Private ruling: Medicare levy exemption
Date of advice: 15 January 2016
Published: March 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to an exemption from paying Medicare levy for the period 1 July 2014 to 30 June 2015? | A1: No.

Relevant facts and circumstances: You are not an Australian citizen. You have been living and working in Australia for several years. You are married to an Australian citizen who is entitled to Medicare benefits and pays the Medicare levy. You have a Medicare levy exemption certificate (Medicare entitlement statement) for the period 1 July 2013 to 30 June 2014. You will be applying for a Medicare entitlement statement for the period 1 July 2014 to 30 June 2015.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 251R(3) | Income Tax Assessment Act 1936 subsection 251T(a) | Income Tax Assessment Act 1936 subsection 251U(1) | Income Tax Assessment Act 1936 subsection 251U(2)

Reasons for decision: Summary: An individual who is a resident of Australia at any time during the income year is liable to pay a Medicare levy based on their taxable income for the year. The legislation governing the levy is contained section 251R to 251Y of the Income Tax Assessment Act 1936 (ITAA 1936) and in the Medicare Levy Act 1986 . Subsection 251T(a) of the ITAA 1936 states that the Medicare levy is not payable by a 'prescribed person'. Subsection 251U(1) paragraph f of the ITAA 1936 says that a 'prescribed person' is someone that the Health Minister has certified as not being entitled to Medicare benefits (ie. has been issued a Medicare levy exemption certificate). However, subsection 251U(2) of the ITAA 1936 goes on to clarify that someone is not a 'prescribed person' unless everyone who is their dependent is also a 'prescribed person'. Subsection 251R(3) of the ITAA 1936 outlines that a dependent includes a spouse for any period that they lived together. In your case, you have had a spouse who is an Australian citizen for the whole 2014-15 income year, and your spouse was required to pay the Medicare levy, so is not a 'prescribed person'. As your spouse is not a 'prescribed person', then you are also not a 'prescribed person' for that period. This means that you are not eligible to claim a Medicare levy exemption. While you may be issued a Medicare levy exemption certificate for a period, Medicare does not assess a taxpayer's spouse and in some instances these certificates may not be accurate when taking into account a taxpayer's particular circumstances. Accordingly, we have determined that you are not eligible for a Medicare levy exemption for the period 1 July 2014 to 30 June 2015.