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sesa403026(Enthusiast)Enthusiast
22 Sept 2021

Hi there,

Hope this email finds you well. I'm writing to check on behalf of my friend. She is an Australian citizen with Medicare. But she's been out of Australia for the last 20 and just came back in July. She'll continue to work on her overseas job remotely and her company will buy her health insurance with coverage for Australia - she used it before in Australia for GP / hospital visits and dental services. She's likely to make over AUD 200k this financial year.

So our questions are:

a. Can this overseas health insurance be considered as "Australian" private health insurance to minimize any Medicare Levy Surcharge?

b. I understand for new overseas returnees, there is a "grace period" for getting private health insurance before Medicare Levy Surcharge kicks in. If yes, how long is the "grace period"?

Would greatly appreciate your advice, as always. :)

Thanks a lot

sesa403026

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Most helpful reply

RichATO(Community Support)Community Support
22 Sept 2021

Hi @sesa403026

Under the medicare surcharge levy rules, private patient hospital cover does not include cover provided by an overseas fund.

Your friend will also need to declare her foreign income as taxable income in Australia so will be paying the medicare levy through taxation system.

Our answers to your questions are:

a) No, it can't be considered as eligible private health insurance cover for MLS.

b) There is no grace period for having the private hospital insurance cover to avoid paying some MLS. You will pay for every day from 1st July that you were not covered appropriately. You may be thinking about the Lifetime Health Cover (LHC) loading that is payable when you take out private hospital; cover later in life. There are some grace periods for that according to circumstances. You can read about Lifetime Health Cover here.

All replies

Most helpful reply

RichATO(Community Support)Community Support
22 Sept 2021

Hi @sesa403026

Under the medicare surcharge levy rules, private patient hospital cover does not include cover provided by an overseas fund.

Your friend will also need to declare her foreign income as taxable income in Australia so will be paying the medicare levy through taxation system.

Our answers to your questions are:

a) No, it can't be considered as eligible private health insurance cover for MLS.

b) There is no grace period for having the private hospital insurance cover to avoid paying some MLS. You will pay for every day from 1st July that you were not covered appropriately. You may be thinking about the Lifetime Health Cover (LHC) loading that is payable when you take out private hospital; cover later in life. There are some grace periods for that according to circumstances. You can read about Lifetime Health Cover here.

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Medicare levy surcharge for someone who has returned from overseas | ATO Community