Hi.
My question is whether the Medicare Levy Surcharge (MLS) applies if my son is covered under my health insurance that is an "extended family policy". Under the extended family policy, my son has full hospital cover that is classified as an "appropriate level of private patient hospital cover". He is over 25 and has just started working. He will earn more than $90k per year and will have to pay the MLS if he does not have the "appropriate level of private patient hospital cover". Under the extended family policy, my son is listed as an adult dependent who is fully covered (noting that the policy can only be in my name). He pays me the additional premium for the cover. It is cheaper for him to be covered under the extended family cover than to purchase a separate policy for the same level of cover.
Question M2 in the tax return question asks: For the whole period 1 July 2022 to 30 June 2023 were you and all of your dependants (including your spouse) – if you had any – covered by private patient hospital cover? My son's answer would be "yes".
Then, in the "Private health insurance details" section, my son would write the health fund ID and the membership number (as per the extended family policy that is in my name but lists my son as a person who is covered). As per the ATO's tax return instructions, my son would write "F" in the "Tax claim code" box. He would leave labels "J" and "K" blank because the health fund does not acknowledge that he paid a premium (even though my son has indirectly done so by paying me to pay the health fund).
The ATO's website says that my son would not have to pay the MLS if he has "an appropriate level of private patient health cover". I'd argue that the answer is yes he does have health cover, as per my rationale above. However, the health fund call centre said that my son would have to pay the MLS if he didn't take out a new policy in his own name.
It'd be great if someone can tell me whether my son would have to pay the MLS in the above noted circumstance.
Thanks for your help.
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