The Medicare levy

Thresholds

Thresholds beyond which the Medicare levy is charged are different for:

people receiving the low income tax offset ($20,000)
people receiving the pensioner’s tax offset ($17,164 single)
other low income people ($15,062).

The thresholds also vary according to the number of dependants the taxpayer has.

There is a shading-in range above each threshold (a rate of 20% of income in excess of the threshold). Above this range, the levy is 1.5% on all income.

The high income earners’ surcharge

To encourage higher income earners to get private health insurance, there is an extra 1% charge on people who do not have it and whose taxable income is over a certain amount ($50,000 for single people, $100,000 for couples). The thresholds increase by $1500 for each dependent child after the first.

The surcharge operates in full as soon as the threshold is reached; there is no phasing in.

The value of fringe benefits received is now included in assessable income, making people whose income is otherwise below the threshold liable to the surcharge.