Tax Return:: 2023FY Medicare Low-Income Thresholds

Hello, this is your tax accountant, P&C Tax Professionals.

In this blog post, we will take a look at the new Medicare low-income thresholds that have recently been updated. But before that, let’s start off with the two ways you could be exempt from paying the Medicare levy on your tax return.

Medicare Levy Exemption/Reduction

There are two primary methods that will help you to avoid paying the Medicare levy:

1. You are classified as a low-income earner

Certain individuals with a low income are exempt from paying the levy or may qualify for a reduced Medicare levy rate.

2. You have a Medicare Entitlement Statement for the relevant financial year.

Services Australia (formerly the Department of Human Services) issues the Medicare Entitlement Statement (MES) to individuals whose visa type does not allow them to receive Medicare benefits. Possessing this statement enables you to exempt yourself from paying the Medicare levy.

We will now update you on the changes that have been made to the Medicare low-income thresholds for the 2023 financial year (1 July 2022 – 30 June 2023).

New Medicare Low-Income Thresholds for the 2022-23 Financial Year

If your taxable income falls below a specific threshold, the Medicare levy amount you are required to pay is reduced. In certain instances, it is possible for you to be completely exempt from paying the levy.

In the 2022-23 income year, the following adjustments will be made to the Medicare levy low-income thresholds (figures shown in brackets are for the 2021-22 income year):

For singles:

> The threshold will increase to $24,276 (up from $23,365)

For couples without children:

> The family income threshold will increase to $40,939 (up from $39,402)

> The family income threshold for each dependent child or student will increase by $3,760 (up from $3,619) per additional child after your first child.

Seniors and pensioners eligible for the seniors and pensioners tax offset (SAPTO):

> Single seniors and pensioners eligible for the SAPTO will have their Medicare levy low-income threshold increased to $38,365 (up from $36,925)

> The family threshold for seniors and pensioners will be increased to $53,406 (up from $51,401)

This means that if your taxable income is equal to or less than the specified Medicare low-income threshold, you do not have to pay for the Medicare levy on your tax return.

For anyone who needs assistance lodging their tax returns, business activity statements, Departing Australia Superannuation Payment or need help applying for their Medicare Entitlement Statement, please feel free to contact us by sending us your enquiry to our email address: pnctax@naver.com or through our official Facebook Page (P&C Tax Professionals – Australia).

Thank you and bye for now!