If your client is entitled to a Medicare levy exemption, the client must apply for a Medicare Entitlement Statement through Services Australia. This applies to anyone that has an exemption including visa holders and part-year exemptions.
The statement must be received by the time we lodge the return. I realise there may be some pushback from clients as other tax agents out there may not request this. However, with the new rules (discussed below), and ATO data matching, it is important that we get this right.
What will happen if they don't get it?
They will be charged Medicare levy - 2% of their income
They may be charged interest if incorrectly declared
You may need to lodge an amended tax return - you likely will spend time to fix up at your cost.
It is crucial that we comply with these new rules to avoid any issues with both the ATO and our clients.
If they have already lodge their tax return, please ensure that you still ask them to get it as I'm sure the client would not like to pay 2% of their taxable income to Medicare if they don't need to.