House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon Wayne Swan MP)

General outline and financial impact

Medicare levy and Medicare levy surcharge low-income thresholds

This Bill amends:

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the Medicare Levy Act 1986 to:

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increase the Medicare levy low-income thresholds for individuals and families. The dependent child/student component of the family threshold will also be increased. These increases are in line with movements in the consumer price index; and

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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; and

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the A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 to:

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increase the Medicare levy surcharge low-income threshold in line with movements in the consumer price index.

Date of effect: The increased Medicare levy and Medicare levy surcharge low-income thresholds apply from the 2009-10 income year and later income years.

Proposal announced: This measure was announced by the Treasurer in the 2010-11 Budget.

Financial impact: This measure will have these revenue implications:

Compliance cost impact: Negligible.