On 1 May 2013, the Government announced that it would increase the Medicare levy by half a percentage point from 1 July 2014 and that the revenue from this increase would be directed to a new fund, the DisabilityCare Australia Fund.
From 1 July 2014, the Medicare levy will increase from 1.5 per cent to 2 per cent of taxable income. A number of other tax rates that are linked to the Medicare levy will also increase.
Low income earners will continue to receive relief from the Medicare levy through the low income thresholds for singles, families, seniors and pensioners. The current exemptions from the Medicare levy will also remain in place, including for blind pensioners and sickness allowance recipients.
All revenue raised from increasing the Medicare levy will be paid into the DisabilityCare Australia Fund and will only be drawn down to make reimbursements to the Commonwealth and States and Territories for expenditure directly related to DisabilityCare Australia. The DisabilityCare Australia Fund will be managed by the Future Fund Board of Guardians.
Exposure draft legislation and explanatory material which would implement the announced changes has been released.
