Podcast
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:
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Match the following income figures with their corresponding tax status:
Match the following income figures with their corresponding tax status:
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Match the following descriptions with the corresponding Medicare services or provisions:
Match the following descriptions with the corresponding Medicare services or provisions:
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Match the following tax year with the corresponding Medicare levy period:
Match the following tax year with the corresponding Medicare levy period:
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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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Description
This quiz covers the Medicare levy applicable to Australian resident taxpayers and the relevant sections of the Income Tax Assessment Act 1936. Learn about the changes in levy rates and conditions for exemptions or reductions based on taxable income thresholds. Test your understanding of how the Australian Tax Office calculates this levy.
