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Change in Medicare levy surcharge (MLS) and Private Health Insurance (PHI) rebate from 1 July 2015

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From 1st July 2015, the government has frozen the income thresholds for the Medicare levy surcharge and private health insurance rebate for three years, starting from 1 July 2015 to 30 June 2018. This pause will continue further for another three years from 1 July 2018 to 30 June 2021 which was announced by the government in 2016-17 Federal Budget.

Health care for Australian residents is partly funded by taxpayers by collecting 2% Medicare levy from taxpayers. Medicare levy surcharge (MLS) is imposed on taxpayers who earn above a certain level of income threshold but do not have an appropriate level of private hospital health insurance. When a taxpayer has an appropriate level of private hospital health insurance they will not have to pay Medicare levy surcharge and depending on income, taxpayers might be eligible for private health insurance rebate. The private health insurance rebate will be received by taxpayers only if their income is below the relevant income threshold.





Private health insurance rebate and Medicare levy surcharge income thresholds for 2015–16, 2016–17 and 2017–18


Income thresholds


Base tier

Tier 1

Tier 2

Tier 3


$90,000 or less

$90,001 – $105,000

$105,001 – $140,000

$140,001 or more


$180,000 or less

$180,001 – $210,000

$210,001 – $280,000

$280,001 or more

Note: The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child.

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