28 January 2011
The Government has just announced an increase to the Medicare Levy threshold to help pay for the flood recovery process.
The devastation wrought by the recent flooding in Queensland has spurred many Australians in to action, donating time, money and other items to help people who have lost so much. With the bill set to top $5 billion, the Australian Government announced today that it will be introducing a Flood Levy to help pay for the recovery efforts. The flood levy will need to be passed by Parliament first, which resumes next week.
Starting from the July 1, Australians earning more than $50,000 a year will see an increase in their Medicare Levy. If you earn $50,000 per year, the flood levy will be 0.5% and if you earn more than $100,000 per year, the levy will be an additional 1%.
The flood levy will be collected via the Medicare Levy currently imposed on all Australian taxpayers. Pay As You Go (PAYG) installment taxpayers will have the levy charged in their installments.
Anyone who is below the income threshold or is in receipt of an Australian Government Disaster Recovery Payment for the recent floods will be exempt from paying the levy.
Employees who are exempt from the levy should ask their employer to not have the levy withheld from their regular pay with other tax withheld. Alternatively, at the end of the year the ATO will assess taxpayers' tax liability taking into account the exemption from the levy.
For detailed information about the Levy, visit the Prime Minister's website to read the full press release.
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