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Questions and Answers
Match the following Medicare levy concepts with their correct descriptions:
Match the following Medicare levy concepts with their correct descriptions:
Medicare levy = 2% of taxable income for Australian resident taxpayers Medicare Levy Surcharge = Additional charge for high-income earners without private health insurance Seniors and Pensioners Tax Offset = Higher low-income threshold for seniors and pensioners Low-Income Thresholds = Income limits determining partial or full Medicare levy
Match the income thresholds with the corresponding groups:
Match the income thresholds with the corresponding groups:
Individual taxpayers = $24,276 for full Medicare levy Families = $40,939 plus $3,760 for each child SAPTO recipients = $38,365 for full Medicare levy Families eligible for SAPTO = $53,406 plus $3,760 for each child
Match the following exemption conditions with the corresponding categories:
Match the following exemption conditions with the corresponding categories:
Blind pension recipients = Exempt from Medicare levy Foreign residents = Exempt from Medicare levy Medicare exemption certificate holders = Not entitled to Medicare benefits Specific medical exemptions = Entitled to free medical care under certain circumstances
Match the following Medicare levy rates with their qualifying income levels:
Match the following Medicare levy rates with their qualifying income levels:
Match the following income figures with their corresponding tax status:
Match the following income figures with their corresponding tax status:
Match the following descriptions with the corresponding Medicare services or provisions:
Match the following descriptions with the corresponding Medicare services or provisions:
Match the following tax year with the corresponding Medicare levy period:
Match the following tax year with the corresponding Medicare levy period:
Match the following Medicare provisions with their applicable details:
Match the following Medicare provisions with their applicable details:
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Study Notes
Medicare Levy Overview
- Payable by all Australian resident taxpayers since 1 July 2014.
- Set at 2% of taxable income, increased from 1.5%.
- Legislation found in sections 251R and 251S of the Income Tax Assessment Act 1936 (ITAA 1936).
- Reductions or exemptions may apply for taxpayers below specific income thresholds.
Calculation and Resources
- Calculated by the Australian Tax Office (ATO) based on submitted tax return information.
- ATO provides an online Medicare levy calculator for estimating levy liabilities.
Current Low-Income Thresholds (2023-24)
- Individual taxpayers:
- Low-income threshold: $24,276.
- Income between $24,276 and $30,345 incurs a partial levy.
- Income above $30,345 incurs the full levy.
- Families:
- Low-income threshold: $40,939 plus $3,760 for each dependent child or student.
- Families above this threshold pay the full levy.
- Seniors and Pensioners Tax Offset (SAPTO) recipients:
- Higher threshold: $38,365.
- Income between $38,365 and $47,956 incurs a partial levy.
- Full levy for incomes above $47,956.
- Families with SAPTO:
- Full levy over combined income of $53,406 plus $3,760 for each dependent child or student.
Medicare Levy Exemptions
- Full or partial exemptions possible under certain conditions.
- Examples of exemptions:
- Individuals receiving a blind pension or sickness allowance from Centrelink.
- Foreign residents and Norfolk Island residents.
- Individuals without Medicare benefits holding a Medicare exemption certificate.
- Other medical exemptions for taxpayers entitled to free medical care in specific situations.
Medicare Levy Surcharge (MLS)
- Additional charge for high-income earners without private health insurance.
- Surcharge rates based on income:
- 1% for singles above $93,000 or families above $186,000.
- 1.25% for singles above $108,000 or families above $216,000.
- 1.5% for singles above $144,000 or families above $288,000.
- Thresholds increase by $1,500 for each dependent child beyond the first.
- If private health insurance is held for part of the year, the surcharge is prorated for non-covered periods.
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