| Disclaimer This edited version has been archived due to the length of time since original publication.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. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012674078012
Ruling
Subject: Medicare levy exemption
Question 1
Are you entitled to a full Medicare levy exemption?
Answer
No.
Question 2
Are you entitled to a half Medicare levy exemption?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2014
Year ended 30 June 2015
The scheme commences on:
1 July 2013
Relevant facts and circumstances
You have a Gold Card which covers you for all illnesses.
Your spouse is not entitled to free medical treatment and they are not subject to Medicare levy on their income.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 251S
Income Tax Assessment Act 1936 Section 251T
Income Tax Assessment Act 1936 subsection 251U(1)
Income Tax Assessment Act 1936 subsection 251U(3)
Reasons for decision
Section 251S of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a Medicare levy is payable by an individual who is a resident of Australia at any time during the income year based on their taxable income for the year.
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 includes a person entitled under veterans' entitlement (repatriation) legislation to full free medical treatment.
Taxation Ruling TR 93/35 Income tax: Medicare levy payable by persons entitled to full free medical treatment: dependants for Medicare levy purposes clarifies the circumstances in which some persons, who would normally be exempt from the Medicare levy, are required to pay half the levy. Paragraph 3 states that the broad principle is that if a prescribed person:
• does not have any dependants
• has dependants who all qualify as exempt in their own right
• has a dependant who is subject to the levy on a separate income
• has a spouse who is liable to pay the levy, and the spouse contributes to the maintenance of a dependant
then that prescribed person is completely exempt from the levy.
If a prescribed person is not completely exempt from the levy in accordance with paragraph 3, then that prescribed person will be required to pay half the levy (subsection 251U(3) of the ITAA 1936).
In your case, your Gold Card entitles you to full free medical treatment so you are a prescribed person. However, because your spouse does not qualify as exempt, in their own right, and is not liable to pay the levy in their own right, you are not completely exempt from the levy. Therefore, you are only eligible for a half exemption of the levy under section 251T of the ITAA 1936.