoiding this tax could be in the thousands.

Here’s How You Do It:

Step 1: Select your current life stage below.
Step 2: Once you select your preferred coverage options, you will have the opportunity to compare quotes from multiple health funds.

What You Need To Know About The Medicare Levy Surcharge

If you meet the minimum income thresholds for the Medicare Levy Surcharge, there is a lot of information that goes into calculating how much you could be required to pay. Here are a few tips and some information to get you started:

  1. The Medicare Levy Surcharge is an additional tax on higher-income earners who don’t have an appropriate level of hospital cover. This tax can range from 1%-1.5% depending on your income and family situation.[2] If your income is above the threshold that requires you to pay the Medicare Levy Surcharge it can be cheaper to take out an eligible private health insurance policy to avoid paying the additional tax.
  2. Starting on April 1, 2019, the government increased the maximum allowable excess for private health insurance.[3] This means to avoid paying the MLS tax, for singles, an appropriate level of hospital cover must have an excess of $750 or less. Couples or families must have an excess of $1,500 or less.[4]
  3. The Medicare Levy Surcharge (MLS) tax is often confused with the Medicare Levy tax of 2%, which is applicable to most Australians who earn over $27,069 per year and can’t be avoided by having a private insurance policy with hospital cover.[5] It is important to note that these two taxes are not the same thing. If your income is above the threshold that requires you to pay the MLS you can avoid paying it by having the proper level of private hospital cover.
  4. You must have a health insurance policy that includes an appropriate level of hospital cover with a registered Australian health insurer.[6] As there are so many health funds in Australia, we recommend speaking to one of our experts to get a better idea of your options.
  5. Important note for families: If you are a family with a combined income of more than $180,000 in the current financial year, to avoid paying the additional surcharge you must hold the appropriate level of private hospital cover for you, your partner, and all of your dependants. If your partner or any of your dependants don’t have the proper level of cover, you will have to pay the additional Medicare Levy Surcharge.[7]

In 2018 Our Experts Helped Thousands of Aussies Save Money on Their Health Insurance

Our experts at Health Insurance Comparison have years of experience dealing with health funds and insurance policies. We know all of the best practices to navigate the difficulties that can come with calculating the MLS tax and can help you make sense of it all. In the process, we can help you identify a more personalised hospital cover policy that may not only lower your tax burden, but give you the added benefits and peace of mind that comes with having private health insurance.

If you already have health cover but are unsure if it is at an appropriate level, it will only take a few short minutes for our award-winning experts to take a look at your current situation and see how much you may be able to save by comparing different health funds and policies.

Get Started Now:

Step 1: Select your state below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.

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This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

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