The Commonwealth Budget – Overview 2003-04

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Low income earners will benefit from a low income tax offset of $235 per year, an increase of $85. Senior Australians will also benefit from an increase in the Medicare levy threshold for senior Australians.

Assisting low income earners

The Government will assist low income earners by increasing the low income tax offset from $150 to $235 per year. The effect of this increase is that those eligible for the full low income tax offset will not pay tax until their annual income exceeds $7,382 per year. At present, they pay tax when their annual income exceeds $6,882.

In addition, the low income tax offset will not start to phase out until a taxpayer's annual income reaches $21,600. As a result of the changes to the low income tax offset, the income level up to which the offset can be claimed increases from $24,450 to $27,475. These taxpayers will also benefit from the increase in the 30 per cent income tax threshold.

Providing further benefits for senior Australians

The tax cuts also increase the benefits for senior Australians from that announced in the 2001-02 Budget. Senior Australians eligible for the Senior Australians Tax Offset will pay no tax on annual incomes up to $20,500 for singles compared with $20,000 currently and up to $33,612 for couples compared with $32,612 currently.

The Medicare levy threshold for senior Australians will be increased to ensure that senior Australians do not pay the Medicare levy until they begin to incur an income tax liability.