As an ADF member, you are entitled to either a full or half exemption from paying the Medicare levy.
A full exemption from the levy may be claimed where:
- You are entitled to full free medical treatment for the whole of the relevant financial year.
- You meet any of these conditions.
- You do not have any dependants (spouse, including de facto, and children under 16 years of age or under 25 years of age receiving full-time education at school or university and with separate net income of less than $1,786).
- You have dependants (ie a spouse who is also an ADF member) who are also entitled to free medical treatment in their own right.
- You have dependants who are all required to pay the Medicare levy on their separate income.
- You have a spouse who is liable to pay the Medicare levy and the spouse contributes to the maintenance of the dependant.
If you have been entitled to full free medical treatment for the entire year but do not meet any of the above conditions (B), you are entitled to a half exemption.
You may be entitled to a partial (full or half) exemption where your circumstances have changed during the financial year (ie your caring duties have changed; you have only been an ADF member for part of the year; your marital or relationship status changed).
Medicare Levy Surcharge
If you had taxable income above certain limits (see family threshold) and did not hold appropriate Australian private health insurance during the year, you may need to pay the Medicare Levy Surcharge (MLS) if you maintained dependants during the year (spouse or children).
The MLS will not apply to ADF members who are single and were entitled to full medical cover during the year. However, it will apply to ADF members who are entitled to a half Medicare exemption.
To avoid the MLS where you have dependants and are above the applicable income limits, you need to ensure that you have Australian private medical insurance that provides a minimum basic hospital coverage to you and all your dependants.
Frequently Asked Questions
I am an ADF member who has had full medical cover for the year, but my spouse is a civilian who has paid the Medicare levy through PAYG withholdings made by their employer. We have no children. Do I need to pay the Medicare levy?
No, you may claim a full exemption from the Medicare levy. However, depending on your spouse’s level of income and whether they held private health insurance, you may need to pay the Medicare levy surcharge.
I joined the defence force part way through the year, am I still exempt for the whole year?
If the conditions are met, you will be entitled for a full-levy exemption from the day you were entitled to receive free Medicare treatment. For example, if all conditions were met from 1 June 2017, you will be able to claim the exemption for 30 days in the 2017 financial year.
I am single/separated with shared-care of my dependant who is entitled to Medicare benefits. Do I need to pay the Medicare levy?
On the days you have care of your dependant child, you are required to pay the half-levy. On the days that you do not have care of your dependant child, you will be entitled to the full Medicare Exemption.
My spouse/partner and I are both defence personnel and we have a dependant who is eligible to access Medicare.
If both you and your spouse would have to pay the Medicare levy if it was not for your exemption-category status, you and your spouse will be required to enter into a family agreement and one person only will be entitled to the half-levy exemption.
Please note, you do not need to send this agreement to the ATO but will be required to keep it with your records.
Please see the following link for more information on family agreements:
What about the Medicare Levy Surcharge, do I need to pay this?
An ADF member who is entitled to a full Medicare exemption does not need to pay the Medicare Levy Surcharge (MLS).