Who doesn't have to pay the 2% Medicare levy, when you get a full or a half exemption, and how temporary residents claim it with a Medicare Entitlement Statement.
Key facts
- Most Australian residents pay the Medicare levy of 2% of taxable income. You can claim an exemption in your tax return if you're in an exemption category.
- The three categories: certain medical conditions (Category 1), foreign residents (Category 2) and people not entitled to Medicare benefits (Category 3).
- Temporary residents need a Medicare Entitlement Statement from Services Australia before they lodge; it can take up to 8 weeks.
- Having a spouse or child who isn't exempt can reduce the exemption to half, or remove it for Category 2 and 3 periods.
- Separately, low-income earners pay a reduced levy or none: single taxpayers pay none on taxable income up to $28,011, phasing in to the full levy at $35,013 (2025–26 thresholds).
Exemption categories
| Category | Who | Exemption |
|---|---|---|
| Category 1: medical | Blind pensioners, and people entitled to full free medical treatment for all conditions under Defence Force arrangements or a Veterans' Affairs Gold Card | Full or half, depending on dependants |
| Category 2: foreign residents | Foreign residents for tax purposes, for the period they were foreign residents | Full (part year: only if no dependants or all dependants exempt) |
| Category 3: not entitled to Medicare benefits | Temporary residents with a Medicare Entitlement Statement from Services Australia, and some members of diplomatic missions or consular posts | Full, only if no dependants or all dependants (including your spouse) exempt |
Full or half exemption (Category 1)
| Your situation | Exemption |
|---|---|
| No dependants | Full |
| Every dependant (including your spouse) is exempt or pays the levy | Full |
| At least one dependant, such as your spouse, isn't exempt and doesn't have to pay the levy | Half |
| Single or separated with shared care of a child who isn't exempt, and you get Family Tax Benefit Part A for that child | Half for the days you had care, full for the other days |
| Both partners in Category 1 with a joint dependent child who isn't exempt | One full and one half, by family agreement |
A family agreement, signed by you and your spouse, says who claims the full and who claims the half exemption. You keep it; you don't send it to the ATO unless asked.
Temporary residents: the Medicare Entitlement Statement
- Apply to Services Australia for a Medicare Entitlement Statement (MES) through myGov; applications open on 1 July.
- Wait for it: processing can take up to 8 weeks. Don't lodge your tax return until you have it.
- In your tax return, claim the exemption category for Medicare benefits and enter the number of days you qualified.
A MES doesn't make you exempt on its own: you must have no dependants, or all your dependants, including your spouse, must also be exempt.
Dependants
For the exemption, a dependant is an Australian resident you maintained who was your spouse, your child under 21, or your child aged 21 to 24 in full-time education with adjusted taxable income under $282 plus $28.92 for each week you maintained them. You maintained them if you lived together, provided food, clothing and lodging, helped with living, medical or education costs, or paid child support.
Common questions
Who is exempt from the Medicare levy?
Blind pensioners, people entitled to full free medical treatment under Defence Force arrangements or a Veterans' Affairs Gold Card, foreign residents for tax purposes, and temporary residents who weren't entitled to Medicare benefits and have a Medicare Entitlement Statement. Dependants can reduce or remove the exemption.
How do I get a Medicare Entitlement Statement?
Apply to Services Australia through myGov from 1 July. Processing can take up to 8 weeks, and you need the statement before you lodge your tax return.
I'm on a 482 visa with a spouse who has Medicare. Am I exempt?
No. The ATO's example: a temporary resident with a Medicare Entitlement Statement can't claim the exemption if their spouse was entitled to Medicare benefits, because every dependant must also be in an exemption category.
What counts as a dependant?
An Australian resident you maintained who was your spouse, your child under 21, or your child aged 21 to 24 in full-time education whose adjusted taxable income was under $282 plus $28.92 for each week you maintained them ($1,786 for a full year).
Is a low income the same as an exemption?
No. Low-income earners get a Medicare levy reduction instead: for a single taxpayer, no levy up to $28,011 of taxable income and a reduced levy up to $35,013 (2025–26 low-income thresholds, as 2026–27 thresholds are not yet published). Use the Medicare levy calculator to work it out.
See also the Medicare levy and surcharge calculator and how much tax will I pay.
Sources: ATO Medicare levy exemption, medical exemption, foreign residents, not entitled to Medicare benefits and dependants; low-income thresholds from the ATO's Medicare levy reduction (2025–26 low-income thresholds, as 2026–27 thresholds are not yet published). Checked 22 October 2026.