Tax Benefits For Couples On 485 Visa

This article was created for the 2013/14 financial year. View the 2014/15 medicare levy surcharge rates here.

In addition to an array of other benefits, taking out a 485 visa private health insurance policy can also provide the holder with significant tax benefits. All Australian tax payers (whether they are Australian citizens or temporary residents) who do not have an appropriate level of private hospital cover and who earn over a certain income bracket, are required to pay the Medicare Surcharge Levy. This surcharge encourages people to purchase private health insurance, to alleviate the demand on the public health care system and on Medicare.

An appropriate level of hospital cover includes any private hospital cover issued by a registered health insurer for some or all hospital treatments which has an excess of:

  • $500 or less (for a policy covering only one person), or
  • $1,000 or less (for a policy covering more than one person).

Couples on 485 visas are not exempt from this tax, and can therefore avoid this Medicare surcharge by taking taking out 485 visa health insurance a long as they also have reciprocal health cover.

Below is a table outlining the relevant income thresholds for the Medicare Levy Surcharge.

Health Insurance Tax


There are certain circumstances in which couples or families will be exempt from the Medicare Surcharge Levy. These are:

  • When you, your spouse, or your dependent children were in a Medicare levy exemption category (for the whole of the income year)
  • When you, your spouse, or your dependent children had an appropriate level of private patient hospital cover  (for the whole income year)

Failing the above mentioned criteria, all tax payers without private hospital cover are required to pay the surcharge. Depending on the income bracket, this tax can cost tens of thousands of dollars each year. Couples visiting Australia on 485 visas can save themselves this hefty cost by researching different 485 visa health insurance options and taking out private hospital cover before arriving in Australia.