The Government will standardise the dependent child age criteria used to determine a taxpayer’s entitlement to the housekeeper, child-housekeeper, medical expenses and zone tax offsets, as well as the Medicare levy and Medicare levy surcharge, the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, announced today.
“Currently, the dependent child age criteria vary across these entitlements. For example, a taxpayer may be able to take a child into account when claiming a medical expenses tax offset but not being able to take the same child into account for the purposes of the Medicare levy and Medicare levy surcharge,” Senator Coonan explained.
The introduction of a single set of age criteria, namely a child aged less than 21 years or a full-time student aged less than 25 years, will provide consistency across each of the relevant areas of income tax. The age criteria will also be more generous than those currently in place. “This will allow more Australian families to benefit from the dependant related offsets, and the Medicare levy and Medicare levy surcharge family thresholds,” Senator Coonan said.
For example, a family living in a remote area with a dependent child aged 18 could claim up to an additional $188 as part of their zone tax offset. A low income family with a dependent child aged 18 would also be able to earn more before they start paying the Medicare levy. In 2003-04, a family can earn an additional $2,406 for each dependent child before they start paying the Medicare levy.
The measure will have effect from 1July 2005.