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ATO Interpretative Decision

ATO ID 2001/239 (Withdrawn)

Income Tax
Medicare Levy Surcharge - prescribed person

Attention This ATO ID is withdrawn. Guidance relating to the issue addressed in this ATO ID can be found in ato.gov.au content M1 Medicare levy reduction or exemption 2017 (QC 51123) and M2 Medicare levy surcharge (MLS) 2017 (QC 51126).
Attention This document has changed over time. View its history.
FOI status: may be released
Status of this decision: Decision withdrawn 18 August 2017.

CautionCAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a person who receives a disability support pension and is not blind liable for the medicare levy surcharge under section 8B of the Medicare Levy Act 1986 (MLA 1986)?

Decision

Yes, a person who receives a disability support pension and is not blind is liable for the medicare levy surcharge under section 8B of the MLA 1986.

Facts

The taxpayer is in receipt of a disability support pension.

The taxpayer is single with no dependents.

The taxpayer does not have private patient hospital insurance cover.

The taxpayer receives a one-off superannuation payment which increases their income for surcharge purposes to an amount which exceeds the relevant singles threshold.

The taxpayer is not blind.

Reasons for Decision

Section 8B of the MLA 1986 imposes an increased amount of medicare levy (the surcharge) on those taxpayers who:

-
  are not married
-
  have no dependants
-
  do not have private hospital insurance
-
  whose income for surcharge purposes to an amount which exceeds the relevant singles threshold, and
-
  are not a prescribed person.

The taxpayer meets each of the first four requirements and will be liable for the surcharge unless they are a prescribed person.

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).

Subparagraph 251U(1)(ca)(ii) and paragraph 251U(1)(caa) of the ITAA 1936 provides that:

-
  where a person was in receipt of a disability support pension paid under Part 2.3 of the Social Security Act 1991 (SSA 1991), and
-
  the rate of pension was calculated under either section 1065 or section 1066B of the SSA 1991

the person shall be a prescribed person.

Section 1065 of the SSA 1991 calculates the rate of the Disability Support Pension for permanently blind persons.

Section 1066B of the SSA 1991 calculates the rate of the Disability Support Pension for permanently blind people who are under the age of 21.

The effect of these provisions is that to qualify as a prescribed person for the purposes of the surcharge, the recipient of the Disability Support Pension must be permanently blind.

As the taxpayer is not permanently blind they are not a prescribed person, and therefore are liable under section 8B of the MLA 1986 for the medicare levy surcharge.

Amendment History

Date of amendment Part Comment
1 November 2013 Facts Updated tax technical terminology and reworded for clarity
  Reasons for Decision Updated tax technical terminology, reworded for clarity, and made minor format changes

Date of decision: 18 July 2001

Legislative references:
Income Tax Assessment Act 1936
   section 251U
   subparagraph 251U(1)(ca)(ii)
   paragraph 251U(1)(caa)

Medicare Levy Act 1986
   section 8B

Social Security Act 1991
   Part 2.3
   section 1065
   section 1066B

Keywords
Medicare levy surcharge
Medicare levy
Social security pensions & allowances
Social security payments

Siebel/TDMS reference number: DW231540

Business line: Small Business/Individual Taxpayers

Date of publication: 21 August 2001

ISSN: 1445-2782

ATO ID 2001/239 (Withdrawn) history   Top  
   Date   Version 
   18 July 2001   Original statement   
    1 November 2013   Updated statement   
 You are here ®  18 August 2017   Withdrawn   


 


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