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  • Medicare levy reduction – family income

    You may qualify for a Medicare levy reduction based on your family taxable income if both:

    • your taxable income was more than $29,206 ($46,156 for seniors and pensioners entitled to the seniors and pensioners tax offset (SAPTO)) in 2021–22
    • you either
      • had a spouse (married or de facto)
      • had a spouse that died during the year, and you did not have another spouse before the end of the year
      • are entitled to an invalid and invalid carer tax offset in respect of your child
      • had sole care of one or more dependant children.
       

    You can use the Medicare levy calculator to work out your Medicare levy payable.

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    Dependent children for Medicare levy reduction purposes

    For Medicare levy reduction purposes, a dependent child is any child:

    • you maintained who was an Australian resident, and
    • whose adjusted taxable income was less than the amounts in the table below.
    Dependent children – ATI thresholds

    Category of dependent child

    ATI if not maintained for the whole year

    ATI if maintained for the whole year

    Any child under 21 years old you maintained who was not a full time student

    For the first child:

    $282 plus $28.92 for each week you maintained them

    For each additional child:

    $282 plus $21.70 for each week you maintained them

    For the first child:

    $1,786

    For each additional child:

    $1,410

    Any full-time student aged under 25 years old at a school, college or university

    $282 plus $28.92 for each week you maintained them

    $1,786

    Family threshold for reduction

    For 2021–22, your Medicare levy is reduced if your family taxable income is equal to or more than $39,402 or equal to or less than $49,252 ($64,251 if you are entitled to the SAPTO) plus $4,523 for each dependent child you have.

    Calculate your family taxable income

    Family taxable income is:

    • the combined taxable income of you and your spouse (including a spouse who died during the year), or
    • your taxable income if you were a sole parent.

    If you received a superannuation lump sum payment when you reached your preservation age and were under 60 years old, the amount of the taxed element (not including the amount of any death benefit) that does not exceed your low-rate cap for the year is not included in your taxable income for Medicare levy purposes.

    Your low-rate cap is the cap amount that applies to that year less any superannuation lump sums you received in previous years.

    For more information, see Medicare levy reduction for low-income earners.

    Sole care definition

    Sole care means you alone had full responsibility for the upbringing, welfare and maintenance of a child or student.

    You aren't considered to have sole care if you are living with a spouse (married or de facto) unless there are special circumstances. For example, if a spouse is medically incapable of assisting you with the care.

    Last modified: 01 Jul 2022QC 27032