Private ruling: Medicare levy
Published: February 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a Medicare levy exemption while living overseas? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 251S. | Income Tax Assessment Act 1936 Section 251U. | Medicare Levy Act 1986 Sections 8B to 8G.

Reasons for decision: Detailed Reasoning - Medicare levy: Section 251S of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a Medicare levy is levied and shall be paid by an individual who is a resident of Australia at any time during the income year based on his or her taxable income for the year. The Medicare levy is levied at the rate applicable in the Medicare Levy Act 1986 . Full or partial exemption from the Medicare levy may be provided to a person that qualifies as a "prescribed person". Under section 251U of the ITAA 1936, a "prescribed person" is: • a person entitled to full free medical treatment as a member of the Defence Force or as a relative of, or as a person otherwise associated with a Defence Force member • a person entitled under Veteran's entitlement (repatriation) legislation to full free medical treatment • a blind pensioner or a sickness allowance recipient • a person who is not a resident of Australia for tax purposes, or a person who is a resident of Norfolk Island • a person who is attached to a diplomatic mission or consular post established in Australia or a household member of the persons family, provided the person is not an Australian citizen and is not ordinarily resident in Australia, or • a person certified by the Health Minister as not being entitled to Medicare benefits. In your case, you are not a prescribed person. Although you are not currently living in Australia, you are still an Australian resident for tax purposes. As an Australian resident, should you return to Australia, you will be entitled to receive Medicare benefits in respect of professional services rendered in Australia. In certain circumstances, the Minister for Health certifies that a person is ineligible for Medicare benefits in respect of medical services, or free treatment and care in a public hospital and is exempt from the Medicare levy. An Australian citizen residing overseas for five years or more may be eligible for such a Medicare levy exemption. However in your circumstances you do not have a certificate from the Health Minister. In your case you are not a member of any of the Medicare levy exemption categories for the purposes of being granted exemption from the Medicare levy. We acknowledge your specific circumstances, however, as you are not a prescribed person, there is no provision in the legislation that allows the Commissioner to exempt you from paying the Medicare levy.

Relevant facts: You are employed and living overseas for the full 2013-14 financial year. | You may be working and living overseas for two to three years. | You have not returned to Australia in the 2013-14 financial year. | You are an Australian citizen and remain a resident of Australia for taxation purposes. | You have no dependents in Australia.