Medicare levy exemption category 3: when does a Medicare Entitlement Statement qualify?

The Australian Taxation Office (ATO) says exemption category 3 can support a full Medicare levy exemption claim for a period when a Medicare Entitlement Statement (MES) shows that the person was not entitled to Medicare because they were a temporary resident for Medicare purposes. During that period, the person must have had no dependants, or all their dependants—including a spouse—must have been in a Medicare levy exemption category. An MES alone does not establish the exemption; a qualifying person claims it through the tax return as exemption category 3 (guidance checked 1 October 2026).

What has to match for category 3?

An MES from Services Australia shows the period in an income year during which a person was not entitled to Medicare benefits. For category 3, the information in the MES and the person’s dependant circumstances must support the exemption for the relevant period.

Requirement	What must be true
MES status	It shows that the person was not entitled to Medicare because they were a temporary resident for Medicare purposes.
Dependants	The person had no dependants for that period, or all dependants, including a spouse, were in a Medicare levy exemption category for that period.
Tax return	The person completes exemption category 3 in the Medicare levy section and claims the exemption through the return.

Does the MES have to cover a full income year?

The ATO expresses the rule for “any period” that meets the conditions, rather than limiting category 3 to a full income year. Your MES identifies the relevant period in the income year, and the dependant condition must be met for that same period.

Why does an MES alone not prove an exemption?

The MES confirms a period of Medicare non-entitlement, but it does not automatically establish a Medicare levy exemption. The ATO also requires the relevant dependant conditions to be met.

Its contrasting 2025–26 examples show the difference:

• Priya: She was on a Temporary Skill Shortage visa, subclass 482, had no dependants, and held an MES covering 1 July 2025 to 30 June 2026. The ATO says she could claim a full Medicare levy exemption for the full year.
• Jed: He was on the same visa subclass and had an MES, but his spouse was entitled to Medicare. Because his spouse was therefore not in a Medicare levy exemption category, the ATO says he could not claim the exemption.

How do I apply and claim category 3?

Stage	What to do
Apply for an MES	There are 2 ways to apply online using a myGov account.
Check the application date	MES applications open on 1 July.
Allow for processing	Services Australia can take up to 8 weeks to process an MES application.
Wait for the statement	You must wait until you receive your MES before lodging the tax return.
Complete the return	If you qualify, claim the exemption through your tax return by selecting exemption category 3 in the Medicare levy section.

The ATO advises applying as soon as possible so you can lodge your tax return correctly and on time.

What else should I check?

This is general information, not an assessment of your visa or insurance policy. If you are comparing OVHC products, check the relevant policy documents before making an insurance decision. For the conditions attached to your visa, check the Australian Government Department of Home Affairs page; “temporary resident for Medicare purposes” is the wording used for the MES test and does not replace a separate visa check.

Sources

• Not entitled to Medicare benefits | Australian Taxation Office

FAQ

Does having an MES automatically make me exempt from the Medicare levy?

No. The MES must show that you were not entitled to Medicare because you were a temporary resident for Medicare purposes, and the relevant dependant conditions must also be met. You then claim category 3 through your tax return.

Can I claim category 3 if my spouse is entitled to Medicare?

Not where your spouse is entitled to Medicare and is not in a Medicare levy exemption category. In that situation, the all-dependants condition is not satisfied, even if you have an MES.

When should I apply for an MES?

MES applications open on 1 July and can be submitted online using myGov. The ATO advises applying as soon as possible because Services Australia can take up to 8 weeks to process an application.

When can I lodge my tax return?

You must wait until you receive your MES before lodging the tax return. If you qualify, complete exemption category 3 in the Medicare levy section.