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Monday, 6 June 1994
Page: 1363

(Question No. 1340)

Senator Knowles asked the Minister representing the Minister for Human Services and Health, upon notice, on 3 May 1994:

  (1) How many people, who are not entitled to make a claim, pay the Medicare levy.

  (2) Under what types of categories or residency status do these people fall.

  (3) Why is money taken from a taxpayer for Medicare when that person is prohibited from making a claim.

Senator Crowley —The Minister for Human Services and Health has provided the following answer to the honourable senator's question:

  (1-3) The Medicare levy is essentially a taxation measure which partially finances health care in Australia, and its payment is not related to eligibility for Medicare benefits. It is an income related tax and not conceptually a health insurance premium.

  The levy is governed by the Income Tax Assessment Act 1936 and the Medicare Levy Act 1986, both of which are administered by the Australian Taxation Office. Medicare eligibility is established under the Health Insurance Act 1973. My Department does not have access to taxation records including data relating to the Medicare levy. Both sets of legislation contain definitions of Australian residency that determine, respectively, a person's liability for income tax (including the Medicare levy) or eligibility for Medicare. However, the respective definitions do not contain common criteria for residency, as they are each intended to fulfil fundamentally different purposes. I might add that the definition of "Australian resident" in the Health Insurance Act is substantially the same as that contained in other Federal social welfare legislation (eg the Social Security Act).

  Circumstances may therefore arise where persons may be liable for the levy but are not eligible for Medicare benefits. Examples could include: persons visiting Australia as working holidaymakers; visiting entertainers and sportspeople; or other persons who may earn taxable income whilst temporarily in Australia.

  Conversely, many people who do not pay the levy are eligible for Medicare benefits. Examples include, pensioners and others who either do not earn taxable income or whose income is below the threshold at which the levy is payable.