Australia: Consultation on proposal to exempt lump sums payments in arrears from medicare levy
Consultation on a proposed 2023–2024 Budget measure that would exempts eligible lump sum payments in arrears from medical levy
Consultation on proposal to exempt lump sums payments in arrears from medicare levy
The government launched a consultation on a proposed 2023–2024 Budget measure that would exempts eligible lump sum payments in arrears from the medicare levy from 1 July 2024.
According to the measure’s explanatory materials, it is intended to prevent low-income taxpayers from paying higher amounts of the medicare levy as a result of receiving an eligible lump sum payment (e.g., as compensation for underpaid wages).
According to Treasury, to qualify for relief, taxpayers must:
- Be eligible for a reduction in the medicare levy in the 2 most recent years, or income year, to which the lump sum accrues
- Satisfy the eligibility requirements of the existing lump sum payment in arrears tax offset, including that a lump sum accounts for at least 10% of the taxpayer’s income in the year of receipt
The consultation closes on 23 April 2024.
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