How do working holiday makers and students get the Medicare levy exemption, and what is an MES?
The Medicare levy is 2% of your taxable income. If you were a foreign resident for tax purposes for the whole year, you can claim the foreign residents exemption in your tax return without an MES. If you lodge as an Australian resident for tax purposes and want an exemption for a period you weren't entitled to Medicare benefits, you need a Medicare Entitlement Statement (MES) issued by Services Australia. You generally apply for the MES yourself from 1 July each year, for the previous financial year, through myGov or with form MS015.
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What is the Medicare levy?
The Medicare levy is an amount you pay in addition to the tax on your taxable income. It helps fund some of the costs of Medicare, Australia's public health system. It is 2% of your taxable income.
The Australian Taxation Office (ATO) calculates your Medicare levy when you lodge your tax return. Generally, the tax your employer withholds from your pay (PAYG) includes an amount to cover the levy. That describes the general withholding tables; working holiday makers are withheld under a separate schedule (Schedule 15), where a registered employer withholds 15% on total payments up to $45,000 in an income year. Depending on your and your spouse's income and circumstances, you may get a reduction or an exemption.
When can working holiday makers and students get an exemption?
Two exemptions mainly apply to temporary visa holders. Which one is relevant depends first on whether you were an Australian resident for tax purposes.
| Your situation | ATO exemption | MES |
|---|---|---|
| Foreign resident for tax purposes for the whole year | Foreign residents exemption — exemption category 2 in your tax return. You can claim a full exemption for the whole year. | The ATO page sets no MES requirement. |
| Foreign resident for tax purposes for only part of the year | Foreign residents exemption (category 2) — you can claim a full exemption for that period if you had no dependants then, or all your dependants were in an exemption category. | The ATO page sets no MES requirement. |
| Australian resident for tax purposes, but not entitled to Medicare benefits for a period because you were a temporary resident for Medicare purposes | Not entitled to Medicare benefits — exemption category 3 in your tax return | Required. You need an MES showing you weren't entitled to Medicare benefits for that period. |
The ATO says most people who come to Australia for a working holiday or visit, including working holiday makers on 417 and 462 visas, are not Australian residents for tax purposes. But your visa type alone doesn't decide your residency: the ATO looks at your purpose for being in Australia and how you actually live (your living arrangements, community and family ties, where your assets are, and so on).
This page doesn't decide your residency. Your registered tax agent checks which exemption applies to you when preparing your return.
Does it matter if I have a spouse or children?
It can. You can claim the not-entitled-to-Medicare exemption (category 3) only if you had no dependants for that period, or all your dependants, including your spouse, were also in an exemption category. The ATO gives an example where a person who has an MES still can't claim the exemption because their spouse was entitled to Medicare benefits.
A dependant here means an Australian resident for tax purposes whom you maintained: your spouse, your child under 21, or your child aged 21 to 24 in full-time education whose income is below a set limit. Services Australia says that if your spouse is also not eligible for Medicare, you will both need a statement before you can start your tax return.
What is an MES (Medicare Entitlement Statement), and who issues it?
An MES is a statement issued by Services Australia that shows the period during a financial year that you weren't eligible for Medicare. You can get one if you weren't eligible for Medicare for all or part of a financial year.
Having an MES doesn't automatically mean you are exempt. The ATO decides whether you need to pay the Medicare levy, and the MES is only one of the factors it takes into account.
You apply for the MES yourself, directly with Services Australia. TaxReturn77 does not apply for or issue the MES on your behalf.
When and how do I apply for an MES?
Applications generally open on 1 July each year, for the previous financial year. For example, for the 2025‑26 financial year (1 July 2025 – 30 June 2026), you can apply from 1 July 2026. If you are leaving Australia, Services Australia sets out separate conditions for applying before you leave, so check its application page.
| Method | Details |
|---|---|
| Online — MES dashboard | Apply through the MES dashboard in the Individual Healthcare Identifiers (IHI) service in myGov. You can also track your application, upload documents and download your statement there. If you don't have an IHI you need to create one, and if it isn't linked to myGov you need to link it. You must be in Australia when you apply for an IHI. |
| Online — MES online application | If you can't use the MES dashboard, you can apply with the Medicare Entitlement Statement online application in myGov. |
| Paper form — MS015 | Download and complete the Application for a Medicare Entitlement Statement form (MS015). This is the option for when you can't apply online. |
Whichever method you use, you need a copy of the name and photo page of your passport to prove your identity, and you may be asked for other documents such as your current visa. Uploaded files must be in PDF, JPG, PNG, GIF or BMP format, less than 5MB each and less than 10MB in total.
If you have already left Australia, you can't create a new IHI, so the MES dashboard may be hard to use. In that case, check whether you can use the MES online application or the paper form (MS015).
Do I have to wait for my MES before lodging?
