House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and 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; and

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the Clean Energy (Tax Laws Amendments) Act 2011 to:

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reflect minor consequential amendments.

Date of effect: The increased Medicare levy and Medicare levy surcharge low-income thresholds apply for the 2011-12 income year. The increased thresholds, which reflect changes in the consumer price index, ensure that relevant taxpayers do not incur a liability to the Medicare levy or Medicare levy surcharge. There are no adverse effects on taxpayers.

Proposal announced: This measure was announced in the 2012-13 Budget.

Financial impact: This measure will have these revenue implications:

Human rights implications: This Bill does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 1, paragraphs 1.24 to 1.27.

Compliance cost impact: Negligible. Chapter 1 Chapter 1