The Medicare Levy Surcharge was introduced by the Australian Government to encourage people who earn above a certain income to take out private hospital cover, and to use the private system to reduce demand on public hospitals.
If you’re single and earn over $90,000 (or a couple or family earning over $180,000), buying private hospital cover may help you to minimise your tax by avoiding having to pay the Medicare Levy Surcharge.
The Medicare Levy Surcharge is a surcharge of between 1% and 1.5% of your income if you don’t have private hospital cover. The good news is that you can buy a basic level of hospital cover for around the same price as (or even less than) the additional tax you might have to pay.
The Medicare Levy Surcharge is calculated on a daily rate, so if you only have private hospital cover for part of the financial year, you may have to pay Medicare Levy Surcharge for the remaining part of the year.
So it makes good sense to get your private hospital cover sorted out and avoid the Medicare Levy Surcharge.GET A QUOTE