HEALTH: Medicare levy

May 9, 2017

Most tax payers will soon pay higher tax after the government announced an increase in the Medicare Levy to help fund the $22 billion National Disability Insurance Scheme.

The levy is set to increase by 0.5 percentage points — from 2 to 2.5 per cent of taxable income from 1 July 2019.

Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased.

The levy will be reduced for some taxpayers. Income thresholds where the Medicare Levy kicks in will increase, so more people on low incomes will pay no Medicare Levy or a reduced level. These increased thresholds will apply for the current financial year onwards.

 

2015/16*

2016/17 (Proposed)

Singles

$21,335

$21,655

Family

$36,001 plus $3,306

$36,541 plus $3,356 per child

Single Pensioner

$33,738

$34,244

Family Pensioner

$46,966 plus $3,306

$47,670 plus $3,356 per child

*At the time of writing, the 2016/17 rates for Medicare Levy thresholds that would apply under existing legislation have not been announced.

 

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