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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051318462142

Date of advice: 21 December 2017

Ruling

Subject: Medicare levy surcharge

Question

Are you exempt from paying the Medicare levy surcharge?

Answer

No.

This ruling applies for the following periods

Year ending 30 June 2017

The scheme commenced on

1 July 2016

Relevant facts and circumstances

You are single with no dependents.

Your taxable income is $X. Your calculation of tax payable includes an amount for Medicare levy surcharge (MLS) of $X.

You have continued to hold ancillary cover via a health fund.

You do not have private patient hospital cover. You are unable to obtain hospital cover from any private health insurance provider due to a terminal illness.

You are not a prescribed person for MLS proposes but request that the Commissioner exempt you from payment of the MLS as you are unable to obtain private patient hospital cover due to your terminal illness.

Relevant legislative provisions

Medicare Levy Act 1986 Section 8D

Medicare Levy Act 1986 Subsection 3(5)

Income Tax Assessment Act 1936 Section 251U

Reasons for decision

Under section 8D of the Medicare Levy Act 1986 (MLA 1986), a single taxpayer is liable to pay a surcharge of one per cent on his and her taxable income if:

Liability to the Medicare levy surcharge is based on whether you are single, a single person with dependants, or have a spouse or spouse with dependants. A single person with no dependents is liable to surcharge of 1% if their taxable income and reportable fringe benefits is between $90,001 and $105,000.

You are a single person with no dependants with a taxable income of $X. The rate of MLS applicable to your situation is 1% of taxable income. This is confirmed by your own calculation.

Section 251U of the Income Tax Assessment Act 1936 states that a prescribed person is:

You are not a prescribe person under any of these categories.

Subsection 3(5) of the MLA 1986 states that a person is covered by an insurance policy that provides private patient hospital cover if the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment.

You do not have appropriate private patient hospital cover as required under section 8D of the MLA 1986.

The legislation has no provision to allow the Commissioner to waive the Medicare levy surcharge or to provide exemption from it in your case. Accordingly, you will be liable for Medicare levy surcharge as your taxable income exceeds the surcharge threshold.


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