A T O home
Legal Database
Search   
for 
 
Access the database 
Browse database
Searches  
View last document
Quick access 
View legislation
View a document
Email Cross Reference Material Previous/Next Section Contents Previous/Next Result
Printable version
Printable
version

ATO Interpretative Decision

ATO ID 2011/21 (Withdrawn)

Income Tax
Medicare levy surcharge - overseas visitors health insurance policy

Attention This ATO ID is withdrawn. Guidance relating to the issue addressed in this ATO ID can be found in Private health insurance rebate eligibility (QC 49964).
Attention This document has changed over time. View its history.
FOI status: may be released
Status of this decision: Decision withdrawn 22 September 2017.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the taxpayer liable for the Medicare levy surcharge under section 8B of the Medicare Levy Act 1986 (MLA) where they have private health insurance under an overseas visitors policy with an Australian health insurance company?

Decision

Yes. The taxpayer is liable for the Medicare levy surcharge under section 8B of the MLA where they have private health insurance under an overseas visitors policy with an Australian health insurance company as the taxpayer is not covered by a policy that provides private patient hospital cover in accordance with subsection 3(5) of the MLA.

Facts

The taxpayer is a resident of Australia for tax purposes.

The taxpayer is single and has no dependants.

The taxpayer's income for surcharge purposes, as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997), exceeds the single surcharge threshold for the year of income.

The taxpayer has private health insurance in the form of an overseas visitors policy with an Australian health insurance company. The policy is not a complying health insurance policy within the meaning of section 63-10 of the Private Health Insurance Act 2007 (PHIA).

The taxpayer is not a 'prescribed person' as defined in section 251U of the Income Tax Assessment Act 1936 (ITAA 1936).

Reasons for Decision

Paragraph 251S(1)(a) of the ITAA 1936 provides that a Medicare levy is levied at the rate applicable in the MLA from the 1984 year of income onwards on the taxable income of a person who at any time during the year of income was a resident.

Section 8B of the MLA provides that the amount of Medicare levy payable by a taxpayer is increased where:

·
 the taxpayer's income for surcharge purposes exceeds the single surcharge threshold for the year of income; and

the taxpayer:

·
 is not a married person (or treated as if married under subsection 251R(2) of the ITAA 1936)
·
 does not have dependents;
·
 does not have private patient hospital cover; and
·
 is not a prescribed person as defined in section 251U of the ITAA 1936.

This increase in the amount of Medicare levy payable is commonly known as the Medicare levy surcharge.

Subsection 3(5) of the MLA provides 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 PHIA) that covers hospital treatment (within the meaning of the PHIA) and, for a policy under which only one person is insured, any excess payable is not more than $500 in any 12 month period.

The taxpayer has private health insurance in the form of an overseas visitors policy with an Australian health insurance company but, as the policy is not a complying health insurance policy under the PHIA, the taxpayer is not covered by a policy that provides private patient cover within the meaning of subsection 3(5) of the MLA.

As the taxpayer is single with no dependents, is not a prescribed person and does not have the required private patient hospital cover, and as the taxpayer's income for surcharge purposes exceeds the single surcharge threshold for the year of income, the taxpayer is liable to pay the surcharge under section 8B of the MLA.

Date of decision: 16 February 2011

Year of income:1 July 2010 to 30 June 2011

Legislative references:
Medicare Levy Act 1986
   section 8B
   subsection 3(5)

Income Tax Assessment Act 1936
   subsection 251R(2)
   paragraph 251S(1)(a)
   section 251U

Income Tax Assessment Act 1997
   section 995-1

Private Health Insurance Act 2007
   section 63-10

Keywords
Medicare levy surcharge

Siebel/TDMS reference number: 1-2OHB10A

Business line: Small Business/Individual Taxpayers

Date of publication: 4 March 2011

ISSN: 1445-2782

ATO ID 2011/21 (Withdrawn) history   Top  
   Date   Version 
   16 February 2011   Original statement   
 You are here ®  22 September 2017   Withdrawn   


 


Top of page
More information on page