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Re: Medicare levy reduction

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Question about Medicare levy threshold & calculation....

Married couple, living together, both eligible for SAPTO, no dependent kids. When working out Medicare levy, what threshold is used for the 2018 tax year & how is the levy calculated?

Taxable income for the 2018 year is approx $28k each.

- If using the individual threshold ($34,758) they are both under this - no Medicare levy payable.
- If using family income threshold ($48,385), combined income is approx $56k which is over the lower threshold - some Medicare should be payable (up to phase in limit $60,481).

When the tax return has been prepared in HandiTax, Medicare levy is calculated as $0, regardless of if 1 dependent is entered at item M1 to claim the reduction.

Should this not be based on combined family income in this situation and some Medicare should be calculated in the estimate? Or is it as simple as their individual taxable incomes are under $34,758 so no levy is payable?
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Hi @megs7787,

 

Welcome to our Community!

 

For the 2017–18 financial year, their Medicare levy may reduced if their combined family taxable income is equal to or less than $60,481 and they are entitled to the seniors and pensioners tax offset. Their family taxable income is their combined taxable income for the financial year.

 

When completing the tax returns, they need to complete the spouse details section and complete questions M1 for the Medicare levy reduction or exemption.

 

You can use our Medicare levy calculator on our website to help work out if they'll have to pay the Medicare levy. Alternatively, if you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

1 REPLY 1
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Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @megs7787,

 

Welcome to our Community!

 

For the 2017–18 financial year, their Medicare levy may reduced if their combined family taxable income is equal to or less than $60,481 and they are entitled to the seniors and pensioners tax offset. Their family taxable income is their combined taxable income for the financial year.

 

When completing the tax returns, they need to complete the spouse details section and complete questions M1 for the Medicare levy reduction or exemption.

 

You can use our Medicare levy calculator on our website to help work out if they'll have to pay the Medicare levy. Alternatively, if you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.