Is Marriage The Only to Avoid Medicare Levy Surcharge, Other than Buying PHI?

tooblue on 28/09/2023 - 18:14
Last edited 28/09/2023 - 18:15

From ATO website, it seems all personal income are included in this Income for Medicare levy surcharge (MLS) purposes. So none of salary sacrifice, super contribution, investment losses will work.

Luckily I don't find the days of have a spouse is pro rata. Does it mean if one gets married on 30 June his/her MLS threshold will jump from single $93,000 to family $186,000?

Your income for MLS purposes is the sum of the following items for you (and your spouse, if you have one):

  • Taxable income
    include the net amount on which family trust distribution tax has been paid
    don't include any assessable first home super saver (FHSS) released amount for the income year under the FHSS scheme.

  • Reportable fringe benefits.
    Total net investment losses – the sum of
    net financial investment losses
    net rental property losses.

  • Reportable super contributions – the sum of
    reportable employer super contributions
    deductible personal super contributions.

  • If you have a spouse, their share of the net income of a trust on which the trustee must pay tax (under section 98 of the Income Tax Assessment Act 1936) and which has not been included in their taxable income.

If you had exempt foreign employment income, add it to your taxable income if your taxable income is $1 or more.

If you meet both of the following conditions, you can reduce income for MLS purposes by any taxed element of the super lump sum, other than a death benefit, that does not exceed your (or your spouse's) low rate cap:

  • you (or your spouse) are aged from your (or their) preservation age to under 60 years old
  • you (or your spouse) received a super lump sum.
Financial Medicare

Comments

  • Iwantthebestprice on 28/09/2023 - 18:21
    +52

    I would suggest trying to avoid finding loopholes paying for the Medicare levy which provides all Australians with guaranteed health care/cover, and just pay your share of the Medicare service levy and be thankful we have one of the best health systems around.

    Next post on here - why Australia should abolish Medicare and go down the path of American health care system… 😒

    • Benoffie on 28/09/2023 - 18:37
      +14

      Agreed. Id rather pay an increased levy than continue to see the bulk billing butchery that is occurring now.

      • reactor-au on 29/09/2023 - 11:00
        +1

        Surely any increase to the levy would be greater than the "bulk billing butchery" ?

      • tooblue on 29/09/2023 - 11:12

        I agree with you too to pay the levy. But does it have anything to do with this topic of Medicare Levy Surcharge? I bold it for your convenience if you could not read.

    • Protractor on 28/09/2023 - 19:13
      -5

      There should be a thread topic section for ppl who want to be parasites on the system and make everyone else fund a lifestyle. I blame imported attitudes and the pox of social media cancer on the back of Howard validating self interest and greed.

    • ssfps on 28/09/2023 - 23:21
      +2

      How did the gov pay for the better medicare system in the past, back when doctors got their pay increases, before the medicare levy surcharge was introduced? Did introduction of the "levy" surcharge increase scope of medicare? No? At least the levy and surcharge are actually earmarked for medicare right? Oh they aren't?

      Next up tell us how you think we should all work for free to support our fellow citizens, and how good you think dirty leather tastes.

      If i were to use your own language in a below comment, i would say something like "you're an absolute idiot if you think it's anything other than a general tax with good marketing to line the pockets of the rich and support a crumbling inefficient bureaucracy", but i'll avoid making that personal attack.

        • ssfps on 29/09/2023 - 23:13

          @tooblue I think you meant to respond to @Iwantthebestprice

    • LFO on 29/09/2023 - 11:55

      "be thankful we have one of the best health systems around"

      You need to get out a lot more and then compare … and then judge.

    • Nickels n Dimes on 29/09/2023 - 19:25

      Our public health system / Medicare is fairly okay for OECD level, and better than most countries that have none.

      However it still lacks in a great number of areas, such as no dental for >18s, no optical or hearing or mobility treatments, non-emergency surgeries, severely limited GP bulk-billing, extraordinarily long waiting lists even for critical operations, overloaded hospitals / ERs, no cover for psychology, physiotherapy, complementary therapy or outpatient care, those just part of a long list, much of which is covered in public systems in Europe or UK.

