Private ruling: Medicare levy surcharge
Published: May 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to the Family Surcharge threshold? | A1: Yes.

Relevant facts and circumstances: You are not married. You have 1 child. Your child does not reside with you. You do not have private health insurance. You pay child support for your child.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 251U | Income Tax Assessment Act 1936 section 251R | Medicare Levy Act 1986 section 8C | Medicare Levy Act 1986 section 3

Reasons for decision: Summary: An unmarried person that has one or more dependants is liable to pay an increase in the Medicare levy of 1 per cent on their taxable income and reportable fringe benefits under section 8C of the Medicare Levy Act 1986 (MLA) if they are not a 'prescribed person' as defined in section 251U of the ITAA 1936, they do not have an insurance policy providing 'private patient hospital cover' and their taxable income exceeds the amount calculated in accordance with the formula for the 'family surcharge threshold' contained in section 3A of the MLA 1986. Subsection 251R(3) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a taxpayer will be taken to have a dependant if, during any part of the year of income: · the person was a resident of Australia; · the person was either a: · spouse of the taxpayer; · a child of the taxpayer less than 16 years of age; or · a child of the taxpayer not less than 16 years of age but less than 25 years of age and receiving full-time education at a school, college or university; and · the taxpayer contributed to the maintenance of the person In your case you are not married, are not covered by private patient hospital cover and are not a prescribed person. You contributed to the maintenance of your child by making child support payments and consequently has 'dependants' as defined in subsection 251R(3) of the ITAA 1936. You are therefore entitled to use the 'family surcharge threshold' in calculating any increase in the Medicare levy payable under section 8C of the MLA 1986.

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