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  • Medicare levy reduction – family income

    If your taxable income is more than $27,475 ($43,447 for seniors and pensioners entitled to the seniors and pensioners tax offset) in 2017–18, you may still qualify for a Medicare levy reduction based on family taxable income if:

    • you had a spouse (married or de facto)
    • you had a spouse that died during the year, and you did not have another spouse before the end of the year
    • you are entitled to an Invalid and invalid carer tax offset in respect of your child
    • you had sole care of one or more dependent children.

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

    You are not considered to have sole care if you are living with a spouse (married or de facto) unless special circumstances exist, for example if a spouse is medically incapable of assisting you with the care.

    How do I calculate my 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 were between your preservation age and 59 years old, the amount of the taxed element of this (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.

    What is my family taxable income limit?

    In 2017–18 your Medicare levy is reduced if your family taxable income is equal to or less than $46,361 ($60,481 if you are entitled to the seniors and pensioners tax offset) plus $4,257 for each dependent child you have.

    Last modified: 29 Jun 2018QC 27032