      According an extensive global survey by WPP and University of Pennsylvania, the 10 Countries With the Most Well-Developed Public Health Systems are in ranked order:

      Sweden
      Canada
      Finland
      Denmark
      Norway
      Switzerland
      Germany
      Australia
      United Kingdom
      Belgium

    • tooblue on 30/09/2023 - 08:24
      -1

      No.
      I am not wealthy enough like Gina Rinehart or Andrew Forrest to pay big bucks to lawyers and accountants to find loopholes.
      Nor am I powerful enough like PHI bosses to lobby the politicians to implement MLS policies tax loopholes to benefit myself.
      I am just a hardworking average Joe wanting to play by the rules. If this is a crime, I guess you never try to reduce you tax. Good on you.

      But from now on I would agree with whatever you say as there is no point to argue with a person that could not read or write, a person could not differentiate Medicare service levy and Medicare Levy Surcharge, a person could not use "then" and "than", "whether" and "weather", "existing" correctly repeatedly in one sentence.

      Before you "Iwantthebestprice on 28/09/2023 - 22:06: I know, but I get tired of trying to explain economics 101 to morons.", maybe go to a prep student to rework your literacy 101?

      Iwantthebestprice 14 hours 40 min ago
      @SBOB: Of course taxes funded it, like all other government programs, but the cost grew greater then than what could be covered by exisiting existing taxes, … When a national program cost more then than what exisiting existing tax revenue can cover the government will always introduce a levy weather whether is be a liberal or labour government they are both guilty of this
      https://www.ozbargain.com.au/comment/14350234/redir

  • Fredfloresjr on 28/09/2023 - 18:22
    +2

    We have to pay medicare levy for those who ordered Krispy Kreme today. lol

  • PissLUR on 28/09/2023 - 18:57
    +22

    you can choose to earn less money to avoid the surcharge.

  • Protractor on 28/09/2023 - 19:10
    -2

    Pariah

    • tooblue on 29/09/2023 - 11:16
      +1

      Thanks for signing you name.

  • [Deactivated] on 28/09/2023 - 19:25
    +15

    I mean, is there a better foundation for a happy marriage than to avoid the Medicare surcharge levy?

  • deme on 28/09/2023 - 19:26
    +18

    Fun fact the liberals introduced the Medicare levy surcharge.

    Medicare was fully costed under Labour when they introduced it. There is no reason for the surcharge.

    Then Howard came along and got his grubby hands on it.

    You are an idiot it you vote liberals because you think they are good at budgeting.

      • deme on 28/09/2023 - 19:28
        +3

        Medicare was fully costed under Labour when they introduced it. There is no reason for the surcharge.

        You are not smart are you?

      • SnowDragon on 28/09/2023 - 22:13
        +3
        • Tries to make a snappy response
        • Doesn't even know the difference between your and you're
        • Instantly loses all credibility

        I wonder which government funded your education.

        • Iwantthebestprice on 28/09/2023 - 22:30
          -5

          I didn’t know typing the word Your vs You’re gives you no credibility in discussing the Medicare levy surcharge. But if that’s the focus of this argument then so be it. And yes I did use government funded education in primary and high school if that helps your argument in anyway.

          • SnowDragon on 28/09/2023 - 22:36

            @Iwantthebestprice: Your mistake was trying to call someone an idiot while also coming across as an idiot yourself by using the incorrect adjective.

    • Iwantthebestprice on 28/09/2023 - 19:30
      -5

      Fun fact for a simple mind - Medicare levy introduced 1997. Population in 1997 was 17 million. Population in 2023 is 26.5 million. The government is right to expect tax payers to contribute to a national health care system to care for almost 30 million people.

      • deme on 28/09/2023 - 19:33
        +8

        Medicare has always been paid for by taxes.

        Population in 1997 was 17 million. Population in 2023 is 26.5 million.

        Think about this, more people = more people paying taxes.

        When was the last time the Liberal government produced a budget surplus?

