More than one million Australians on lower incomes will avoid paying the Medicare levy or continue to pay a lower rate, under a cost-of-living measure included in Treasurer Jim Chalmers' fourth Federal Budget.

The government will increase the Medicare levy low-income thresholds by 4.7 per cent for singles, families, seniors and pensioners. The government said it would apply from July 1, 2024.

Chalmers said the move would provide "extra tax relief for more than a million Australians", with the measure coming alongside other cost-of-living help like additional tax cuts for every Australian and another $150 energy rebate.

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The Medicare levy is 2 per cent of your taxable income and is paid in addition to the tax you pay on your taxable income.

Aussies may get a reduction from paying the Medicare levy, depending on their income, or they may not have to pay it at all.

The increase to the income thresholds means more people will be exempt or paying lower rates.

The measure will cost the budget $648 million over five years.

What are the new Medicare levy low-income thresholds?

The threshold for singles will be increased from $26,000 to $27,222.

The family threshold will be increased from $43,846 to $45,907.

For single seniors and pensioners, the threshold will be increased from $41,089 to $43,020.

The family threshold for seniors and pensioners will be increased from $57,198 to $59,886.

The family income thresholds will increase by $4,216 for each dependent child or student, up from $4,027.

What other Medicare and tax changes were in the budget?

The Federal Budget also promised to strengthen Medicare, investing $8.5 billion to lift bulk billing rates and make nine out of 10 GP visits free by 2030.

There was also a $644 million investment to add another 50 Medicare Urgent Care Clinics and build on the 87 already opened.

On the tax front, the budget included two new tax cuts for every Australian taxpayer.

From July 1, 2026, the 16 per cent tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15 per cent.