Medicare levy relief for low earners

The federal government will change Medicare levy thresholds to ensure low-income taxpayers remain exempt from paying.

The 2016/17 budget released on Tuesday says the threshold increase is expected to cost $280 million over four years.

The new thresholds are:

* $21,335 for singles

* $36,001 for childless couples, extra $3306 for each dependent child/student

* $33,738 for single seniors/pensioners

* $46,966 for childless senior/pensioner couples, extra $3306 for each dependent child/student

The government has made several changes to Medicare, stemming from the recommendations of its ongoing review of all 5700 items on the Medicare Benefits Schedule.

It says $5m will be saved by removing or updating items found to be out-of-date while other efficiencies will be achieved by consolidating and streamlining skin services and tests.

Instead, there'll be $3m to subsidise MRIs to detect breast cancers and $34m to list new Medicare items subsidising tests for 370,000 Australians at risk of diabetes-related eye diseases.

The budget shows $66m will be saved by using better data and analytics to detect fraud, abuse, waste and errors in Medicare claims.

There's also $21m for the previously-announced trial of Health Care Home - a plan to create tailored packages for those with chronic diseases to keep them healthier and avoid expensive hospital visits.