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Technical update: Medicare levy income threshold indexation (Xiake v3)
1 June 2023
Release overview
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Technical update
The Medicare levy income thresholds for 2022/23 and later years have been recently proposed in the Treasury Laws Amendment (2023 Measures No. 2) Bill 2023, alongside the government’s 2023/24 Budget announcement. As usual, these are to be indexed by CPI. Accordingly, we have updated our Technical database with these figures, which will also be indexed by our forecasted CPI for future years.
While we generally do legislative updates to Pathfinder only once a bill attains Royal Assent, the Medicare levy income thresholds (and other similarly indexed thresholds) are non-controversial and unlikely to change during the bill process, so we update these once their bill is introduced.
2022/23 Medicare levy income thresholds
Thresholds
The individual income threshold is $24,276 (previously $23,365).
The family income threshold is $40,939 (previously $39,402).
The income threshold for individual taxpayers eligible for the SAPTO is $38,365 (previously $36,925).
The income threshold for families eligible for the SAPTO is $53,406 (previously $51,401).
The child-student component of the income threshold for families (whether eligible for SAPTO or not) is $3,760 (previously $3,619).
Phase-in limits
The individual phase-in limit is $30,345 (previously $29,206).
The phase-in limit for individual taxpayers eligible for the SAPTO is $47,956 (previously $46,156).
The phase-in limit for families is $51,173 (previously $49,252).
The phase-in limit for families eligible for the SAPTO is $66,757 (previously $64,251).
The child-student component of the phase-in limit for families (whether eligible for SAPTO or not) is $4,700 (previously $4,523).
Budget changes
There are 2 main budget changes that affect Pathfinder:
End of the reduced minimum pension drawdown rate: From 1 July 2023, the temporarily halved minimum account-based pension drawdown rates is confirmed to revert to normal. As this is in accordance with the previous year’s budget, this has already been implemented in Pathfinder.
Higher tax on balances of $3 million or more: From 1 July 2025, individuals with total super balances of $3 million or more will have some portion of the earnings in excess of that amount taxed each year at a rate of 30%, up from 15%. We are currently keeping an eye out on any updates for this, and will update Pathfinder once this becomes law.