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This edited version has been archived due to the length of time since original publication.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 private ruling

Authorisation Number: 1011633630395

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Ruling

Subject: Medicare levy

As an Australian resident living and working overseas, are you exempt from the Medicare levy?

No.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You have lived and worked overseas for approximately two years with your spouse and you have lodged Australian income tax returns as an Australian resident for tax purposes for the years ended 30 June 2009 and 30 June 2010. You have no other dependants.

You have not accessed the Medicare system in the 2009-10 income year.

You will return to Australia in the 2010-11 income year.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 251S

Income Tax Assessment Act 1936 Section 251T

Income Tax Assessment Act 1936 Section 251U

Reasons for decision

Section 251S of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a Medicare levy shall be paid by an individual who is a resident of Australia at any time during the income year and is calculated at 1.5% of the taxpayer's taxable income for the year. 

However, section 251T of the ITAA 1936 provides for exemption from the levy to persons who qualify as 'prescribed persons'. Prescribed persons are listed in subsection 251U (1) of the ITAA 1936 and include: 

    · persons who are not Australian residents

    · residents of Norfolk Island

    · members of the Defence forces and Veteran Affairs who are entitled to full free medical treatment

    · blind pensioners or recipients of a sickness allowance from Centrelink

    · diplomats and consular officials who are not citizens and not normally residents of Australia

    · persons who hold a certificate from Medicare Australia showing they are not entitled to Medicare benefits.

These exemption categories do not apply in your situation. Although you lived and worked overseas for two years and did not access the Medicare system you remained a resident of Australia for tax purposes and you were not a prescribed person. Therefore, you will be required to pay the Medicare levy for the year ended 30 June 2010.


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