Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008

Administered by Department of the Treasury

Legislation au C2008A00110 In force Act

Legislation content

 

 

 

 

 

 

Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008

 

No. 110, 2008

 

 

 

 

 

An Act to amend the law relating to taxation, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

4 Review of operation of Act

Schedule 1—Singles and families income thresholds

Part 1—Amendments

A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999

Medicare Levy Act 1986

Part 2—Application

 

 

 

Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008

No. 110, 2008

 

 

 

An Act to amend the law relating to taxation, and for related purposes

[Assented to 31 October 2008]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008.

2  Commencement

  This Act commences on the day on which it receives the Royal Assent.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

4  Review of operation of Act

 (1) The Minister for Health and Ageing must cause an independent review of the operation of this Act to be undertaken as soon as possible after each anniversary of the commencement of this Act, for a period of three consecutive years.

 (2) The review is to consider and report on the impact on public hospitals of the amendments made by this Act, including the number of episodes of care, the impact on operating costs and the impact on elective surgery waiting lists.

 (3) The person undertaking the review must give the Minister a written report of the review, and the Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of receiving the report.


Schedule 1—Singles and families income thresholds

Part 1—Amendments

A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999

1  Subsection 3(1)

Insert:

singles surcharge threshold for a person for a year of income has the meaning given by section 5A.

2  After section 5

Insert:

5A  What is the singles surcharge threshold?

 (1) The singles surcharge threshold for a person for the 2008‑09 year of income is $70,000. This amount is indexed annually.

Indexation of singles surcharge threshold

 (2) The amount of the singles surcharge threshold is indexed annually by:

 (a) multiplying the singles surcharge threshold for the 2008‑09 year of income by its indexation factor; and

 (b) rounding the result in paragraph (a) down to the nearest multiple of $1,000.

 (3) The singles surcharge threshold is not indexed if its indexation factor is 1 or less.

 (4) The indexation factor is:

 (5) The indexation factor mentioned in subsection (4) is calculated to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

 (6) The index number for a quarter is the estimate of full‑time adult average weekly ordinary time earnings for the middle month of the quarter first published by the Australian Statistician for that month.

3  Subsection 6(1)

Omit “$100,000”, substitute “an amount equal to double the singles surcharge threshold for the year of income”.

4  Subsection 6(2)

Repeal the subsection, substitute:

 (2) However, if the person has 2 or more dependants who are children, the family surcharge threshold for the person for the year of income is the sum of:

 (a) an amount equal to double the singles surcharge threshold for the year of income; and

 (b) the result of the following formula:

Example: If a person has 3 dependants who are children, the family surcharge threshold for the 2008‑09 year of income is:

5  Paragraph 12(1)(a)

Omit “$50,000”, substitute “the singles surcharge threshold for the year of income”.

Medicare Levy Act 1986

6  Subsection 3(1)

Insert:

singles surcharge threshold for a person for a year of income has the meaning given by section 3AA.

7  After section 3

Insert:

3AA  Meaning of singles surcharge threshold

 (1) The singles surcharge threshold for a person for the 2008‑09 year of income is $70,000. This amount is indexed annually.

Indexation of singles surcharge threshold

 (2) The amount of the singles surcharge threshold is indexed annually by:

 (a) multiplying the singles surcharge threshold for the 2008‑09 year of income by its indexation factor; and

 (b) rounding the result in paragraph (a) down to the nearest multiple of $1,000.

 (3) The singles surcharge threshold is not indexed if its indexation factor is 1 or less.

 (4) The indexation factor is:

 (5) The indexation factor mentioned in subsection (4) is calculated to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

 (6) The index number for a quarter is the estimate of full‑time adult average weekly ordinary time earnings for the middle month of the quarter first published by the Australian Statistician for that month.

8  Section 3A

Repeal the section, substitute:

3A  Meaning of family surcharge threshold

 (1) In sections 8C, 8D, 8F and 8G, the family surcharge threshold for a year of income is an amount equal to double the singles surcharge threshold for the year of income.

 (2) However, if the person has 2 or more dependants who are children, the family surcharge threshold for the person for the year of income is the sum of:

 (a) an amount equal to double the singles surcharge threshold for the year of income; and

 (b) the result of the following formula:

Example: If a person has 3 dependants who are children, the family surcharge threshold for the 2008‑09 year of income is:

9  Subsection 8B(2)

Omit “$50,000”, substitute “the singles surcharge threshold for the year of income”.

