Australians going overseas cannot claim Medicare benefits, yet must pay the Medicare levy, and if they go for work purposes cannot claim any private insurance as a tax deduction, according to official advice to a Canberra academic.
Professor Hans Kuhn, emeritus professor of Germanic languages at ANU, has been trying to get an answer to his Medicare query for several months. He got a reply last week.
Professor Kuhn was away in Europe in 1991 and again last year for six months. He was advised to take private medical insurance, because Medicare no longer automatically paid the equivalent of Australian benefits for overseas medical costs (except in a limited number of countries where there is an exchange agreement).
Professor Kuhn thought that if he was not getting the benefit, he should not have to pay the levy or alternatively, the private insurance should be tax deductible. The Tax Office said he would need a certificate from the Minister for Health stating he was not eligible to claim Medicare benefits for a stated period and he would get an equivalent reduction in the levy.
He wrote to the Department of Health in November and two months later was told that to get exemption from the levy he had to be ineligible for benefits. And the only people “”not eligible” for Medicare were non-residents. Australian residents visiting overseas were still eligible for benefits “”and hence have a continuous legal entitlement to Medicare benefits notwithstanding that from time to time you may temporarily not have physical access to the Medicare arrangements. The taxation legislation in this area has been framed so as to reflect the policy of the Government that payment of the Medicare levy should be based on the individual’s capacity to pay. and not on the individual’s access to Medicare benefits at any point in time.”
In plainer words, Professor Kuhn said, this meant “”We will take your money, but we will not necessarily give you the benefits for which it is raised. (Serves you right for pursuing your activities abroad, even though they may add to your taxable income.)”
Professor Kuhn said, “”I do not wish to waste more bureaucrats’ manhours by pestering them any further, but these pitfalls of the Medicare levy deserve to be more widely known.”