Health Insurance Tax Penalties & Benefits

The Australian Government has put in place a number of initiatives designed to get Australians covered by private health insurance. If you know what these initiatives are, you may be able to save on tax, time and money …

The Australian Government Rebate on Private Health Insurance

The Australian Government provides a rebate on private health insurance to help Australians meet their private health insurance costs. The private health insurance rebate is income tested, which means the level of your rebate will depend on your annual income, age and the number of dependent children you have.

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Learn more about the Australian Government Rebate.

The Medicare Levy Surcharge (MLS)

The surcharge is an additional tax (on top of the 2% Medicare Levy we all have to pay*) that's applied to Australian taxpayers who earn above the MLS thresholds and don't have private hospital cover.

If you're an individual earning $90,000 per year, for example and you don’t have hospital cover, the MLS means that you'll have to pay an extra $900 in tax (1% of your annual income). But with hospital cover available for less than $900, you could walk away with the benefits offered by a hospital only policy, avoid paying the tax and still have money left over.

The MLS will increase to 1.25% if you earn over 105,000 ($210,000 for couples, families and single parents) and 1.5% if you earn over $140,000 ($280,000 for couples, families and single parents).

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Learn more about the Medicare Levy Surcharge.