myTax 2020 Medicare levy reduction or exemption

Complete this section to work out whether you qualify for a Medicare levy reduction or exemption.

Things to know

Australian residents for tax purposes are subject to a Medicare levy of 2.0% of their taxable income unless they qualify for a reduction or exemption.

A Medicare levy reduction is based on your taxable income. In some cases, you may not have the pay the levy at all. If your taxable income is above the thresholds, you may still qualify for a reduction based on your family income.

A Medicare levy exemption may apply if you meet one of the following exemption categories, you:

• meet certain medical requirements
• are a foreign resident
• were not entitled to Medicare benefits.

You need to consider your eligibility for a reduction or an exemption separately.

If you were not an Australian resident for tax purposes for the whole of 2019–20, you may be exempt from the Medicare levy. For the meaning of Australian resident for tax purposes, see Work out your tax residency status for tax purposes.

Completing this section

At Personalise return, you don't need to make a selection to show Medicare levy reduction or exemption as it's always displayed at Prepare return.

At Prepare return, select 'Add/Edit' at the Medicare and private health insurance details banner.

At the Medicare levy reduction heading:

1. Show the Number of dependent children and students.
   For more information, see Working out your number of dependent children.
   
   Note: We may have populated this for you based on information previously provided to us. Check and correct if necessary.

At the Medicare levy exemption heading:

2. Indicate if you were in one of the exemption categories at any time during 2019–20.
   If Yes, go to step 3.
   If No, go to step 6.
3. Work out the number of days that you qualify for full exemption and then enter the number into Full 2% levy exemption – number of days.
4. Work out the number of days that you qualify for half exemption and then enter the number into Half 2% levy exemption – number of days.
5. If you entered one or more days in Full 2% levy exemption – number of days, answer the question Were you a temporary resident for Medicare purposes and have a Medicare entitlement statement from Services Australia?
6. You have completed the Medicare levy reduction or exemption section and can go to the Medicare levy surcharge section.

We use this information to work out any Medicare levy reduction or exemption for you.

Medicare levy reduction – your number of dependent children

A dependent child is any child who was an Australian resident whom you maintained in 2019–20 and whose Adjusted taxable income amounts in the table below.

Table 1 - Dependent children - ATI thresholds

Category of dependent child	ATI if maintained for the whole year	ATI if not maintained for the whole year
Any child under 21 years old you maintained who was not a full-time student	For the first child: $1,786 For each additional child: $1,410	For the first child: $282 plus $28.92 for each week you maintained them For each additional child: $282 plus $21.70 for each week you maintained them
Any full-time student aged under 25 years old at a school, college or university	$1,786	$282 plus $28.92 for each week you maintained them

If you had a spouse on 30 June 2020 or your spouse died during 2019–20 and you did not have another spouse that year, count all your dependent children.

If you were single or separated on 30 June 2020, count only the number of dependent children for whom you received the family tax benefit (FTB) during all or part of 2019–20. Count them even if you received only the rental assistance component of FTB Part A and you shared the care of the dependent child.