Private ruling: Medicare levy surcharge
Published: November 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you liable for the Medicare levy surcharge when you were overseas for part of the year of income during which you ceased to have private health insurance? | A1: Yes


Relevant legislative provisions: Medicare Levy Act 1986 Section 8D | Medicare Levy Act 1986 Subsection 3(5)

Reasons for decision: Summary: The Medicare levy surcharge (MLS) is in addition to the Medicare levy. The MLS is payable if you or your dependants did not have an appropriate level of private patient hospital cover and the combined incomes of you and your spouse is above the surcharge threshold amount. An appropriate level of private patient hospital cover is cover provided by an insurance policy issued by a registered health insurer for hospital treatment in Australia. Subsection 3(5) of the Medicare Levy Act 1986 (MLA) states that a person is covered by an insurance policy that provides private patient hospital cover if the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007 (PHIA)) that covers hospital treatment. Travel insurance is not a complying health insurance policy. Accordingly, the travel insurance you have taken out is not private patient hospital cover for the purposes of subsection 3(5) of the MLA 1986. The Private Health Insurance Administration Council (PHIAC) administers the PHIA and maintains on its website (www.phiac.gov.au ) an up to date record of all private health insurers providing complying policies. Therefore, you are liable for a part year Medicare levy surcharge with regard to the period during the income year that you were without private patient hospital cover.

Relevant facts: You have had private health insurance for many years. | During the 2013 income year you suspended your private health insurance as you were travelling overseas. | You did not want to pay for the cover due to the fact that you would be out of the country and would not be able to use it if you needed medical insurance. | You did have full and comprehensive travel insurance for the time you were overseas, which included private health care insurance. | Your private health cover with your Australian insurer only covered xx of 365 days of the year.