Major Medicare overhaul: Australians will pay less with these new changes
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In a move that will bring relief to millions of Australians, the Albanese government has announced significant changes to the Medicare levy.
These changes, announced alongside stage three tax cuts, will allow many Australians to pay a lower Medicare levy or avoid the fee altogether.
This Medicare levy is separate from tax and is paid by Australians to support the nation's healthcare system.
The levy is completely waived for the lowest income earners, gradually phased in for the next income bracket, and applied to reflect two per cent of the earner's income for those who earn above a certain bracket.
The low-income threshold, which is the income level at which the two per cent Medicare levy applies, will increase by 7.1 per cent in line with inflation.
This translates to a saving of up to $172 per year for single Australians who now fall below the new threshold, according to the Australian Broadcasting Corporation (ABC).
Currently, single Australians who earn below $24,276 are exempt from paying a Medicare levy. However, under the proposed changes, this threshold will be increased to $26,000.
The levy is then phased in for Australians who earn above $24,276 but below $30,345, at which point the full two per cent levy applies.
The new changes will raise this $30,345 threshold to $32,500. This means those earning $30,345 or less will see a reduction in their levy.
For instance, someone who earns $30,000 would save $172.
The thresholds for single seniors, pensioners, and families are all increasing by 7.1 per cent, with the new limits set at $51,361 for single seniors and pensioners and $54,807 for families, up from $47,956 and $51,173, respectively.
These changes will save seniors up to $272.40 and an extra $344.10 for families with two children.
'This means 1.2 million low-income earners will either remain exempt from paying the levy or pay less in tax,' Prime Minister Anthony Albanese said in a statement on Wednesday.
The increase to the Medicare levy of low-income thresholds is expected to cost the government $640 million over four years from 2023 to 24.
Recently, another Medicare shake-up has been proposed that could lessen the burden of paying too much to take care of your oral health.
Medicare's potential expansion to include free dental care for all Australians is a monumental proposal that could redefine healthcare in the country.
However, this ambitious plan comes with a hefty price tag. Learn more about this proposal here.
Do you think these changes to the Medicare levy will make a significant difference to your budget? Share your thoughts in the comments below!
These changes, announced alongside stage three tax cuts, will allow many Australians to pay a lower Medicare levy or avoid the fee altogether.
This Medicare levy is separate from tax and is paid by Australians to support the nation's healthcare system.
The levy is completely waived for the lowest income earners, gradually phased in for the next income bracket, and applied to reflect two per cent of the earner's income for those who earn above a certain bracket.
The Albanese government announced that Australians can pay a lower Medicare levy. Credit: Services Australia
The low-income threshold, which is the income level at which the two per cent Medicare levy applies, will increase by 7.1 per cent in line with inflation.
This translates to a saving of up to $172 per year for single Australians who now fall below the new threshold, according to the Australian Broadcasting Corporation (ABC).
Currently, single Australians who earn below $24,276 are exempt from paying a Medicare levy. However, under the proposed changes, this threshold will be increased to $26,000.
The levy is then phased in for Australians who earn above $24,276 but below $30,345, at which point the full two per cent levy applies.
The new changes will raise this $30,345 threshold to $32,500. This means those earning $30,345 or less will see a reduction in their levy.
For instance, someone who earns $30,000 would save $172.
The thresholds for single seniors, pensioners, and families are all increasing by 7.1 per cent, with the new limits set at $51,361 for single seniors and pensioners and $54,807 for families, up from $47,956 and $51,173, respectively.
These changes will save seniors up to $272.40 and an extra $344.10 for families with two children.
'This means 1.2 million low-income earners will either remain exempt from paying the levy or pay less in tax,' Prime Minister Anthony Albanese said in a statement on Wednesday.
The increase to the Medicare levy of low-income thresholds is expected to cost the government $640 million over four years from 2023 to 24.
Recently, another Medicare shake-up has been proposed that could lessen the burden of paying too much to take care of your oral health.
Medicare's potential expansion to include free dental care for all Australians is a monumental proposal that could redefine healthcare in the country.
However, this ambitious plan comes with a hefty price tag. Learn more about this proposal here.
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