Turnbull gov't exempts nine million Australians from expanded Medicare levy

Australia's Immigration Minister Scott Morrison smiles during an interview with Reuters in Phnom Penh September 26, 2014. Reuters/Samrang Pring

Over nine million Aussie adults are exempted from the expanded Medicare Levy as the Turnbull government extends protection for people with low income. Treasurer Scott Morrison introduced a bill on Wednesday that would ensure that the levy will be waived for individuals whose annual incomes are $21,655, families earning an amount of $36,541 or retired couples qualified for seniors’ tax offset earning up to $47,670 annually.

Morrison presented the carve-outs in parliament, slamming Bill Shorten for hindering an $8.2 billion tax hike that assists the disabled. There were previous reports that the opposition leader tried to amend the increase in the Medicare Levy.

The bill will also expand the “phase-in” rules at a concessional rate for millions of employees. Access to this benefit is likely to depend on whether they have children. For instance, a family with two children and a taxable income of up to $43,253 is not required to pay the levy. The previous threshold was $42,613.

Morrison recognised that the Medicare Levy has built-in carve-outs for those receiving low income as well as for vulnerable Aussies. “That was respected as a principle by all of the Leader of the opposition’s predecessors who led the Labor Party, and it’s a principle that is now being abandoned by the Leader of the opposition in the name of cheap politics,” he added as per The Australian.

The Treasurer seeks changes to the plan to fund the National Disability Insurance Scheme through a 2.5 percent Medicare Levy. He clarified the higher rate must only apply to Australians who take home more than $87,000 a year.

He said the argument opposed decades of practice when increases in the levy have been applied to all. The time when Shorten and Julia Gillard backed a 0.5 percent increase for the funding of the disability scheme four years ago when Labor was in power was cited.

Morrison commended the Gillard government for its introduction of the scheme as he invited the Leader of the Opposition to support the government’s middle ground proposal. He said it is the right thing for disabled Australians and their families.

“Every Australian will benefit from the scheme and so every Australian who has a reasonable capacity to contribute can do so through the levy,” Social Services Minister Christian Porter said. A worker whose income is $28,000 a year is expected to pay another $75 a yearm but one who earns $200,000 would pay an extra $1000, he noted.

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