Medicare levy surcharge for a family on $230,000: one tier, two bills
Enter each partner's income and the number of children: the calculator tests the family threshold on the total, then charges each partner on their own income.
The cheapest exempt cover costs less than the surcharge by
$234
Surcharge $2,300 against $2,066 of cover: ahm health insurance, ambulance hospital (basic) (Basic, $750 excess), $205.20 a month before rebate.
| Income tested: $230,000 | Tier 1, 1.00 % |
| Surcharge without cover, you | $1,400 |
| Surcharge without cover, partner | $900 |
| Cheapest exempt policy, full premium | $2,462 |
| Rebate (16.079 %) | -$396 |
| Net cost of the policy | $2,066 |
| Income from which cover is cheaper | $122,000 |
Premiums: PrivateHealth.gov.au file of 2026-10-01, 821 open policies that avoid the surcharge for this cover type in NSW and ACT. Premiums change on 1 April 2027.
Prepared by Radif Partners · How the figures are built · thresholds read on ato.gov.au, premiums from privatehealth.gov.au data · not tax advice
A couple with two dependent children and a combined income for MLS purposes of $230,000 in 2026-27 is above the family threshold, which is $210,000 plus $1,500 for the second child, $211,500 in all. That puts the household in tier 1, where the surcharge rate is 1 %. The rate is not charged on the household total. Each partner pays it on their own taxable income and reportable fringe benefits, for the days the family was not covered: with $140,000 and $90,000, that is $1,400 and $900, $2,300 together. To avoid it, the policy must cover both partners and both children. The cheapest exempt family policy in New South Wales costs $2,066 a year after the tier 1 rebate of 16.079 %, $234 less than the two surcharges, in the PrivateHealth.gov.au file of 1 October 2026.
Same total, different split
| Partner A | Partner B | Surcharge A | Surcharge B | Household |
|---|---|---|---|---|
| $115,000 | $115,000 | $1,150 | $1,150 | $2,300 |
| $140,000 | $90,000 | $1,400 | $900 | $2,300 |
| $180,000 | $50,000 | $1,800 | $500 | $2,300 |
| $200,000 | $30,000 | $2,000 | $300 | $2,300 |
| $201,989 | $28,011 | $2,020 | not liable | $2,020 |
As long as both partners are liable, the household pays the same $2,300 however the income is shared, because 1 % of each part adds up to 1 % of the whole. The split only matters at the bottom, when one partner's own income for MLS purposes falls to $28,011 or less: that partner drops out and the household bill falls by their share. The couples page covers spouses for part of the year and separations.
Family cover state by state
| State or territory | Household surcharge | Cheapest family policy, full premium | After the tier 1 rebate | Difference |
|---|---|---|---|---|
| NSW and ACT | $2,300 | $2,462 | $2,066 | cover $234 cheaper |
| Victoria | $2,300 | $2,450 | $2,056 | cover $244 cheaper |
| Queensland | $2,300 | $2,472 | $2,074 | cover $226 cheaper |
| South Australia | $2,300 | $2,371 | $1,990 | cover $310 cheaper |
| Western Australia | $2,300 | $1,893 | $1,588 | cover $712 cheaper |
| Tasmania | $2,300 | $2,410 | $2,023 | cover $277 cheaper |
| Northern Territory | $2,300 | $943 | $792 | cover $1,508 cheaper |
The margin is narrow in the eastern states and wide in the west and north: in Western Australia the cheapest family policy costs $1,588 after the rebate. Family policies cost about twice a single one, while the household surcharge here comes from two incomes, which is why cover tends to win once both partners are liable.
Your household surcharge
Medicare levy surcharge, 2026-27
$2,300
| Income tested for the tier | $230,000 |
| Thresholds (base / tier 1 / tier 2) | $211,500 / $247,500 / $329,500 |
| You | $1,400 on $140,000 |
| Partner | $900 on $90,000 |
Everyone on the policy, or the surcharge
PrivateHealth.gov.au is explicit: a family whose combined income is above the family threshold must hold hospital cover for both partners and their dependants, and if the partner or one dependant is not covered, the surcharge is payable. A family policy does that in one contract. A child who is covered as a dependant on the family policy is not liable for the surcharge, provided they have no spouse or dependants of their own. The families page explains who counts as a dependant, including students up to 24.
When one partner joins late: the averaged loading
On a couple or family policy the Lifetime Health Cover loading is the average of the adults' own loadings. If one partner first takes out hospital cover at 40, with a 20 % loading, and the other has held cover since their twenties, the family policy carries 10 %. In New South Wales that brings the cheapest family policy to $2,313 a year after the rebate, against $2,300 of household surcharge, since the rebate is not paid on the loading. Children do not add to the average, unless a dependant with a disability carries a loading of their own, as in the Ombudsman's example of Lucy. The loading page has the Ombudsman's examples.
What the children change
Each child after the first lifts the family thresholds by $1,500. At $230,000 that does not change the tier for this family: with three children the base threshold would be $213,000, still well below the combined income. It matters for families a few thousand dollars over the line. A child stops counting at 21, or at 25 for a full-time student, and from then on no longer raises the threshold. The insurance rules are separate: insurers may keep adult children on a family policy up to 31, depending on their own rules.
Close to the next tier
Tier 1 for this family ends at $247,500. Above it the rate is 1.25 % and the rebate falls to 8.038 %. The family $260,000 page shows that case.