Private ruling: Medicare levy surcharge
Date of advice: 28 May 2026
Published: 10 August 2026
Ruling period: Year ending 30 June 20xx
Date scheme commenced: DD MM YYYY

Ruling: Q1: Are you liable for the Medicare Levy Surcharge for the 20xx income year? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 sub-paragraph 251R(3)(b)(i) | Income Tax Assessment Act 1936 section 251U | Medicare Levy Act 1986 ection 3A | Medicare Levy Act 1986 subsection 8D(1) | Medicare Levy Act 1986 subsection 8D(2) | Medicare Levy Act 1986 subsection 8D(3) | Medicare Levy Act 1986 subsection 8D(4) | Medicare Levy Act 1986 subsection 8D(5) | Private Health Insurance Act 2007 Subdivision 22-B

Reasons for decision: Detailed Reasoning - Medicare Levy Surcharge: Medicare Levy Surcharge for taxpayers with one or more dependants Under sections 8C (applies to taxpayers without a spouse) and 8D (applies to taxpayers with a spouse) of the Medicare Levy Act 1986 (MLA 1986), a taxpayer is liable for the Medicare Levy Surcharge where they satisfy all of the following tests for the whole or part of the year: • The person has one or more dependants; • The person, or at least one of the person's dependants (and that dependant was not a prescribed person), is not covered by an insurance policy that provides private patient hospital cover; • The person is not, or is taken not to be, a prescribed person; • The combined taxable incomes and reportable fringe benefits of the person and the person's spouse exceeds the family surcharge threshold. The family surcharge threshold for the year ended 30 June 2024 is $ 151,001 or more (plus $1,500 for each dependant child after the first). This family threshold applies for both singles and couples if a taxpayer has dependants. The meaning of 'prescribed person' for the purposes of the Medicare Levy is contained within section 251U of the Income Tax Assessment Act 1936 (ITAA 1936), and applies to the following persons: • A person entitled to full free medical treatment because they were a member of the Defence Force, or was a relative of, or was otherwise associated with a member of the Defence Force; or • A person entitled to full free medical treatment under the Veterans' Entitlements Act 1986 or the Military Rehabilitation and Compensation Act 2004 ; or • A person not a resident of Australia for tax purposes, or who is a resident of Norfolk Island; or • A recipient under of a sickness allowance under Part 2.14 of the Social Security Act 1991 ; or • A blind pensioner; or • A person who is the head of a diplomatic mission or consular post established in Australia, or a family member or member of staff of the diplomatic head or consular head, • The Health Minister has certified that the person is not entitled to Medicare benefits. The meaning of 'dependent' for Medicare Levy purposes is contained in subsection 251R(3) of the ITAA 1936. A person is considered to be a dependent of a taxpayer if: • The dependent is a resident of Australia at any time during the year of income; • The taxpayer contributes to the maintenance of that person. A dependent includes a 'child' of the taxpayer aged under 21 years old. A 'child', as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) includes: • An adopted child, stepchild or ex-nuptial child of the taxpayer • A child of the taxpayer's spouse, and • Someone who is a child of the taxpayer within the meaning of the Family Law Act 1975 (for example, a surrogate child) As contained within subsection 251R(6) of the ITAA 1936, a person is deemed to have contributed to the maintenance of another person for any period they reside together, unless the contrary is established to the satisfaction of the Commissioner. | Detailed Reasoning - Additional information: The Medicare levy and MLS are not forms of income tax. They are imposed under the Medicare Levy Act 1986 . The funds collected are used to fund the operation of the Medicare system. As the calculation of the amount of Medicare levy and MLS payable is linked to a taxpayer's taxable income, their collection is administered by the Commissioner of Taxation on behalf of the Commonwealth Government. The provisions of the income tax legislation that relate to the Medicare levy and MLS do not impose the levies. Instead they set out how the levies collection is to be administered.

You had your first child in xx 20xx. | You do not have a spouse. | You became aware that you were to receive a large amount of back pay for a period of 20xx to 20xx from previous employment due to an incorrect payment. | You made an appointment with your tax accountant in xx 20xx to undertake some financial planning. | Your tax accountant did not advise you about maintaining an appropriate level of private patient health care coverage for your child. | You recently had another child on xx xx 20xx. | The amount of income you received as a lump sum was over the income threshold for the income tax year.