The Government will raise the low-income thresholds for the Medicare Levy and Medicare Levy Surcharge as part of the 2012-13 Budget, reinforcing the Government's commitment to supporting low-income Australians and those most in need.
The increase in the threshold will be backdated to take effect from 1 July 2011.
The Medicare Levy low-income threshold will increase in line with the Consumer Price Index to $19,404 for singles (up from $18,839) and to $32,743 for couples (up from $31,789).
For families, the additional amount of threshold for each dependent child or student will also be increased to $3,007 (up from $2,919).
The increased threshold for families applies for the 2011‑12 income year and future income years while the increased threshold for singles applies only in the 2011‑12 income year, as this threshold will rise to $20,542 in 2012‑13 as part of the Clean Energy Future Plan household assistance package.
The Medicare Levy low-income threshold for pensioners below Age Pension age will also be increased. For the 2011-12 financial year, the threshold will rise to $30,451 (up from $30,439).
This will ensure that pensioners below Age Pension age do not pay the Medicare Levy when they do not have an income tax liability.
From 1 July 2012 the low‑income threshold for this group will be fixed at the level applicable to seniors entitled to the Senior Australians Tax Offset (SATO), as part of the merger of the pensioner tax offset into the SATO, which was announced as part of the Clean Energy Future Plan household assistance package.
This measure has a cost to revenue of $85 million over the forward estimates period.