ATO Interpretative Decision
ATO ID 2002/109 (Withdrawn)
Income Tax
Medicare levy surcharge - taxpayer covered by private patient hospital cover part year and non resident for remainderFOI status: may be released
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This ATO ID is a straight application of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the taxpayer liable to pay the Medicare levy surcharge under section 8B of the Medicare Levy Act 1986 (MLA 1986) where for part of the income year they were covered by private patient hospital cover and for the remainder they were not a resident of Australia?
Decision
No. The taxpayer is not liable to pay the Medicare levy surcharge under section 8B of the MLA 1986, as during their period of residency they were covered by private patient hospital cover and were a prescribed person for the period they were a non resident.
Facts
The taxpayer is not married and does not have any dependants.
The taxpayer was a resident of Australia for tax purposes for part of the current income year.
While a resident of Australia the taxpayer had private patient hospital cover.
The taxpayer then moved permanently overseas and ceased to be a resident of Australia.
Reasons for Decision
Section 8B of the MLA 1986 provides that a taxpayer will be subject to a Medicare levy surcharge where, for the whole or part of a year of income, they:
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- are not married;
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- do not have dependants;
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- do not have private patient hospital cover; and
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- are not a prescribed person.
Where a person satisfies all the above requirements for the whole of the year of income and the person's taxable income exceeds $50 000, a surcharge at 1 per cent of the person's taxable income is payable in addition to the amount of Medicare levy otherwise payable. Where these requirements are not met for the whole or part of the income year, the taxpayer is not liable to the Medicare levy surcharge for that period in the year.
Whether a person is a 'prescribed person' for the purposes of the Medicare levy surcharge is determined by section 251U of the Income Tax Assessment Act 1936 (ITAA 1936). Paragraph 251U(1)(d) of the ITAA 1936 provides that a person will be a 'prescribed person' during the period that the person was a non resident.
The taxpayer had private patient hospital insurance throughout the period they were a resident of Australia and were a 'prescribed person' for the period that they were a non resident. Accordingly, the taxpayer does not meet the requirements under section 8B of the MLA 1986 and will not be liable for the Medicare levy surcharge during the income year.
Date of decision: 30 November 2001
Legislative References:
Medicare Levy Act 1986
section 8B
section 251U
paragraph 251U(1)(d)
Keywords
Medicare levy
Medicare levy surcharge
Non resident individuals
ISSN: 1445-2782
| Date: | Version: | |
| 30 November 2001 | Original statement | |
| You are here | 26 August 2005 | Archived |
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