Edited version of private advice

Authorisation Number: 1052293935492

Date of advice: 21 August 2024

Ruling

Subject: Medicare levy surcharge

Question 1

Was your child your dependant during the relevant financial years for the purpose of the medicare levy surcharge?

Answer

Based on the information provided to the commissioner your child was your dependant for the relevant financial year.

Your child was less than 21 years of age in the income year and will be less than 21 years of age in the following financial year and meets the definition of dependant for the medicare levy surcharge purposes.

Question 2

Are you liable for the medicare levy surcharge in respect of your child while they were not covered by private patient hospital cover during the relevant financial year?

Answer

Yes.

Based on the information provided to the Commissioner you are liable for the medicare levy surcharge for the relevant period when your child who was your dependant was not covered by Private patient cover if you exceed the any of the Family threshold tiers.

Question 3

Are you entitled to use the family tier thresholds for the purpose of the private health insurance tax offset for the relevant financial year?

Answer

Based on the information provided to the Commissioner you can use the family tier thresholds for private health insurance tax offset purposes as you contributed in a substantial way to your child's maintenance during the financial year.

For the relevant financial year your child was living with you for the majority of the financial year, and you financially supported them.

For the following financial year, you will continue to financially support your child and will pay your child's other parent child support.

You will be able to use the family tier thresholds for the financial year.

Question 4

Is only your income included for the purpose of the Private Health Insurance tax offset income test for the relevant financial years?

Answer

Yes.

Based on the information provided to the commissioner it is only your income that is required to be included for the purpose of the Private Health Insurance Tax Offset income test.

If you do not have a spouse or partner, the only income you report is your own, as you and your spouse divorced a number of years ago and no longer reside together then you only need to report your own income and are no longer dependant on each other, you are considered to be a single person and you only need to report your own income in your income tax return.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You have been divorced from your former spouse for several years.

You have a child with your ex-spouse.

You had private patient hospital cover for the relevant financial year.

You will have private patient hospital cover in the following income year.

Your child was included under your private patient hospital cover for the majority of the relevant year.

Your child no longer has private patient hospital cover.

Neither you nor your child are prescribed persons under section 251U of the Income Tax Assessment Act 1936 (ITAA 1936).

You had 100% care of your child for a specific period.

You had a percentage of care of your child in the period immediately after the period in which you had 100% care.

You are liable to pay child support for your child from the date you had shared care of your child.

Relevant legislative provisions

Medicare Levy Act 1986 section 8

Income Tax Assessment Act 1936 sections 251S

Income Tax Assessment Act 1936 sections 251U