Deciding to move to Singapore and become an Australian expat in this city state can be a big change for many people, which brings with it a number of important decisions. Of these many decisions, one of the most important is deciding what to do about you and your family’s health insurance. This is also one of the more confusing areas for many Aussie expats, and that is what to do about your Medicare while you’re living abroad.
I’ve written this article to help clarify the rules and also to dispel some of the more common myths we come across when it comes to health insurance and Medicare for Australian expats.
It’s an important first step that you don’t simply put your head in the sand and ignore your Medicare or private health insurance in Australia just because you’ve moved abroad. Living in Singapore, or elsewhere for that matter, does not guarantee that you are not still considered an Australian resident for tax purposes. In fact, if you are still an Australian tax resident, not only will this mean that you would be required to pay Australian tax rates on your Singapore salary, you would also be liable for the Medicare levy in Australia.
To determine your Australian tax residence, you can check out my previous article by clicking here. As you’ll quickly realise, it is not simply a matter of living outside the country and I would recommend that you review your own situation here.
If you are determined to be an Australian resident for tax purposes, then this will mean:
- Medicare Levy:
- You will remain liable for the Medicare Levy on your global taxable income.
- Australians are provided with access to healthcare from the taxpayers who pay 2% of their Australian taxable income thanks to Medicare.
- Medicare Levy Surcharge:
- If you don’t have the right about of private health insurance in place, and your income exceeds the relevant threshold, you could also be liable for the Medicare Levy Surcharge. Check out more about the surcharge from the ATO here – https://www.ato.gov.au/individuals/medicare-levy/medicare-levy-surcharge/
If you are determined not to be an Australian resident for tax purposes then:
- You will not be liable the Medicare Levy or the Medicare Levy Surcharge
Medicare eligibility for Australian expats in Singapore can be considered a grey area. The Health Insurance Commission (HIC) has confirmed that Australians living abroad will continue to be covered by Medicare for a period of 5 years. This means that if you wish to claim your Medicare benefits when you do return to Australia for a holiday or for business, then you must have a Medicare card that has an expiry date beyond the 5 year limit. Once the 5 years has passed, you will no longer be eligible for the Medicare benefits.
It’s also important to recognise that Australia has reciprocal health care agreements with a number of countries including New Zealand, Norway and the United Kingdom, however Singapore is not one of these countries. This highlights the importance of ensuring that you and your family have appropriate private health insurance either through your employer, or separately in Singapore as your Medicare rights will not apply here.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group, specialist division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian expats in Singapore.
Book a complimentary consultation here.
Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.