The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

10 May 2011


Keeping Low-Income Earners Exempt from Medicare Levy

The Gillard Government will ensure low-income Australians remain exempt from the Medicare levy by increasing the low-income thresholds.

We understand that cost of living increases hit low-income Australians hardest. Increasing these thresholds will help ensure that the Medicare Levy does not add to those cost pressures for individuals, families and pensioners.

From the 2010-11 income year, the Medicare levy low-income threshold will increase to $31,789 (up from $31,196) for couples, and to $18,839 (up from $18,488) for singles.

For families, the additional amount of threshold for each dependent child or student will also be increased to $2,919 (up from $2,865).

The increase in thresholds generally takes into account movements in the Consumer Price Index.

The Medicare levy low-income threshold for pensioners below Age Pension age will also be increased.  From 1 July 2010, the threshold will rise to $30,439 (up from $27,697).  This will ensure that pensioners below Age Pension age do not pay the Medicare levy when they do not have an income tax liability.

This measure has a cost to revenue of $125 million over the forward estimates period.

This Budget recognises that we have a patchwork economy with some people doing very well while others struggle with cost of living pressures.

Finding room for this important measure in a Budget that makes substantial savings to return to surplus in 2012-13 shows the strength of the Government's commitment to support Australians on low incomes.

10 May 2011