The ATO article QC 27032 in relation to ''Medicare Levy Reduction - Family Income'' says that the reduction is calculated on the combined family taxable income.
My question is, if a person makes personal deductible super contributions, will these be added back to the taxable income for the purposes of the calculation?
(similar to the calculation done for Adjusted Taxable Income -ATI on which Medicare Levy Surcharge is calculated and lots of other dependant related tax offsets are calculated on)
Example:
John's income is $75,000 - he claim $10,000 concessional super contributions and his taxable income is reduced to $65,000 - his wife has no income and they have 5 kids.
Will the medicare levy reduction apply in this case?
My understanding is that the upper income treshhold is $51,174 - however he will get an extra $4,700 for each dependent child (bringing his treshhold up to 74,674).
If we use the taxable income, then he will be eligible for the reduction.
If we use Adjusted taxable income then he won't be as the reportable super contributions will be added back.
Any response on this matter will be greatly appreciated.
Thanks
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