Program overview
Medicare gives Australian residents access to health care. It's partly funded by taxpayers through the Medicare levy, which is 2% of their taxable income. The Medicare levy is payable by taxpayers residing in Australia who are eligible for Medicare benefits.
Some taxpayers who are not entitled to Medicare benefits can claim an exemption from the Medicare levy in their tax return. Taxpayers who are not entitled to Medicare benefits for all, or part, of a financial year must apply for a Medicare Entitlement Statement (MES) from Services Australia to access the exemption. A separate MES is required for each financial year that a taxpayer is not entitled to Medicare benefits.
An exemption from the Medicare levy may also extend to the Medicare levy surcharge.
We collect MES data from Services Australia and use it alongside information reported in tax returns to support taxpayers to correctly claim Medicare levy and Medicare levy surcharge exemptions. Taxpayers claiming exemption from payment of the Medicare levy and Medicare levy surcharge are then excluded from compliance action. Excluding these taxpayers from compliance action ensures they aren’t contacted by us unnecessarily.
Program objectives
Our data-matching programs help us fulfil our responsibility to protect public revenue and maintain community confidence in the integrity of the tax and superannuation systems.
The objectives of our Medicare Entitlement Statement data-matching program are to:
- support taxpayers to correctly understand and claim Medicare levy and Medicare levy surcharge exemptions
- enable tailored assistance and early correction where differences arise due to changed circumstances, misunderstanding or error
- reduce unnecessary contact with taxpayers who are correctly meeting their obligations
- identify and address risks of incorrect claiming through appropriate verification activities
- inform education strategies to make compliance easier in the future
- protect public revenue and maintain community confidence in the integrity of the tax system.
Why we look at Medicare entitlement statement data
Our Medicare entitlement statement data-matching program will allow us to identify and address a number of tax risks, including:
- incorrect claims for the Medicare levy exemption and Medicare levy surcharge as reported in tax returns
- education and assistance to support taxpayers to correctly report their information.
Claims for exemption from payment of the Medicare levy and Medicare levy surcharge may be disallowed where:
- a taxpayer declares they are not entitled to receive Medicare benefits but does not hold a valid MES issued from Services Australia
- the number of days taxpayer claims they're are not entitled to receive Medicare benefits differs from the period recorded in the MES.
The data is also used to exclude taxpayers who are correctly claiming an exemption from payment of the Medicare levy and Medicare levy surcharge. Excluding these taxpayers from compliance action ensures they aren’t contacted by us unnecessarily.
For more information see not entitled to Medicare benefits