ATO gets tough with Medicare levy exemption cheats

Taxpayers dodging payment of Medicare levy to be identified under ATO-led attack
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01.Crackdown on Medicare cheats

medicare levy payment

An Australian Taxation Office (ATO) initiative could save taxpayers millions of dollars by cracking down on people who fraudulently claim exemption from paying the Medicare levy.

To help fund Medicare, most taxpayers pay a levy of 2% (up from 1.5% as of 1 July 2014) of their taxable income. An additional Medicare levy surcharge must be paid if your income is above a particular threshold – unless you pay for an appropriate level of private patient hospital cover (private health insurance). Only certain people are exempt from the levy (and surcharge).

The ATO’s program – called the Medicare Levy Exemption Certificate data matching program – aims to ensure taxpayers not entitled to the exemption aren’t unfairly avoiding their taxation obligations. In addition, it will ensure taxpayers who are exempt from the Medicare levy are receiving their entitled exemption.

The ATO will acquire data from the Department of Human Services for people that have been granted an exemption from paying the Medicare Levy for the 2013, 2014 and 2015 financial years.

These records will be electronically matched with certain sections of ATO data holdings to identify non-compliance with registration, lodgement, reporting and payment obligations under taxation and superannuation laws. In limited and specific circumstances, individual records may be passed on to state and territory revenue offices and law enforcement agencies.


It’s estimated that 130,000 exemption certificates are issued each year. You’re only exempt from the levy if you’re a foreign resident, a resident of Norfolk Island, not entitled to Medicare benefits, or you meet certain medical requirements.


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