| Medicare Levy Surcharge |
| The Administrative Appeals Tribunal (AAT) has held that a taxpayer was not entitled to an exemption in respect of the Medicare levy surcharge. |
The Law
The Medicare levy surcharge applies to taxpayers whose taxable income exceeds $50,000 (or $100,000 combined for couples) and who do not have adequate private health insurance. The surcharge is equal to 1% of the taxpayer?s income and must be paid in addition to the Medicare levy of 1.5%. Where the taxpayer has more than one dependant, the threshold is increased by $1,500 for each dependant after the first.
The Case
In this particular case, the AAT rejected the taxpayer?s argument that he was exempt from the surcharge.
The AAT determined that the taxpayer?s former wife did not qualify as a ?dependant? for the purpose of exemption. The basis for this decision was that she did not fall within the definition of ?spouse?, which requires that two people live together on a bona fide domestic basis as husband and wife, whether or not they are legally married.
The taxpayer did not reside with his former wife, nor did he have any other dependants. As his taxable income for the year exceeded the threshold of $50,000, the AAT held that he was ineligible for an exemption (i.e. the $100,000 combined figure).
Thought for Consideration
Consider further the merits of having private health insurance. If you are in the category of taxpayers who have to pay the surcharge, then why not pay health insurance (similar cost) but then be eligible for refunds of medical expenses?
24th-November-2003 |
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