1. Press Ctrl-A ©G Dear 2009 – Not to be sold/Free to use Medicare Stage 6 - Year 11 General Mathematics Preliminary

2. 2 Medicare Levy (1/5) The Medicare levy is a payment made as part of our tax that pays for basic health care services. The Medicare levy is 1.5% of taxable income. Allowances are made for people on low incomes who do not have to pay the levy or pay it at a reduced rate.

3. 3 Medicare Levy (2/5) Medicare levy $75 000 Calculate the Medicare levy for a person with an annual taxable income of $75 000. Medicare Levy = 1.5% 1.5 100 0.015 x $75 000 = $1 125

4. 4 Medicare Rebate (3/5) The government provides a 30% rebate (refund) on the cost of the private health insurance. This is to encourage people to take up private health cover

5. 5 Medicare Surcharge (4/5) People on higher incomes who do not have private health insurance are charged the Medicare levy surcharge. This surcharge is a further 1% of taxable income. This may vary with the number of children. Threshold = $75,000 +$0 +$1500

6. 6 1 100 Medicare Surcharge (5/5) Medicare levy surcharge $175 000 Calculate the total Medicare levy, including surcharge, paid by a person having one child, no private health insurance and a taxable income of $175 000 per annum. Medicare Levy Medicare Levy = 1.5% 1.5 100 0.015 x $175 000 = $2 625 Surcharge Surcharge = 1%0.01 x $175 000 = $1 750 Total Levy Total Levy = $2 625 + $1 750 = $4 375