ATO launches data-matching program for false Medicare levy claims
The Tax Office will receive Services Australia records from 180,000 individuals to crack down on dodgy levy exemption claims.
The ATO will implement a Medicare levy data-matching program aimed at cracking down on false exemption claims using data from government payments body Services Australia.
Records of names, birthdates, residential addresses and entitlement details for approximately 180,000 individuals would be obtained between 2024 and 2026, according to a gazette notice this week.
“The Services Australia specified benefits and entitlements data-matching program will allow us to identify and address incorrect claims to the Medicare levy exemption and Medicare levy surcharge as reported in tax returns by clients,” the ATO said.
To claim a full exemption from being charged for Medicare, taxpayers must have a Medicare Entitlement statement (MES) from Services Australia showing they were not entitled to Medicare benefits as a temporary resident or had no dependants during that period.
However, having an MES does not result in an automatic exemption from the levy, the ATO said. “To receive a Medicare levy exemption, all your dependants must also be exempt from Medicare benefits.”
The ATO said it would deny exemption claims if individuals declared they were not entitled to receive Medicare benefits but did not hold a valid MES or where data showed the number of days claimed was different to what was included in the MES.
Identifying incorrect exemption claims would help the ATO “provide education and assistance to support correct reporting of client information in tax returns”, it said, developing strategies to improve compliance in the future.
The data-matching would also speed up the processing of tax returns and payment of refunds to those genuinely entitled to claim the exemptions as well as allow the ATO to check businesses were fulfilling their tax and super registration, lodgment, reporting and payment obligations.
Finally, the Services Australia data would also allow the ATO to exclude taxpayers with a genuine Medicare levy and levy surcharge exemption claim.
“By excluding these clients from compliance action ensures they do not receive unnecessary contact from us,” the ATO said.
The ATO's use of data-matching for Medicare levy claims follows a similar program to tighten compliance around rental bond income. In February, it announced it would acquire personal details and rental bond information of 900,000 landlords from state and territory rental bond regulators.
Last year, it also expanded the use of information reported through STP by employers and data from super funds to follow-up on employer non-compliance.
“We continue to expand our reach and source high quality third-party data from other sources. This includes areas such as: crypto asset transactions sharing economy – accommodation providers property management reports novated lease vehicle information,” the ATO said.
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