House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

General outline and financial impact

Medicare levy and Medicare levy surcharge low-income thresholds

The Bill amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999 to increase:

•

the Medicare levy low-income thresholds for individuals and families (along with the dependent child/student component of the family threshold) in line with movements in the CPI;

•

the Medicare levy low-income thresholds for individuals and families eligible for the SAPTO (along with the dependent child/student component of the family threshold), in line with movements in the CPI; and

•

the Medicare levy surcharge low-income threshold in line with movements in the CPI.

Date of effect: This measure applies to the 2017-18 income year and later income years.

Proposal announced: This measure was announced in the 2018-19 Budget on 8 May 2018 as 'Personal income tax - increasing the Medicare levy low-income thresholds'.

Financial impact: This measure is estimated to have a cost to revenue of $230 million over the forward estimates period, consisting of:

- Nil

Human rights implications: This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - paragraphs 2.1 to 2.5.

Compliance cost impact: This measure will not have any ongoing compliance cost impact or additional impact on regulatory burden.