One of the benefits of living in Australia is the public healthcare system. In order to finance this benefit to the public, the government has created what is called a Medicare levy. The Medicare Levy is a 2% levy on your taxable income which is collected as part of the tax system. This amount is then used tpo provide medical assistance to those that are eligible for benefits. This pays for doctor visits and basic medical expenses.
There are some situations in which you do not have to pay the 2% Levy. The first exemption is if your income is less than $20,896, or, if you’re a senior earning less than $33,044. If this is the case, you are not required to pay the 2% Medicare levy. The second exemption is based on family income. If your total family income is less than $44,076 or $57,500 for seniors, the 2% Medical Levy is not required to be paid by you. In addition to income exemptions, there are health exemptions as well. These include being a blind pensioner, receiving sickness benefits from Centerlink or if the military is covering your medical expenses as a member of the armed forces.
It is important to understand that the Medicare Levy is different from the Medicare Levy Surcharge. The surcharge is a separate tax applying to higher earners. This surcharge begins to be payable if you are an individual with an income over $90,000 or if your family income is over $180,000. If your income falls into one of these categories you will be required to pay an additional 1%. This surcharge is increased to 1.25% if your personal income is between $105,000-$140,000 or if your family income is between $210,00-$280,000. The top increase of the surcharge reaches 1.5%. This applies if your personal income is $140,000 and above or if your family income reaches $280,000 and above.
The Medicare Levy and Medicare Levy Surcharge do not apply to those who are not eligible for public health benefits (i.e. you are on a visa that does not include healthcare coverage).
Note that if you have private health insurance you do not have to pay the Medicare Surcharge. This is the only portion of the levy that you can become exempt from. Regardless of having private health insurance or not the standard 2% Medicare Levy will continue to apply.