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Medicare Levy Amendment Bill 1990

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House: House of Representatives

Portfolio: Treasury


To implement the annual increase in the thresholds above which the Medicare levy is imposed.


The universal health insurance scheme known as Medicare was introduced in February 1984. The scheme provides coverage of 85% of the scheduled fee for medical services and free public hospital accommodation. Medicare is partly funded through a 1.25% levy on taxable income, though below a certain threshold level the levy is not payable.

Estimated collections from the Medicare levy in 1989-90 were $2545 million, $50 million lower than forecast in the 1988-89 Budget. This comprised $2125 million from PAYE taxpayers and $420 million from other individuals. 1 In 1990-91, Medicare levy collections are estimated to reach $2735 million, $2290 from PAYE taxpayers and $445 from other individuals. 2

Under the provisions of the Bill, the current 1.25% Medicare levy rate continues unchanged, however the thresholds at which the levy applies are increased by the Bill as follows:

(a) the threshold for a taxpayer without dependents is increased from $10 330 to $11 745;

(b) where an individuals taxable income is between $11 745 and $12 528, the amount of levy will be limited to 20% of the excess above $11 745;

(c) the threshold for people who have a spouse or dependents, will be increased from $17 400 to $19 045.

In the Second Reading Speech to the Bill, it is estimated that the cost of increasing the thresholds will be $35 million in 1990-91 and $80 million in 1991-92.

Main Provisions

Clause 4 sets the commencement date as the financial year commencing 1 July 1990.

The Schedule to the Bill sets out the threshold amounts.


1. Budget Statements 1990-91, Budget Paper No. 1, p. 4.20.

2. Ibid.

Bills Digest Service

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Commonwealth of Australia 1990

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Published by the Department of the Parliamentary Library, 1990.