In broad terms the Medicare levy surcharge applies to individuals who do not have adequate private health hospital insurance to cover themselves and their dependents and their income exceeds the relevant thresholds.
But there are a few things to consider to ensure you meet your obligations and are in fact exempt from the surcharge:
- an adequate private health insurance policy must include cover for hospital and not just ancillary (or extras)
- any excess payable on hospital admission must not exceed $500 for a one-person policy, or more than $1,000 for all other policies
- if you are a Defence Force member and have dependents (including a spouse) you should review your circumstances as only a member can be entitled to full free medical treatment, and the exemption from the Medicare levy surcharge does not extend to the spouse
- spouses with separate finances should review their circumstances, particularly when one spouse has adequate private health hospital insurance and the other spouse does not
- taxpayers who separate or divorce may also find themselves under scrutiny in regards to the Medicare levy surcharge
Information can be found on the ATO website, or contact me to discuss.