Medicare Implications for Australian Expats is the first in a series of three articles to help you understand what you need to know about not only the medicare implications for Australian Expats, but also the health insurance implications for Australian Expats. Just because you are living abroad, does not mean you should disregard the implications for medicare and your private health insurance in Australia. In this three part series, I will discuss :
Part 1. Medicare Implications For Australian Expats
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To understand the private health insurance and medicare implications for Australian expats (and how it applies to you), you first need to understand whether or not you are an Australian resident for tax purposes. To help you with this, you can read my article on tax residency by clicking here or for more detailed information you can obtain a copy of my FREE EBook by clicking here.
Medicare Implications For Australian Expats – Medicare Levy
If you remain an Australian resident for tax purposes whilst living abroad then :
- You will remain liable for the medicare levy on your taxable income as if you were living in Australia
- You will remain liable for the medicare levy surcharge of 1-1.5% on your taxable income if your income exceeds approximately A$90,000 (singles) and A$180,000 (couples) subject to a number of adjustments and rules. As the medicare levy surcharge was introduced by the Australian government to encourage high income earners to keep their private health insurance cover you can avoid the levy surcharge by maintaining private health insurance cover in Australia while living abroad. I will discuss this more in part 2 of this series.
If you become a non-Australian resident for tax purposes while living abroad then :
- You will not be liable for the medicare levy or the medicare levy surcharge
Medicare Implications For Australian Expats – Entitlement to Use Medicare
As many expats take out international health insurance, eligibility for medicare services while living abroad is often not particularly relevant. However, there is a lot of confusing information regarding eligibility for medicare while you are living overseas, and I have found it difficult to obtain the correct advice. Many accountants and tax advisors will tell you that if you are not an Australian Resident for tax purposes (and you are therefore not paying the medicare levy) you are not entitled to medicare services. This has been my understanding up until this month. My conversations with Medicare have not been particularly helpful to gain further clarity.
However a number of health insurance professionals have now advised me that Australians living abroad continue to be eligible for medicare for up to 5 years after leaving the country. To access treatment under medicare you will need a valid medicare card. Your medicare card will have a five year expiry period attached to it, and if you need to apply for a new card while living overseas you will need to advise Medicare that you are still an Australian Resident but living temporarily overseas. In any case, I recommend that if you are relying on being able to use medicare services on a trip back to Australia, I would recommend contacting Medicare to confirm your eligibility. After the five year period, you will need to rely on your International Health Insurance to cover your medical care if required on subsequent visits to Australia.
In my next article I will tell you what you need to know about Private Health Insurance as an Australian Expat* to minimise your current and future costs. *Private Health Insurance For Australian Expats refers to private health insurance in Australia as opposed to international health insurance you might take out to cover you while living abroad.
Do you want to understand how much an international health insurance policy may cost you? Contact Cigna Global for a free quote online.
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.
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