        • Iwantthebestprice on 28/09/2023 - 19:37
          -6

          Just having an increase in population does not mean Medicare is magically funded. More people using Medicare mean a higher cost, the small amount the government ask you to contribute does not come close to even covering the cost of the yearly Medicare cost.

          • deme on 28/09/2023 - 19:39
            +3

            @Iwantthebestprice:

            small amount the government ask you to contribute does not come close to even covering the cost of the yearly Medicare cost.

            WTF?!? Medicare is fully funded by taxes.

            magically funded

            tax

            small amount the government ask you to contribute does not come close to even covering the cost of the yearly Medicare cost.

            Yes it does, how else would it get money. I get the feeling you don't realise Medicare is funded by taxes.

            • Iwantthebestprice on 28/09/2023 - 19:54
              +1

              @deme: Medicare is funded by mixed revenue of taxes and levies. The entire Medicare system is not paid for by the $1500 or so each taxpayer pays each year in the levy obviously.

              • Benoffie on 28/09/2023 - 21:39
                +4

                @Iwantthebestprice: Dont bother arguing. Youll never convince them that all 26 million people arent taxpayers or that the biggest consumers of Medicare are generally not the biggest contributors to the levy.

                100% whoosh 💨

                Edit

                Current figures per Health Dept 23/24

                Total department spend - $137.6b
                Total for Health - $101b
                Medicare investment (top up) - $5.7b

                22/23 - $39.5b (37.3% Total health expenditure - budget papers APH)

                Past figures:

                2011/12 - revenue $9b, cost $17.6b (APH)
                2013/14 - $10.3b
                2014/15 - $14.64b
                2015/16 - $15b (https://www.researchgate.net/figure/Medicare-levy-and-total-…

      • SBOB on 28/09/2023 - 19:34

        Where did the funding come from in 1997 compared to 2023? Was there some magic beanstalk or something meaning it didn't need to be funded by existing tax revenue?

        • Iwantthebestprice on 28/09/2023 - 19:39
          -6

          Oh the anti liberal bot has joined the chat. No one was talking politics here, you can make it political but that was not the point. The point is the government is right to expect taxpayers to contribute to a national health care system

          • deme on 28/09/2023 - 19:40
            +3

            @Iwantthebestprice: Err.. SBOB didn't mention any political party.

          • deme on 28/09/2023 - 19:45
            +2

            @Iwantthebestprice: https://ministers.treasury.gov.au/ministers/jim-chalmers-202…

            The last surplus under Liberals was under Howard, he left office 16 years ago.

          • SBOB on 28/09/2023 - 19:48

            @Iwantthebestprice:

            right to expect taxpayers to contribute to a national health care system

            are you saying it was never contributed to by taxpayers before an additional surcharge or levy was introduced?

            • Iwantthebestprice on 28/09/2023 - 19:51

              @SBOB: Of course taxes funded it, like all other government programs, but the cost grew greater then what could be covered by exisiting taxes, as such a Medicare levy was introduced. This is no different to any other levy’s we pay. Within 10 years there will be an NDIS levy because the cost of NDIS has already outgrown by far what the government expected it to be. When a national program cost more then what exisiting tax revenue can cover the government will always introduce a levy weather is be a liberal or labour government they are both guilty of this

              • deme on 28/09/2023 - 20:00
                +3

                @Iwantthebestprice: This is the Medicare Levy Surcharge, the scam where if you don't pay for junk insurance to private health insurance you get slogged with a surchage… by Liberals.

                But wait… the tax payers also fund another scam… the Private Health Insurance rebate… by Liberals

                The Medicare Levy (not surcharge) was introduced with Medicare in 1984… by Labour. Which fully funded Medicare.

                • Iwantthebestprice on 28/09/2023 - 20:02

                  @deme: I agree with junk insurance policies however the levy was introduced so people on a higher income were removed from the public health system and used the private health system to ease the burden on the public health system. We as a country need to avoid the public health system crumbling under the pressure of the entire population using it. I was a child when the government introduced Medicare levy surcharge so you may be more across it then I am, but I don’t see a problem asking people who earn X dollars to pay for insurance to avoid using the public health system..

