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); and
- -
- 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 2003-2004 year of income and later years of income.
Proposal announced: This measure was announced in the 2004-2005 Budget. It was also announced in the Minister for Revenue and Assistant Treasurer's Press Release No. C033/04 of 11 May 2004.
Financial impact: This measure has a cost to revenue of $41 million in 2004-2005 and $21 million each year in the period from 2005-2006 to 2007-2008.
Compliance cost impact: Compliance costs will be negligible.