The Turnbull Government is continuing to protect Australia’s most vulnerable individuals and families, lifting the Medicare levy low‑income thresholds for singles, families, seniors and pensioners so that they will continue to be exempt from the Medicare levy.
One million people are expected to benefit from lifting the Medicare levy low-income thresholds for the 2017-18 income year. Around 70,000 individuals are estimated to not have to pay the Medicare levy altogether and around 950,000 other individuals are estimated to pay less Medicare levy in 2017-18 as a result of the Government’s changes.
The Government has ensured that low-income households who did not pay the Medicare levy in 2016-17 will continue to be exempt from the Medicare levy, or pay a reduced amount, for the 2017-18 income year.
The Medicare levy low‑income thresholds have been increased in line with growth in the consumer price index to address bracket creep and ensure the thresholds keep pace with consumer prices so that low-income taxpayers are protected from having to start paying the levy.
As a result of the Government’s changes, the low-income threshold for a single person has increased from $21,655 to $21,980 so that individuals with a taxable income up to the new threshold will not have to pay the levy.
Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their taxable income does not exceed $34,758 in 2017-18. And couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2017-18 if their combined taxable income does not exceed $48,385 (plus $3,406 for each dependent child or student).
A number of people are also completely exempt from the Medicare levy, including blind pensioners and people entitled to full free medical treatment under defence force arrangements or Veterans’ Affairs Repatriations Health Card (Gold Card).
The thresholds depend on the circumstances of the individual (see Table 1 attached).
The increase in the Medicare levy low‑income thresholds is another example of the Turnbull Government guaranteeing the essentials that Australians rely on, made possible by a stronger economy.
Table 1: Increases to Medicare levy low-income thresholds
| 2016-17 thresholds | 2017-18 (new thresholds) | |||
| Low-income threshold (above which levy begins to phase-in) | Phase-in limit (above which full levy applies)* | Low-income threshold (above which levy begins to phase-in) | Phase-in limit (above which full levy applies)* | |
| Singles | $21,655 | $27,068 | $21,980 | $27,475 |
|---|---|---|---|---|
| Families (not eligible for the Seniors and Pensioners Tax Offset) | $36,541 (plus $3,356 for each dependent child) |
$45,676 (plus $4,195 for each dependent child) |
$37,089 (plus $3,406 for each dependent child) |
$46,361 (plus $4,257 for each dependent child) |
| Single seniors and pensioners eligible for Seniors and Pensioners Tax Offset | $34,244 | $42,805 | $34,758 | $43,447 |
| Families eligible for the Seniors and Pensioners Tax Offset | $47,670 (plus $3,356 for each dependent child) |
$59,587 (plus $4,195 for each dependent child) |
$48,385 (plus $3,406 for each dependent child) |
$60,481 (plus $4,257 for each dependent child) |
N.B. The Medicare levy phases in at 10 cents for each dollar in excess of the relevant low‑income threshold, until it is paid in full. This column shows the level of income above which the levy is paid in full.