Morley

This is my first post for a while on here following our move to Brisbane earlier this year. I was wondering if I could get some advice & guidance on tax returns....I will explain my situation.

I am on a employer sponsored 457 visa. As part of the package my wife & I receive full private healthcare cover which is paid for by the company.

Am I right in thinking that 1) the medicare levy is deducted by my employer each month from my gross salary and 2) given I have private healthcare I would be exempt from the medicare levy surcharge?

As such on the tax return, all I need to enter is the total amount earned and the total amount I have paid in tax, given the employer takes care of point 1 above. Is that right?

I started work here in March so only have the first few months earnings/deductions to declare but just wanted to get my head around how it all works.

Would be grateful for your thoughts!

Red_V_Roger

My understanding is that it depends if you are from a country with a reciprical health care agreement.

i.e. I am from the UK on 457, therefore the company has to pay full medicare from my gross pay, even though we don't get full medicare rights.

Our Japanese employees on 457's don't have any Japan/Oz health care agreement, therefore the employer does not pay any medicare. They have to get all treatment private.

So first question is what country are you from?

jimbo_d

Sorry that's the wrong way around. DIAC say employers have to pay or get their employees on 457s to pay for private healthcare as most countries don't have a reciprical arrangement for medicare, ie they don't get any. The UK & some european countries I believe do, but still it is up to the employer to make sure the employee is adequately covered for healthcare, in the event of any illness or accident that the general hospitals have to treat the employer would be liable for the costs. UK people are actually covered for most things under medicare, but employers still make sure you're covered privately.

Re tax returns you will get a certificate from your healthcare insurer stating how long you have been covered by your private healthcare payments, whether you or your employer have paid, this is what you submit in your return.

Hebe

Also I don't know what your salary is but in Australia, higher income earners who do not have an acceptable level of private hospital cover must pay an additional 1 percent income tax on top of the 1.5 percent Medicare levy for all taxpayers in Australia.

This is called the Medicare Levy Surcharge (MLS). It is administered by the Australian Taxation Office.

Most of the policies which are sold to 457 visa holders, ie medibank overseas cover etc are not considered 'acceptable' and you have to get additional cover - we found this out after our first year here and very much to our detriment.

Morley

Thanks for the responses. I am from the UK.

We have our private healthcare with Australian Health Plans with full, all singing, all dancing cover. So I'm hoping this will ensure we are exempt from the surcharge given my earnings are above the threashold...

Hebe

We had the top cover with Medibank but they failed to tell us that we needed an additional policy to cover the surcharge - just make sure that your policy does

ABCDiamond

Are you confusing Medicare Levy contributions with medical insurance contributions ?

Red_V_Roger

I think the poster is, I was meaning specifically the levy paid by the employer under the Medicare Scheme for the 'national health service'.

They have to pay for UK people on 457 becuase we do get some Medicare cover, but don't have to pay for people who get no cover.

slippery30

benefits for 457 visa are not technically "health insurance"..rather these are called " health plans". consequently, members are not entitled to health insurance rebate.

further, members of these funds are NOT exempt from medicare levy surcharge.

Members from UK will have reciprocal health insurance so they will pay the medicare levy of 1.5%. However, members from other countries can claim exemption from medicare levy at the end of tax year by applying to medicare. The form is available on their website. Note that this exemption is retrospective only i.e can only be claimed after the tax year is over

slippery30

Strictly speaking..this is not a benefit to you. The employer is covering its own risk as they are liable for any cost incurred on 457 sponsored employee.

As i said earlier these plans such as IMAN are NOT health insurance, consequently MLS and health insurance rebate are NOT applicable to these. As i understand is this treatment has NO tax consequence.