                  • deme on 28/09/2023 - 20:07
                    +5

                    @Iwantthebestprice: Public Health System covers way more things than the private system does too.

                • Iwantthebestprice on 28/09/2023 - 20:04
                  +1

                  @deme: Why do you think people earning $150,000+ a year should not have private health insurance and use the private health system rather then the public system?

                  • deme on 28/09/2023 - 20:06
                    +5

                    @Iwantthebestprice: Oh that's easy: Because you are paying $3000 a year for it.

                    Should people on 150k+ pay tolls on roads but people under it get it for free?

                    And since when is going to a GP, or even a surgeon covered by Private Health Insurance?
                    Legally, PHI cannot cover anything medicare does (for those eligible for medicare)

                    If you get your knee fixed at a private hospital your bill:

                    Hospital -> PHI
                    Surgeon -> Medicare
                    Antithesis -> Medicare

                • ssfps on 28/09/2023 - 23:36
                  +1

                  @deme: Glad you called out the surcharge and the rebate as scams. Most people don't seem to realize they are part of the push toward us adopting the phi-cartel health care model, which people label the "American system".

              • Benoffie on 28/09/2023 - 22:01

                @Iwantthebestprice: ^ This.

                And Morrison was tipped to increase the Medicare levy because he saw the writing on the wall re NDIS. Now you have Shorten trying desperately to cull the behemoth it has become. If it isnt reigned in, it will trigger a levy or tax increase

                • Iwantthebestprice on 28/09/2023 - 22:06
                  +1

                  @Benoffie: I know, but I get tired of trying to explain economics 101 to morons. I feel like the people that comment on here have no idea how money/funding works. I can guarantee within the next decade a levy will be introduced

      • ssfps on 28/09/2023 - 23:27
        -2

        Fun fact for a simple mind - Medicare levy introduced 1997. Population in 1997 was 17 million. Population in 2023 is 26.5 million. The government is right to expect tax payers to contribute to a national health care system to care for almost 30 million people.

        You're implying that the increased population since 1997 (~ 10 million) - all of which comes from immigration - aren't contributing their fair share of taxes that the previous 17 million were. (Or you believe medicare costs don't scale linearly with population).

        That's pretty racist to say these immigrants in the last 25 years aren't working and paying tax, but are using our medicare system like parasites, shame on you!

    • jacobb on 28/09/2023 - 21:33
      +1

      In 1997 tax rates were a lot higher than they are now. Even with the Medicare surcharge you are paying less tax.

      • ssfps on 28/09/2023 - 23:30

        I don't believe you. The tax brackets were lower, but we've had 25 years of inflation since then.

      • Alice McGregor on 29/09/2023 - 12:18

        Not really

        Tax to GDP in 97 was 28.6% in 2020 was 28.5%
        Tax on personal income to GDP in 97 was 12.02% and 2020 was 11.45%

        https://data.oecd.org/tax/tax-on-personal-income.htm#indicat…

      • Nickels n Dimes on 29/09/2023 - 20:46

        It's hard to get clear figures on that because of the ATO's 'progressive taxation system', tax rate varies according to income and incomes vary each year according to population, location, unemployment and working populations can affect the averages, and of course CEOs today would skew the whole system if their income was accurately represented in the ATO/ABS data; Worse still as the 1%s' 90% income is spread in shares and offshore funds, etc, we can never see a real figure on median incomes.

