Which statement describes the Medicare Levy Surcharge?

• A. An addition 1-1.5% for high income earners who do not have private health insurance
• B. A flat 2% tax on all taxpayers
• C. It funds the PBS
• D. It reduces co-payments

Answer: (A)

The Medicare Levy Surcharge is an extra levy for high‑income earners who don’t have private hospital cover. It adds about 1% to 1.5% of your taxable income, depending on your income and family situation, and applies on top of the standard Medicare Levy (which most taxpayers pay). It’s designed to encourage people with higher incomes to take out private hospital insurance and to reduce demand on the public system. It doesn’t apply to everyone, and having private cover can avoid it if you meet the thresholds. It doesn’t fund the PBS, and it doesn’t directly reduce co-payments.

So the statement that describes the Medicare Levy Surcharge as an addition of 1–1.5% for high‑income earners without private health insurance is the best fit.