VISA TAX & MEDICARE EXEMPTION

What changes when your visa changes?

Answer a few questions to see your tax, Medicare position, exemption, working and source.

Questions

Questions people actually ask

Answered against the published rules, and dated.

What is a Medicare Entitlement Statement?

A statement from Services Australia confirming you were not entitled to Medicare for a period. It is what lets you claim the exemption from the Medicare levy on your tax return, at question M2. Without it the exemption cannot be claimed, however clearly you qualify.

Does applying for permanent residency change anything?

Yes, and this is the one most people miss. Once you have applied for permanent residency and been granted work rights, you get interim access to Medicare. That makes you entitled, so the levy applies from that point and the exemption is gone.

Which countries have a reciprocal agreement?

Eleven: the United Kingdom, Ireland, New Zealand, Italy, the Netherlands, Sweden, Finland, Norway, Belgium, Malta and Slovenia. Holding one of those passports generally means you have Medicare access here, so the levy applies and no exemption is available.

Is overseas visitor health cover the same as hospital cover?

No. Overseas visitor cover is required under visa condition 8501 and is a condition of your visa. Australian hospital cover is what clears the Medicare levy surcharge, and only matters if you are entitled to Medicare in the first place.

Do I still pay income tax?

Yes. The exemption is from the Medicare levy and the surcharge, not from income tax. Most temporary residents on working visas are taxed on the resident scale — but not working holiday makers. A 417 or 462 holder is taxed at 15c from the first dollar with no tax-free threshold, which costs $2,730 more than the resident scale at a $45,000 income.

Stamp duty Transfer duty in every state and territory Take-home pay From the package offered to what actually lands Medicare levy surcharge Whether hospital cover costs less than the surcharge