Private ruling: Medicare levy exemption
Date of advice: 26 November 2015
Published: February 2016
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2008

Ruling: Question and answer | Are you entitled to a half Medicare levy exemption? | Yes

Relevant facts and circumstances: You and your spouse are both exempt from paying the Medicare levy. You have paid the half levy for your children. Your children have been receiving full time education at school with any received income within the tax free threshold. Your spouse claimed a full exemption from paying the Medicare levy in the years ended 30 June 2009 to 30 June 2015 inclusive.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 251S | Income Tax Assessment Act 1936 Section 251T | Income Tax Assessment Act 1936 Section 251U(1) | Income Tax Assessment Act 1936 Section 251U(3)

Reasons for decision: Summary: Section 251S of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a Medicare levy is payable by an individual who is a resident of Australia at any time during the income year based on their taxable income for the year. Section 251T of the ITAA 1936 provides for exemption from the levy to persons who qualify as prescribed persons. Prescribed persons are listed in subsection 251U(1) of the ITAA 1936 and includes a person entitled, as a member of the Defence Force, to full free medical treatment. Taxation Ruling TR 93/35 states at paragraph 3, that if a prescribed person: • does not have any dependants • has dependants who all qualify as exempt in their own right • has a dependant who is subject to the levy on a separate income • has a spouse who is liable to pay the levy, and the spouse contributes to the maintenance of a dependant then that prescribed person is completely exempt from the levy. Paragraph 4 of TR 93/35 states, if a prescribed person is not completely exempt from the levy in accordance with paragraph 3 of this Ruling, then that prescribed person will be required to pay half the levy: subsection 251U(3). This means if a prescribed person has dependants who are not exempt from the Medicare levy and another person is not paying the Medicare levy on behalf of those dependants, the prescribed person is required to pay the half rate of the Medicare levy. In your situation, you have dependants who are not exempt from the Medicare levy and your spouse has claimed a full exemption therefore you are required to pay the half rate of the Medicare levy for your dependants. Our records indicate you have claimed the half levy Medicare exemption for your dependants.