12 May 2009

Increase In the Medicare Levy and Medicare Levy Surcharge Low-Income Thresholds

To ensure that Australians on low incomes remain exempt from the Medicare levy, the Government will increase the Medicare levy low-income thresholds.

From the 2008-09 income year, the Medicare levy low-income threshold will increase to $17,794 (up from $17,309) for singles and to $30,025 (up from $29,207) for couples.

For families, the additional amount of threshold for each dependent child or student will also be increased to $2,757 (up from $2,682).

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

Those on low incomes are among the most vulnerable Australians - particularly amid this global recession - and the Rudd Government is determined to make sure these Australians remain exempt from the Medicare levy.

The increase in the singles threshold also ensures that a low-income family member in a family with a combined income above the Medicare levy surcharge family threshold will not be required to pay the Medicare levy or Medicare levy surcharge.

The Medicare levy low-income threshold for pensioners below Age Pension age will also be increased.  From 1 July 2008, the threshold will rise to $25,299 (up from $22,922).  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 $205 million over the forward estimates period.