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  • Medical exemption from Medicare levy

    When you can claim a full or half exemption from the Medicare levy.

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    Conditions for medical exemption from Medicare levy

    You may be able to claim a full or half Medicare levy exemption if you satisfy both of the following conditions:

    • one of the following Category 1 medical conditions applied during all or part of the income year
      • you were a blind pensioner
      • you received sickness allowance from Centrelink (allowance ceased 20 September 2020)
      • you were entitled to full free medical treatment for all conditions under either
        • Defence Force arrangements
        • Veterans’ Affairs Repatriation Health Card (Gold Card)
         
       
    • during the period you met a condition above, you also met one of the conditions listed in the table below.

    You claim this exemption when you lodge your income tax return. This is also known as an exemption under Category 1.

    Conditions and their applied Medicare levy exemption

    Condition

    Exemption that applies

    You had no dependants.

    Full

    Each of your dependants (including your spouse) either:

    • was in one of the exemption categories, or
    • had to pay the Medicare levy.

     

    Full

    You had dependent children who were not in an exemption category but who were also dependants of your spouse, and your spouse either:

    • had to pay the Medicare levy, or
    • met at least one of the medical conditions and you have completed a family agreement stating that your spouse will pay half of the levy for your joint dependants.

     

    Full

    You had at least one dependant (for example, a spouse) who:

    • was not in an exemption category, and
    • didn't have to pay the Medicare levy.

     

    Half

    You were single or separated and you:

    • had a dependent child who was not in a Medicare levy exemption category, and
    • were entitled to Family Tax Benefit Part AExternal Link or the rental assistance component of Family Tax Benefit Part A for that child, and
    • were in a shared care arrangement.

     
    • for the days that you had care of your dependent child – Half
    • for the days that you did not have care of your dependent child – Full
     

    You had a spouse who met at least one of the medical conditions and you had a dependent child who:

    • was not in an exemption category, and
    • was dependent on both of you.

     

    Either you or your spouse can claim a full exemption and the other can claim a half exemption by completing a family agreement.

    Family agreement for Medicare levy exemption

    A family agreement is a written agreement signed by you and your spouse. You complete a family agreement only if both you and your spouse would have to pay the Medicare levy were it not for your exemption category status.

    You don't need to send this agreement to us unless requested. If you fail to keep the agreement, both of you may become liable for the Medicare levy.

    The agreement must contain:

    • the statement – 'We agree that the Medicare levy exemption in respect of our dependants for the 2021–22 year will be claimed as follows'
      • name of person claiming the full exemption
      • name of person claiming the half exemption
      • your signature
      • your spouse's signature.
       

    The agreement must be signed on or before the date the person claiming the full exemption lodges their tax return, unless the Commissioner of Taxation allows further time.

    For information on other Medicare levy exemptions, see Medicare levy exemption.

    Last modified: 21 Jul 2022QC 27036