Medicare Levy: To Pay or Not to Pay?

1. Medicare Levy: To Pay or Not to Pay? Posted on 23 February 2019 An essential to traveling abroad is making sure you’re covered, healthwise. That way, you’ll have peace of mind and enjoy your Australian holiday. And that’s what makes Australia such a great travel destination for working holiday makers because you have an additional safety net (on top of your travel health insurance): Medicare coverage. But, you’ll need to make sure if you’re covered or not, starting with whether you need to pay the Medicare Levy. What is the Medicare Levy? The Medicare Levy is a tax that is used for funding Medicare. Medicare is a medical services program that covers Australian residents who require treatment, for freeor at a lower cost. Medicare gives taxpayers access to emergency medical services, including, but is not limited to: Outpatient care; preventive services; and limited physician services

2. Lower costs for prescription medicines and medical supplies Inpatient hospital care; hospice care; and/or home health care Who are required to pay levy? The good news is, the Australian Taxation Office (ATO) makes it clear: Most working holiday makers are foreign resident taxpayers, and are therefore, not obliged to pay the levy. But if you are classified as an Australian resident for tax purposes, then you do. If you’re classified as a foreign resident taxpayer (and exempted from the Levy), be sure to get travel health insurance, or check if you are eligible under an Reciprocal Health Care Agreement (read on, for more on this). On the other hand, if you’re identified as an Australian resident for tax purposes, your levy payments would generally be 2% of your taxable income. But not everyone pays the same percentage. If your annual salary is above a minimum tax threshold set by the ATO, you are obliged to pay the full levy. You may pay a lesser tax ratedepending on your tax return information. To know more about your 2018-2019 tax rates, ask pinkcow. Reciprocal Health Care Agreements: because Australia does care about your health and welfare What happens if you need emergency medical care and you’re not covered under Medicare? This is where getting travel health insurance would be a good idea—and also, if your country has a Reciprocal Health Care Agreement with Australia. A Reciprocal Health Care Agreement covers the cost of emergency care, and essential medical treatment for illnesses or injuries that require immediate attention, to foreign tourists (includingworking holiday makers). Australia has standing care agreements with a number countries and you may ask pinkcow to know more and learn whether your country has a care agreement with Australia and what coverage you may enjoy. If you are required to pay for the Medicare Levy (being classified as an Australian resident for tax purpose), don’t take it as an added tax burden. Knowing that you are covered if anything untoward happens (knock on wood!) offers peace of mind as you enjoy your Australian holiday getaway. Claim Your Tax Back Now!