Originally Published 2nd July 2008
The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No 2) 2008 was passed by the House of Representatives on 13 October 2008 after agreeing to amendments made in the Senate. The Bill now effectively awaits Royal Assent.
The amendments made in the Senate increase the thresholds for payment of the Medicare Levy Surcharge to $70,000 for individuals (instead of $75,000 as originally proposed in the Bill) and to $140,000 for couples (instead of $150,000 as originally proposed).
The new thresholds will be indexed to Average Weekly Ordinary Time Earnings in $1,000 increments, rounding down. The new thresholds will apply from the 2008-09 income year i.e. from 1 July 2008.
The Bill also contains transitional measures so that individuals who obtain appropriate private health cover before 1 January 2009 will avoid the levy surcharge for the period 1 July 2008 to 31 December 2008.
For assignees coming to Australia with whom we share a reciprocal health care agreement, they are subject to the Medicare Levy and Medicare Levy Surcharge if they were resident in one of the following countries immediately prior to coming to Australia:
| Finland | Italy | Malta | Netherlands | New Zealand |
| United Kingdom | Sweden | Ireland | Norway |
Assignees from all other locations will be exempt from the Medicare levy and Medicare Levy Surcharge provided they obtained a certificate from the Medicare Levy Exemption Certification Unit of Medicare Australia showing that they are not entitled to Medicare benefits because they were a temporary resident for Medicare purposes.
Please note – this does not remove the employer from their obligations under a 457 visa to pay all medical or hospital expenses for an employee (and accompanying family member) for treatment in a public hospital (other than expenses that are met by health insurance or reciprocal health care arrangements). This undertaking continues until all expenses are paid.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.