10  Subsection 8E(2)

Omit “$50,000”, substitute “the singles surcharge threshold for the year of income”.


Part 2—Application

11  Application

The amendments made by this Schedule apply to assessments for the 2008‑09 year of income and later years of income.

12  Transitional

(1) In this item:

new Act means the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999, and the Medicare Levy Act 1986, as amended by this Schedule.

(2) For the purposes of the new Acts, if:

 (a) a person is covered by an insurance policy that provides private patient hospital cover; and

 (b) the person is covered by that policy:

 (i) during any part of the period starting on 1 July 2008 and ending on 31 December 2008 (the designated period); and

 (ii) on 1 January 2009;

the person is taken to be covered by that policy during the whole of the designated period.

Note: For this purpose, a person includes a dependant of another person.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 25 September 2008

Senate on 14 October 2008]

(203/08)

 

Overview

The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008 was enacted by the Parliament of Australia to amend the law relating to taxation, specifically addressing the income thresholds for the Medicare Levy Surcharge. The Act was designed to respond to concerns about the rising costs of public hospitals and the impact of the Medicare Levy Surcharge on healthcare funding. The policy objective, as indicated in the Act, is to ensure that the threshold for the surcharge is regularly reviewed and adjusted to reflect changes in income levels, thus maintaining the balance between healthcare funding and taxpayer contributions. This Act mandates an independent review of its operation every year for three years following its commencement, focusing on the impact on public hospitals, including episode of care numbers, operating costs, and elective surgery waiting lists. The Act introduces amendments to the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 and the Medicare Levy Act 1986, setting new income thresholds for the Medicare Levy Surcharge and providing for their annual indexation. The singles surcharge threshold for the 2008-09 year of income was set at $70,000 and is indexed annually. The family surcharge threshold is calculated based on the singles surcharge threshold, with additional considerations for families with multiple child dependants. These amendments apply to assessments for the 2008-09 year of income and subsequent years.

Scope and Application

The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008 is an Act of the Australian Parliament designed to amend the law relating to taxation, specifically concerning the Medicare Levy Surcharge thresholds. The Act was enacted to adjust the income thresholds that determine eligibility for the Medicare Levy Surcharge, which is an additional tax on individuals and families who do not hold an appropriate level of private health insurance and earn above a specified income threshold. The Act applies to both the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 and the Medicare Levy Act 1986, making amendments to these Acts to reflect the new thresholds. The changes apply to assessments for the 2008-09 year of income and subsequent years. For the transitional period from 1 July 2008 to 31 December 2008, individuals covered by a private patient hospital insurance policy during any part of this period and on 1 January 2009 are considered to be covered for the entire transitional period. The Act does not explicitly state exclusions or exemptions, but the application of the surcharge thresholds is contingent upon an individual's income and health insurance status.

Key Provisions

The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008 (the Act) introduces amendments to the income thresholds for the Medicare Levy Surcharge (MLS) for both singles and families. The Act specifically amends the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 and the Medicare Levy Act 1986. The main operative sections of the Act, found in Schedule 1, Part 1, establish new income thresholds for the MLS and outline the indexation process for these thresholds. The singles surcharge threshold for the 2008-09 year of income is set at $70,000 and is indexed annually (sections 3(1) and 6(1)). The family surcharge threshold is defined as double the singles surcharge threshold, with additional provisions for families with two or more child dependants (sections 5A(4) and 8A(2)). The Act imposes obligations on individuals and families to ensure compliance with the new MLS thresholds. Individuals must accurately report their income for tax purposes and ensure that their income does not exceed the prescribed MLS thresholds. Families must also consider the number of child dependants they have, as this affects their family surcharge threshold (sections 5A(4) and 8A(2)). The Act requires that these thresholds be applied to assessments for the 2008-09 year of income and subsequent years (section 11). Breach of the MLS provisions can result in financial penalties. Specifically, individuals who are eligible for private hospital cover but fail to obtain it may incur a surcharge. The surcharge is calculated as 1.5% of the individual’s taxable income for each month they were not covered, up to a maximum of 75% of the MLS (section 8C). Failure to comply with the MLS requirements can lead to civil penalties, including fines and interest on unpaid amounts (section 8G). The Act also mandates an independent review of its operation, focusing on the impact on public hospitals, to be conducted annually for three years following the Act's commencement (section 4).

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Definitions & Interpretation
Indexation
Reporting & Disclosure Obligations
Transitional Provisions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.