Your eligibility for a reduction of your Medicare levy is based on your and your spouse's taxable income and your circumstances.
Based on the information in your tax return, we will work out any reduction for you.
If you would like to understand more about how we calculate the levy reduction, please use the following information.
Work out your individual Medicare levy threshold
Using Table 2, work out the Medicare threshold that applies to you.
Category |
Lower threshold |
Upper threshold |
|---|---|---|
If you were entitled to the seniors and pensioners tax offset |
$36,056 |
$45,069 |
All other taxpayers |
$22,801 |
$28,501 |
If you have a spouse, you may not get the seniors and pensioners tax offset even if you meet all the eligibility conditions as the amount of the tax offset is based on your individual rebate income, not your combined rebate income. If you do not get the offset, merely being eligible for it will not entitle you to a Medicare levy reduction.
For this section, your taxable income excludes the taxed element of certain superannuation lump sums you received during 2019–20 if you had reached your preservation age and were under 60 years old (see Reduced taxable income to take account of certain superannuation lump sums).
Work out where your circumstances fit
Using Table 3, work out your circumstances and how they apply to the calculation of the levy.
Your circumstance |
What to do |
|---|---|
Your taxable income is equal to or less than your lower threshold amount. |
You do not have to pay the Medicare levy. |
Your taxable income is greater than your lower threshold amount and less than or equal to your upper threshold amount, and you are single with no dependants. |
You pay only part of the Medicare levy. We will work it out. Go to Medicare levy exemption to see if you qualify for an exemption. |
Your taxable income is over your upper threshold amount, and you are single with no dependants. |
You do not qualify for a reduction. Go to Medicare levy exemption to see if you qualify for an exemption. |
Your taxable income is greater than your lower threshold amount but you:
|
You may be eligible for a Medicare levy reduction based on family taxable income.
|
Family taxable income
Family taxable income is:
- the combined taxable incomes of you and your spouse (including a spouse who died during 2019–20), or
- your taxable income if you were a sole parent.
Row |
Calculation |
Amount |
|---|---|---|
a |
Your taxable income from Taxable income. |
$ |
b |
Any relevant amounts of superannuation lump sums that you received (see Reduced taxable income to take account of certain superannuation lump sums). |
|
c |
Take row b away from a. If the amount is less than $0, write $0. |
|
d |
Your spouse's taxable income from Taxable income on their tax return (if applicable). |
$ |
e |
Any relevant amounts of superannuation lump sums that your spouse received (see Reduced taxable income to take account of certain superannuation lump sums). |
|
f |
Take row e away from d. If the amount is less than $0, write $0. |
$ |
g |
Add rows c and f. This is your family taxable income. |
$ |
Working out your family taxable income limit
Your Medicare levy is reduced if your family taxable income is equal to or less than the following limits.
Row |
Calculation |
Amount |
|---|---|---|
h |
If you were entitled to the seniors and pensioners tax offset, enter $62,738. For all other taxpayers, enter $48,092. |
$ |
i |
Number of dependent children (if applicable, see note). |
|
j |
Multiply row i by $4,416 (see note). |
$ |
k |
Family taxable income limit. Add the appropriate amount from row h to the amount at row j. |
$ |
Note: If you are a sole parent, you can increase your family taxable income limit for a dependent child only if the family tax benefit is payable to you for that dependent child.
If your family taxable income at row g in Worksheet 1 is equal to or less than your family taxable income limit at row k in Worksheet 2, you are entitled to a reduction.