How to File for a Medicare Levy Exemption in Australia: A Complete Guide
What is Medicare? Medicare is the Australian Government's universal health scheme. The Medicare levy helps fund some of the costs of Australia's public health system known as Medicare and guarantees all citizens access to a wide range of health services at little or no cost.
The way that Medicare works is that it is built into the income tax that all PAYG (Pay As You Go) workers have deducted from each pay-cycle and equates to roughly 2% of your taxable income.
Why do I have to pay this when I don’t get the health benefits associated? The answer to this question is that you don’t have to pay it – well you do, as it forms part of the tax rates as mentioned above, but you can file for an exemption at the end of the financial year, or when leaving Australia permanently.
You may get a reduction or exemption from paying the Medicare levy, depending on you and your spouse's income and circumstances.
The Medicare levy surcharge (MLS) is a separate levy to the Medicare levy. Depending on your personal circumstances, you may need to pay the MLS in addition to the Medicare levy.
Where applicable (we will explain the qualifying factors below) the Medicare charges will be reimbursed to you as part of your income tax refund. Bonus!
Do I Qualify?
Before we explain what is involved in the exemption process, let's look at the qualifying factors here – in order to be entitled to file for a Medicare levy exemption there are two key criteria:
- You must have earned in excess of $26,000 in the financial year (2024)
- You must be on a temporary visa in Australia, such as a 417 Working Holiday, 457 Sponsorship or a Student Visa
Once you meet the above requirements and are from a non-Commonwealth country that does not avail of the Medicare benefits, you can request an exemption certificate!
It is easier to list the countries that can’t apply for the exemption certificate, than those that can – the following are all countries that can't avail of the benefits of the Medicare Scheme. If you reside in one of these, this application will NOT apply to you unfortunately:
UK, Northern Ireland, Italy, Malta, Sweden, Netherlands, Finland, Norway, Belgium, Slovenia
Our average Australian tax refund is AU$2600
Like all good processes, there is some paperwork to be filled. Starting with the Medicare Levy Exemption application form which can be downloaded from the Medicare website. This is pretty straightforward to fill in, but the supporting documents is where things get interesting so we have listed all this below:
- Copies of Passport: this application requires that you send CERTIFIED copies of the bio data page of your passport, and ALL entry and exit stamp pages.
- Copies of all Visas: this application also requires that you issue the Medicare office in Tasmania with a CERTIFIED copy of ALL Visas that you have held for Australia – for example if you had initially visited Australia on a Tourist ETA, fell in love with this beautiful country, and returned on a Working Visa.
- Holiday prior transitioning to a sponsorship: yes, you guessed it. Medicare wants copies of all three of the above visas to issue the exemption certificate.
Failure to send the correct information to the Medicare office will result in significant delays, as they will post the full application back to you to correct the issue(s) and you effectively will be starting the process from scratch!
Key Tip: Exemption Period
One key tip we would highlight is that on the form you are asked to confirm the period you are applying for exemption; part year or full year. Please only say that you are applying for the full year exemption if you have resided in Oz for the full year (July to June). If you entered Australia during the year, please specify your entry date to year end, or exit date pending your situation. Remember you have sent your passport pages to Medicare so they know when you entered, and if there are discrepancies here they will send all back to you again.
The above process needs to be completed annually, or if you are behind on your tax filing and are lodging a few tax returns, you will need to complete separate forms and send all supporting information per year that you are applying for exemption.
Our average Australian tax refund is AU$2600
Sending your paperwork
Once all paperwork and supporting information is ready, the process is as simple as sending all to the Medicare office in Tasmania. MES may take up to 8 weeks to process the application if you apply between July and November. Once you have your exemption certificate, you are now ready to visit your tax agent and see about getting some Australian tax return!
If you want to know any more information about the process of filing for a Medicare Levy Exemption, please get in touch and we would be happy to advise, and can also let you know what difference the exemption stands to make to your refund!
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