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

Ruling: Q1: Are you and your spouse prescribed persons and consequently exempt from the Medicare levy and Medicare levy surcharge for the duration of your posting to an Australian Embassy? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a member of the Australian defence force. You will be posted overseas with your spouse to an Australian Embassy during the 2013-14 financial year. You will both receive free medical treatment for the duration of your posting. Your spouse will not earn a wage during the posting. You have no other dependants.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 251S. | Income Tax Assessment Act 1936 Section 251U. | Income Tax Assessment Act 1936 Section 251V.

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 251S of the Income Tax Assessment Act 1936 (ITAA 1936) provides that the Medicare levy is payable by any person who was, at any time during the year, a resident of Australia. Some prescribed taxpayers may be exempt from the Medicare levy. | Detailed Reasoning - Prescribed person: A 'prescribed person' is defined in paragraph 251U(1)(a) of the ITAA 1936 to include a person who was a member of the Defence Force and was entitled to free medical treatment, or a relative of a member of the Defence Force who was entitled to free medical treatment. However, a person will not be a 'prescribed person' if any of their dependants are not prescribed persons (subsection 251U(2) of the ITAA 1936). You and your spouse are prescribed persons in receipt of free medical treatment as outlined above, and as such are exempt from the Medicare levy whilst serving overseas. | Detailed Reasoning - Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional amount to the Medicare Levy, which taxpayers may be liable to pay where they have no private hospital cover. Where taxpayers are exempt from the previously discussed Medicare Levy as prescribed persons, they will generally also be exempt from the Medicare levy surcharge for the same period. Dependents for purposes of the Medicare levy surcharge are a spouse, child in receipt of full-time education who is 21 or more but less than 25 will be a dependant regardless of the level of the dependant's adjusted taxable income under section 251V of the ITAA1936. As you and your spouse qualify as prescribed persons you are exempt from the Medicare levy surcharge, whilst serving overseas.