Services Australia says processing can take up to 8 weeks if you apply between July and November. The ATO says that if you claim the not-entitled-to-Medicare exemption (category 3), you must wait until you receive your MES before lodging your tax return. If you were a foreign resident for the whole year and claim the foreign residents exemption (category 2), the ATO page sets no MES requirement.
You can answer the Medicare levy exemption question in the TaxReturn77 form without an MES. The option "I was not entitled to Medicare benefits and have / will apply for a Medicare Entitlement Statement" covers people who haven't applied yet. That is only about answering the form question; the ATO instruction above applies to lodging the return. Your registered tax agent checks which exemption applies to you.
Is it different if I'm from a Reciprocal Health Care Agreement country?
Australia has Reciprocal Health Care Agreements with 11 countries, and visitors from those countries may be eligible for medical care under Medicare while they are in Australia. The exemption for a period you weren't entitled to Medicare benefits (category 3) assumes you weren't entitled, so if you are from an agreement country you may not meet its conditions.
Check the list of agreement countries on the Services Australia page. People from some agreement countries may need to provide proof of health insurance showing an expiry date when they apply for an MES.
What if I missed the exemption or claimed it incorrectly?
The ATO says you can request an amendment to your tax return if you made a mistake, forgot to include something or had a change in circumstances after lodging. You should wait until your original return is processed before requesting the amendment, and there are time limits on amendments, so check them first.
| Amendment method | ATO guidance |
|---|---|
| ATO online services linked to myGov, or the ATO app | About 15 business days |
| Paper form or letter | Up to 90 business days |
| Electronically through a registered tax agent | The agent submits it through the Practitioner Lodgment Service |
Whether an amendment can apply the exemption, and what the outcome would be, depends on your circumstances, so a registered tax agent decides after reviewing your details.
FAQ
- Do working holiday makers need an MES to be exempt from the Medicare levy?
- It depends on which exemption you claim. If you were a foreign resident for tax purposes for the whole year, you can claim the foreign residents exemption (category 2), and the ATO page sets no MES requirement. If you lodge as an Australian resident for tax purposes and claim an exemption for a period you weren't entitled to Medicare benefits (category 3), you need an MES. Your registered tax agent checks your residency and which exemption applies.
- Where and from when do I apply for an MES?
- You apply to Services Australia, generally from 1 July each year, for the previous financial year. You can use the MES dashboard in myGov (IHI service), the MES online application or the paper form (MS015). If you are leaving Australia, there are separate conditions, so check the Services Australia guidance.
- I've already left Australia. Can I still apply for an MES?
- The MES dashboard needs an IHI, and you can only create a new IHI while you are in Australia. If you can't use the dashboard, check the Services Australia guidance on whether you can use the MES online application in myGov or the paper form (MS015).
- Do I have to wait for my MES before lodging?
- The ATO says that if you claim the not-entitled-to-Medicare exemption (category 3), you must wait until you receive your MES before lodging. Processing can take up to 8 weeks if you apply between July and November. You can answer the exemption question in the TaxReturn77 form without an MES, but the ATO instruction applies to lodging the return. Your registered tax agent checks which exemption applies to you.
- Can TaxReturn77 apply for the MES for me?
- No. You apply for the MES yourself, directly with Services Australia. TaxReturn77 does not apply for or issue it on your behalf.
- If I have an MES, am I automatically exempt?
- No. All your dependants, including your spouse, must also be in an exemption category, and the ATO decides whether you pay the Medicare levy when it processes your return. The MES is one of the factors it considers.
- I already lodged without claiming the exemption. What can I do?
- The ATO says that if you made a mistake or left something out, you can request an amendment after your original return has been processed. Time limits apply, and whether the exemption can be applied is decided by a registered tax agent after looking at your circumstances.
- Is the private hospital cover question in my return related to the MES?
- No, it's a separate matter. Private hospital cover relates to the Medicare levy surcharge (MLS). The MLS is a separate levy charged on top of the Medicare levy, and you may have to pay it if you, your spouse and your dependent children don't have an appropriate level of private hospital cover and your income is above the threshold ($101,000 for singles in 2025‑26).
Sources
- ATO — What is the Medicare levy?
- ATO — Foreign residents Medicare levy exemption
- ATO — Not entitled to Medicare benefits
- ATO — Dependants for Medicare levy exemption
- ATO — Working holiday residency
- Services Australia — How to get a Medicare Entitlement Statement
- Services Australia — After you apply for a Medicare Entitlement Statement
- Services Australia — Application for a Medicare Entitlement Statement form (MS015)
- Services Australia — Reciprocal Health Care Agreements when you visit Australia
- ATO — How to request an amendment to your tax return
- ATO — Paying the Medicare levy surcharge
- ATO — Schedule 15: Tax table for working holiday makers
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