Medicare levy increase to fund DisabilityCare Australia

The Bills to implement the government’s proposed increase in the Medicare levy from 1.5% to 2% of taxable income from 1 July 2014 were introduced on 15 May 2013. They passed all stages without amendment and received Royal Assent on 28 May 2013. On 1 May 2013, the Prime Minister had announced that the government will increase the Medicare levy by 0.5% from 1 July 2014 to help fund its National Disability Insurance Scheme (NDIS), renamed DisabilityCare Australia. The announcement was confirmed in the 2013–2014 Federal Budget. While increasing the Medicare levy, the Bills also have flow-on effects for other taxes such as family trust distribution tax, trustee beneficiary non-disclosure tax, fringe benefits tax (FBT) and the rate of tax payable by trustees of complying and non-complying superannuation funds.

The Bills are:

• Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 – Act No 43 of 2013. The Bill amends the Medicare Levy Act 1986 to increase the Medicare levy rate from 1.5% to 2% of taxable income for the 2014–2015 income year and later income years. Increasing the Medicare levy also required a number of consequential amendments to other tax rates that are linked to the top marginal rate and the Medicare levy. This includes changes to FBT, excess superannuation contributions tax, and the tax withheld on bank accounts when the account holder has not provided their TFN, and these are reflected in the following Bills.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/billhome/‌r5039%22.)

• Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013 – Act No 39 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/billhome/‌r5051%22.)

• Income Tax Rates Amendment (DisabilityCare Australia) Bill 2013 – Act No 41 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5050%22.)

• Superannuation (Excess Concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 – Act No 47 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5044%22.)

• Superannuation (Excess Non-concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 – Act No 46 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5049%22.)

• Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 – Act No 45 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5047%22.)

• Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare Australia) Bill 2013 – Act No 42 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5048%22.)

• Income Tax (First Home Saver Accounts Misuse Tax) Amendment (DisabilityCare Australia) Bill 2013 – Act No 40 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/billhome/‌r5046%22.)

• Family Trust Distribution Tax (Primary Liability) Amendment (DisabilityCare Australia) Bill 2013 – Act No 38 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5045%22.)

• Taxation (Trustee Beneficiary Non-disclosure Tax) (No 1) Amendment (DisabilityCare Australia) Bill 2013 – Act No 48 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5038%22.)

• Taxation (Trustee Beneficiary Non-disclosure Tax) (No 2) Amendment (DisabilityCare Australia) Bill 2013 – Act No 49 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2F‌billhome%2Fr5037%22.)

• DisabilityCare Australia Fund Bill 2013 – Act No 37 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/billhome/‌r5053%22.)

• National Disability Insurance Scheme Legislation Amendment Bill 2013 – Act No 44 of 2013.  (Source: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/billhome/‌r5054%22.)