House of Representatives

Tax and Superannuation Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2016

Second Reading Speech

Dr Hendy (Assistant Cabinet Secretary and Assistant Minister for Finance)

I move:

That this bill be now read a second time.

This bill amends the Medicare Levy Act 1986toincrease the Medicare levy low-income thresholds for singles, families and seniors and pensioners in line with increases in the consumer price index. These changes will ensure that low-income households who did not pay the Medicare levy in the 2014-15 income year will generally continue to be exempt in the 2015-16 income year if their incomes have risen in line with, or by less than, the consumer price index.

In addition to providing a concession to low-income households, the Medicare levy low-income thresholds ensure that people who pay no personal income tax due to their eligibility for structural offsets-such as the low-income tax offset or the seniors and pensioners tax offset-do not incur the Medicare levy.

The changes to the thresholds mean that no Medicare levy will be payable for individual taxpayers with income under $21,335 in 2015-16-that has increased from $20,896. 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 income is less than $33,738 (increased from $33,044).

Couples and families who are not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined income is less than $36,001 (increased from $35,261). Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined income is less than $46,966 (increased from $46,000). The thresholds for couples and families go up by $3,306 for each dependent child (increased from $3,238).

The increase in thresholds will apply to the 2015-16 year and future income years.

Full details of the measure in this bill are contained in the explanatory memorandum.

I commend the bill to the House.