Question

what is the Medicare Levy Surcharge (MLS) and who is required to pay it? 120–150 words.

Include the Special definition of income for the purpose and the income thresholds according to ATO.

Answer 1

The Medicare levy surcharge (MLS) is levied on taxpayers of Australia who do not have an appropriate level of private hospital insurance and are earning above a specified income. It is payable in addition to the Medicare levy.

To determine whether you are liable to pay the MLS, and the rate of payment; a special definition of income (also known as income for MLS purposes) is used. It is different to the taxable income. According to special definition of income for MLS purposes the base income threshold (under which you are not liable to pay the MLS) will be $90,000 for singles and $180,000 for families. But you are not required to pay the MLS if the family income exceeds the threshold however your own income for MLS purposes was $21,980 or less.

	Threshold	Tier 1	Tier 2	Tier 3
Singles	90,000 or less	90,001 to 105,000	105,001 to 140,000	140,001 or more
Families	180,000 or less	180,001 to 210,000	210,001 to 280,000	280,001 or more
Rates	0%	1.00%	1.25%	1.50%