        Using abs.gov.au figures on the median income for a given year from 1995 to 2020:

        fin. year gross tax net net adj. for inflation
        95/96 $1,361.00 $167.94 $1,193.06 $1,193.06
        96/97 $1,396.24 $173.65 $1,222.59 $1,190.80
        97/98 $1,431.48 $179.56 $1,251.92 $1,186.82
        98/99 $1,466.72 $185.66 $1,281.06 $1,181.14
        99/00 $1,501.96 $191.97 $1,309.99 $1,173.75
        00/01 $1,537.20 $198.50 $1,338.70 $1,164.67
        01/02 $1,572.44 $205.25 $1,367.19 $1,153.91
        02/03 $1,607.68 $212.23 $1,395.45 $1,141.48
        03/04 $1,642.92 $219.44 $1,423.48 $1,127.39
        04/05 $1,678.16 $226.91 $1,451.25 $1,111.66
        05/06 $1,713.40 $235.69 $1,477.71 $1,093.50
        06/07 $1,748.64 $243.71 $1,504.93 $1,074.52
        07/08 $1,783.88 $257.11 $1,526.77 $1,050.42
        08/09 $1,819.12 $271.25 $1,547.87 $1,024.69
        09/10 $1,854.36 $286.17 $1,568.19 $997.37
        10/11 $1,889.60 $301.91 $1,587.69 $968.49
        11/12 $1,924.84 $318.51 $1,606.33 $938.09
        12/13 $1,960.08 $336.03 $1,624.05 $906.22
        13/14 $1,995.32 $354.51 $1,640.81 $872.91
        14/15 $2,030.56 $374.01 $1,656.55 $838.21
        15/16 $2,065.80 $394.19 $1,671.61 $802.37
        16/17 $2,101.04 $404.05 $1,696.99 $770.43
        17/18 $2,136.28 $414.15 $1,722.13 $737.07
        18/19 $2,171.52 $424.50 $1,747.02 $702.30
        19/20 $2,206.76 $435.11 $1,771.65 $666.14
        20/21 $2,242.00 $430.29 $1,811.71 $634.10

        It seems pretty clear that what you could buy for your Aussie dollar in 1995 was a lot more than you can today, and the government is taking more than double it's cut of income tax compared to then.
        Yes, we get higher quality services and infrastructure compared to 25 years ago; Yes, the costs of running a country have increased substantially over that time (as most have all become patently aware especially over the last 12 months); However, inflation excludes things like soaring property prices, so the reality for many working Australians will actually be worse. Note that these are average figures and these will vary substantially depending on a given income level.

    • jv on 29/09/2023 - 00:04
      -2

      fully costed under Labour

      You can't even spell Labor…🤣

      Hard to take anything else you write seriously.

    • jv on 29/09/2023 - 00:06
      -2

      You are an idiot it you vote liberals because you think they are good at budgeting.

      Yet you voted for Dan thinking he was good at budgeting…. 🤣🤣🤣

    • Protractor on 29/09/2023 - 10:08

      You are an idiot it you vote liberals because you think they are good at budgeting

  • DJR9000 on 28/09/2023 - 20:57
    +1

    doesn't defacto count as spouse? So no, marriage is not the only way… just shack up and claim defacto status

    "Yes ATO auditor, it's a relationship of convenience to obtain the benefit of not having to pay MLS"

    • avoidfullprice on 28/09/2023 - 21:33

      De facto counts

      https://www.ato.gov.au/Individuals/Tax-return/2022/Tax-retur…

      Therefore not sure why the huge rant from OP about marriage

      • [Deactivated] on 28/09/2023 - 21:39

        Maybe it's against OP's religion to live in sin ??

        • avoidfullprice on 29/09/2023 - 06:01

          Or even a widow

          • [Deactivated] on 29/09/2023 - 11:42

            @avoidfullprice: Explain

            • avoidfullprice on 29/09/2023 - 11:58

              @[Deactivated]: Maybe OP wants the combined MLS threshold but as a retiree cbf moving in with a new partner. I dunno, Pauline.

              • [Deactivated] on 29/09/2023 - 11:59

                @avoidfullprice: lol

                What does any of that have to do with a widow?

    • tooblue on 29/09/2023 - 19:56

      "Yes ATO auditor, it's a relationship of convenience to obtain the benefit of not having to pay MLS"

      It is playing by the rule and they cannot fault it as long as there is the certificate. On the other hand, de facto status is a lot more difficult to prove say 5 years down the track.

