The Medicare levy is a payment that Australians contribute through their income tax to help fund the public healthcare system, Medicare. The levy is usually 2% of your taxable income, and you pay it on top of the tax you pay on your taxable income. However, some people may be exempt from paying the Medicare levy if they meet certain criteria set by the Australian Taxation Office (ATO) . These criteria include:

• Medical exemption: You may be able to claim a full or half Medicare levy exemption if you have certain medical requirements.

• Foreign resident exemption: You may not have to pay the levy if you are a foreign resident temporarily working in Australia.

• Not entitled to Medicare benefits: You may not have to pay the levy if you were not entitled to Medicare benefits.

• Dependants exemption: You may be able to claim a full or half Medicare levy exemption if you have dependants who meet certain criteria.

If you are eligible for a Medicare levy exemption, you can claim it when you file your tax return at the end of the financial year. You will need a Medicare Entitlement Statement to prove that you are not entitled to Medicare benefits. It is important to note that taking out private health insurance or hospital cover does not exempt anyone from paying the Medicare levy.