Medicare Levy & Medicare Levy Surcharge 2010

Medicare is the scheme that gives Australian residents access to health care. To help fund the scheme, most taxpayers pay a Medicare levy of 1.5% of their taxable income.

Reduction for people on low incomes
Your Medicare levy is reduced if your income is below a certain threshold. For 2009–10, your levy is reduced if your taxable income is $21,750 or less, and you don’t have to pay the levy at all if your taxable
income is $18,488 or less. The thresholds are higher for seniors. If your income is above the thresholds, you may still qualify for a reduction based on your family taxable income.
Medicare levy exemption
You may be exempt from paying the Medicare levy if you’re a foreign resident, a resident of Norfolk Island, not entitled to Medicare benefits or you meet certain medical requirements. If you’re entitled to an exemption you need to tell us on your tax return.
Medicare levy surcharge
You have to pay the Medicare levy surcharge (MLS) if your income is above a certain threshold and you – or any of your dependants – don’t have appropriate private patient hospital cover. In 2009–10 the surcharge may apply if your income for MLS purposes is more than:
  • $73,000 for a single person with no dependants
  • $146,000 for a couple with no children or one dependent child, plus $1,500 for each additional dependent child.
The surcharge is in addition to the 1.5% Medicare levy. The Medicare levy surcharge is 1% of:
  • your taxable income
  • your reportable fringe benefits, and
  • any amount on which family trust distribution tax has been paid.
(Source ATO)

Copyright 2014. My Tax Zone.