  • avoidfullprice on 28/09/2023 - 21:36
    +1

    Luckily I don't find the days of have a spouse is pro rata.

    It is on the tax return form.

    You have the same luck finding information as finding a spouse it seems…

  • BuyoTheCat on 28/09/2023 - 21:50
    -1

    i think most of us have spent more on worthless stuff than medicare levy

    • eek on 29/09/2023 - 09:11

      Hey eneloops are worthy purchases!!

  • payless69 on 29/09/2023 - 04:22

    QLD has a marriage surcharge on Power, at least Ergon has.
    ya can't win!

  • JafferMoney on 29/09/2023 - 08:13

    My god…(face palm).

  • rc86 on 29/09/2023 - 09:43
    +1

    Quickly skimming over the comments here and I think most comments have missed that you are talking about the Medicare Levy Surcharge, not the Medicare Levy.

    As I understand it, the private health insurance sector were worried that no one would purchase private health insurance with a great public health system. So the Medicare Levy Surcharge (MLS) was introduced to give people an incentive to purchase private health insurance.

    You will find that the basic hospital cover is priced at a similar amount to the MLS you are paying, so may as well get the basic hospital cover to avoid paying the MLS.

    The con here is that the threshold before you start paying MLS has never been indexed the same way HELP/HECS is indexed. If the system stays as it is, soon everyone will be purchasing private health insurance.

    • avoidfullprice on 29/09/2023 - 12:01

      Quickly skimming through OPs past posts and I think most people here missed OP could he a retiree and don’t often reply to their own posts

      • tooblue on 29/09/2023 - 19:58

        Interestingly I updated/responded to most of my posts recently. But thanks for your interest, creepy stalker.

    • DJR9000 on 29/09/2023 - 12:21

      Basic hospital cover has low coverage limits, huge excesses and extensive exclusions if you actually want to use it and an actual health policy that makes sense is a lot more annually than MLS

      personally i just pay mls since i believe the money is better spent on public health than propping up private health but pay for ambulance cover as it's cheap

  • Drakesy on 29/09/2023 - 10:15
    +1

    MLS - a policy devised by private enterprise supporting lobbyists to prop up the ailing private health system, one that the liberals were only too happy to give into.

    Basically a way to transfer wealth from those that are working and trying to pay off their homes to that of the 60+ year olds who are the biggest drain on the health system.

    As if your medicare levy didn't tax you enough you now get a surcharge!

  • Annefrankly on 29/09/2023 - 13:44

    Nope, join the ADF. Can't see how it could go wrong.

    • tooblue on 29/09/2023 - 19:59

      Ben Roberts-Smith?

  • sabracad on 30/09/2023 - 19:08

    So none of salary sacrifice, super contribution, investment losses will work.

    Not true. Forget the super due to RESC disclosure requirements but if you salary sacrifice otherwise deductible items you can defeat the test.

    Eg. salary sacrifice of rates, insurance, interest etc for an investment property would reduce your taxable income and not form part of your loss on the investment property (as the expenses can't be included in your tax return). As with all salary sacrifice, the benefit is inflated if the expense being sacrificed includes GST (as you receive payment for the GST inclusive amount but only need to reduce your salary by the net amount).

    To ensure no issues with FBT your sacrifice is limited to the deductible portion if the property has partial private use.

    Assuming your employer allows it you may just want to check the structure of your salary arrangement so you don't end up decreasing your SG conts as a result.

  • ton1 on 30/09/2023 - 21:35

    Private hospitals like public are full and overflowing. My 88-year-old father has paid up his premium's for the last 40 years first time he needs a bit of help public ward bed of 6 best could find.
    Ambulance guys were great trying to find him some ware but zip beds available

  • greatlamp on 01/10/2023 - 07:16

    The Medicare Levy Surcharge is a typical policy of the liberals that seeks to prop up giant faceless corporations instead of the population they are supposed to serve.

    The surcharge should be scrapped altogether, 95% of people don't pay it and instead pay health insurance, and the money that is collected isn't reserved for healthcare, it's just a tax named Medicare Levy Surcharge.

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