Changes To The Medicare Levy

The most significant change that will impact individual taxpayers is the increase in the Medicare levy from 2 percent to 2.5 percent from 1 July 2019. This is forecast to deliver $8.2 billion of additional revenue for the Government that will help fund the National Disability Insurance Scheme.

The across the board increase in the Medicare levy could be viewed as a way for the Government to replace the loss of revenue from the Temporary Budget Repair Levy that ceases on June 30, 2017. However, unlike the Budget Repair Levy that only impacted individuals with a taxable income over $180,000, the Medicare levy is not means tested, except against the low-income thresholds. With the removal of the Temporary Budget Repair Levy from July 1, 2017, the effective top marginal tax rate for individuals for the year ending June 30, 2018 will be 47% including the 2% Medicare Levy (down from 49% for the year ended June 30, 2017).

Low income earners will continue to receive relief from the Medicare Levy and the 2016/17 thresholds are as follows:

2016/17 Threshold


  $21,655 (was $21,335)


  $36,541 + $3,356 for each dependent child or student

  Single Seniors & Pensioners

  $34,244 (was $33,738)

  Family Threshold - Seniors & Pensioners

  $47,670 + $3,356 for each dependent child or student

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Other Articles in This Edition:

Some of the Biggest Mistakes Small Businesses Make With Their Websites 
Federal Budget – Economic Summary
Small Business - $20k Small Business Immediate Tax Deduction
Small Business - Company Tax Rates
Small Business - Extension of Taxable Payments Reporting to Courier and Cleaning Industries
Small Business - Access to CGT Concessions
Small Business - Looking to Employ Foreign Workers?
Individual Tax Rates
Restricting Residential Investment Property Deductions
Individuals - Higher Education Reform  
Superannuation - Contributing Proceeds from Downsizing to Superannuation
Superannuation - First Home Super Saver Scheme
GST Changes - Purchasers to Pay GST on New Residential Premises
GST Changes - Digital Currency & Low-Value Imports
Tax Integrity Measures

DISCLAIMER: This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs.  The information provided is not a substitute for legal, tax and financial product advice.  Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances.  While the firm believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk.  The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.