Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello MP)General outline and financial impact
Medicare levy and Medicare levy surcharge low income thresholds
This Bill amends:
- •
- the
Medicare Levy Act 1986
to:
- -
- increase the Medicare levy low income thresholds for individuals and families. The dependent child/student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index (CPI)
- -
- increase the Medicare levy low income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability
- •
- the
A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999
to:
- -
- increase the Medicare levy surcharge low income threshold in line with movements in the CPI.
Date of effect: The increased Medicare levy and Medicare levy surcharge low income thresholds apply from the 2004-05 year of income and later years of income.
Proposal announced: This measure was announced in the 2005-06 Budget. It was also announced in the Minister for Revenue and Assistant Treasurer's Press Release No. 028 of 10 May 2005.
Financial impact: This measure has a cost to revenue of $38 million in 2005-06, $19 million in 2006-07 and $18 million in both 2007-08 and 2008-09.
Compliance cost impact: Negligible.
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