Questions
surround Medicare surcharge
I
seek your assistance to provide advice on the Medicare Levy Surcharge
in relation to Defence personnel.
While it is clear that permanent service members are exempted
persons from the Medicare Levy because they receive medical coverage
from the ADF, their incomes that are exempted or half exempted
from the Medicare Levy are not exempted when considered for the
Medicare Levy Surcharge.
If the combined family income exceeds $100,000, the Defence family
has to pay one per cent of its total combined income as a Medicare
Levy Surcharge if it has no private health insurance cover.
In some cases, if both members are serving members, the private
health insurance may only be needed for one child. If the combined
family income is less than $100,000, the family is exempted from
the surcharge.
Surely, if a Defence member’s income is exempted or half-exempted
from the Medicare Levy, then this income amount should be deducted
from the total family income in relation to the Medicare Levy
Surcharge test.
Otherwise, no consideration is given to the fact that the Defence
member receives medical and dental cover as a condition of service
and does not require private health insurance.
When the Medicare Levy Surcharge was introduced, was Defence consulted
or did Defence put up a case for the exempted income amounts of
its members in relation to the Medicare Levy Surcharge test?
WGCDR
Peter Davis
Director
Personnel Reserves - Air Force Medicare surcharge?
The
official response to the above letter is as follows:
The Government introduced the Medicare Levy Surcharge (MLS) as
part of a package of measures designed to encourage people to
retain or take up a private health insurance option. Individuals
and families on higher incomes, who do not have private patient
hospital cover for themselves and all of their dependants (including
their spouse or children), may be liable to pay MLS for any period
during the income year that they did not have this cover. By removing
the member’s income, as you have suggested, from the family income
test would undermine the integrity and equity of the system.
Members
of the Australian Defence Force (ADF) will be exempt from MLS
if they were in an exemption category for the full income year
and:
