Dan Tehan (Wannon, Liberal Party, Minister Assisting the Prime Minister for Cyber Security) Share this | Hansard source

I thank those members who have contributed to this debate. The Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017 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 singles, families and seniors and pensioners in line with increases in the consumer price index. The bill provides certainty that low-income earners will continue to receive relief from the Medicare levy through the low-income thresholds. The bill demonstrates that the Medicare levy is already designed to ensure that vulnerable people in our community are in a position to receive relief from how the Medicare levy is imposed. This is a fair way to give the guarantee on Medicare, and it is a fair way to give the guarantee of fully funding the National Disability Insurance Scheme.

These changes will ensure that low-income households who do not pay the Medicare levy in the 2015-16 income year will generally continue to be exempt in the 2016-17 income year if their income has risen in line with or by less than the consumer price index. For individual taxpayers, no Medicare levy will be payable for those with income up to $21,655 in 2016-17. Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their income is up to $34,244 in 2016-17. Couples and families not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2016-17 if their combined income is up to $36,541 plus $3,356 for each dependent child or student. Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2016-17 if their combined income is up to $47,670 plus $3,356 for each dependent child or student. The Medicare levy phase is at 10c for each dollar in excess of the relevant low-income threshold until it is paid in full. Around an estimated one million individuals will benefit in 2016-17 from this bill from the increase in the low-income thresholds, including individuals who receive a concession as part of a family. The amendments to the Medicare levy low-income thresholds apply from the 2016-17 year of income.

I would also like to take the opportunity to correct the record in relation to two examples used in the second reading speech for this bill. The second reading speech stated that someone currently earning $80,000 pays $1,699 a year in Medicare levy. The actual amount is $1,600. The speech also stated that someone on a taxable income of $250,000 a year already pays $4,800 in Medicare levy. The actual taxable income is $240,000.

I trust that all members of this House not only will support this bill but also will respond positively to the forthcoming bill to help ensure the Commonwealth's National Disability Insurance Scheme contribution is fully funded. I commend this bill to the House.

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