Funding the services people with disability deserve
DisabilityCare Australia is the most fundamental social policy reform since Medicare.
Locking In A Fairer Future
The Government will provide DisabilityCare Australia with a strong and stable funding stream to provide certainty to people with disability, their families and carers. The Government will increase the Medicare levy by half a percentage point from 1.5 per cent to 2 per cent of taxable income from 1 July 2014, with this revenue to be dedicated to DisabilityCare Australia.
The increase in the Medicare levy will raise $3.3 billion in the first year and approximately $20.4 billion between 2014-15 and 2018-19 as DisabilityCare Australia is rolled out across the country.
Asking A Little To Achieve A Lot
This increase will mean a modest contribution of around a dollar a day for someone earning around average full-time wages of $70,000 a year. 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 defence personnel, blind pensioners and sickness allowance recipients.
Even after this change, Australians will still benefit from the Government's three rounds of tax cuts and the tripling of the tax free threshold - someone earning $70,000 a year will pay an extra 96 cents a day in Medicare levy, but still be paying $953 less tax a year than they were in 2007.
Disabilitycare Australia Fund
The money raised from the increase in the Medicare levy will be placed into the DisabilityCare Australia Fund for 10 years, to be spent funding the additional costs of DisabilityCare Australia.
A fixed amount of the money flowing into the Fund each year will be set aside for the States and Territories. This amount will be $825 million in 2014-15 (one quarter of the money estimated to be raised in that year). The annual amount allocated within the Fund will be grown in future years by 3.5 per cent per year. Over 10 years, the States and Territories will be allocated a total of $9.7 billion.
Tax cuts since 2007-08
| Taxable Income | Tax Cuts since 2007‑08 | Increase in Medicare Levy for single person |
Tax Cuts minus Increase in Medicare Levy |
|---|---|---|---|
| $20,000 | $1,619 | $0 | $1,619 |
| $30,000 | $1,053 | $150 | $903 |
| $40,000 | $2,103 | $200 | $1,903 |
| $50,000 | $2,053 | $250 | $1,803 |
| $60,000 | $1,653 | $300 | $1,353 |
| $70,000 | $1,303 | $350 | $953 |
| $80,000 | $1,553 | $400 | $1,153 |
| $90,000 | $1,853 | $450 | $1,403 |
| $100,000 | $2,153 | $500 | $1,653 |
| $150,000 | $3,653 | $750 | $2,903 |
| $200,000 | $6,053 | $1,000 | $5,053 |
Tax cuts since 2007-08 include changes in the low-income tax offset and the Medicare levy low income thresholds, for a single person.