Gazette notice: Commissioner of Taxation – Notice of an amendment to the 9 June income protection insurance (IPI) data-matching program, superseded by this 7 July 2023 notice
The Australian Taxation Office (ATO) will acquire income protection insurance policy data from insurers for 2021–22 to 2025–26.
The data items include:
■ policy owner details (names, addresses, phone numbers, dates of birth, account name, BSB, account number etc.)
■ policy details (policy name, year, policy type, policy brand, start/end dates, premiums, payouts etc.)
■ insured person details (names, addresses, phone numbers, dates of birth, account name, BSB, account number etc.).
We estimate that records relating to approximately 800,000 individuals will be obtained each financial year.
The objectives of this program are to:
■ help ensure that individuals and businesses are fulfilling their tax and superannuation reporting obligations. These obligations may include registration, lodgment, reporting and payment responsibilities
■ identify and educate individuals and businesses who may be failing to meet their registration or lodgment obligations and help them
– lodge their income tax returns
– correctly report assessable income from an IPI claim at label 1 – Salary and Wages or label 24 – Other income in their individual income tax return
– correctly report deductible premiums paid towards an IPI policy at label D15 – Other deductions in their individual income tax return.
■ gain insights to help develop and implement strategies to improve voluntary compliance. This may include educational or compliance activities for individuals and businesses who own, or are insured by an IPI policy.
■ promote voluntary compliance and increase community confidence in the integrity of the tax and superannuation systems.
A document describing this program is available at ato.gov.au/dmprotocols.
This program follows the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) (the guidelines). The guidelines include standards for the use of data matching as an administrative tool in a way that:
■ complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act)
■ is consistent with good privacy practice.
A full copy of the ATO’s privacy policy can be accessed at ato.gov.au/privacy.
Overview
The Australian Taxation Office (ATO) introduced an amendment to the income protection insurance (IPI) data-matching program, published in the Gazette on 7 July 2023. This program, which supersedes the previous notice dated 9 June, is designed to collect IPI policy data from insurers for the financial years 2021-22 to 2025-26. This initiative aims to assist individuals and businesses in meeting their tax and superannuation reporting obligations, focusing on registration, lodgment, reporting, and payment responsibilities. The program also seeks to identify and educate those failing to comply with their obligations, ensuring correct reporting of assessable income and deductible premiums in their tax returns. Furthermore, it aims to enhance voluntary compliance, develop strategies to improve reporting, and promote community confidence in the tax and superannuation systems. This data-matching program adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988.
Scope and Application
The Commissioner of Taxation, under the amended income protection insurance (IPI) data-matching program, targets individuals and businesses that hold IPI policies, ensuring compliance with tax and superannuation reporting obligations. This data-matching initiative applies to a broad range of participants within the Australian economy, specifically those who own or are insured by IPI policies, and encompasses personal and policy-related data collected from insurers. The program’s geographic reach is national, applying across Australia, and it extends to data from the 2021–22 to 2025–26 financial years. The ATO’s acquisition of IPI policy data aims to enhance compliance by identifying and educating participants about their obligations, such as correctly reporting assessable income and deductible premiums, and it follows the guidelines set by the Office of the Australian Information Commissioner to ensure adherence to privacy standards under the Privacy Act 1988. The program does not specify exclusions or thresholds within the notice, but it is designed to operate within the legislative framework provided by the Australian Taxation Office and the Privacy Act.
Key Provisions
The primary operative sections of the notice (C2023G00769) detail the Australian Taxation Office's (ATO) acquisition of income protection insurance policy data from insurers for the period of 2021–22 to 2025–26 (section 1). This data includes personal information about policy owners and insured persons, as well as detailed policy information (section 2). The notice aims to ensure that individuals and businesses meet their tax and superannuation reporting obligations, including registration, lodgment, reporting, and payment responsibilities (section 3). Additionally, it seeks to identify and assist those who may be failing to meet these obligations, and to educate them on correctly reporting assessable income from an IPI claim and deductible premiums in their tax returns (section 4). The ATO also intends to use the data to develop strategies to improve voluntary compliance and promote community confidence in the tax and superannuation systems (section 5).
The Act imposes several obligations on the parties involved. Insurers are required to provide the specified data to the ATO, ensuring that this data includes comprehensive details about policy owners, insured persons, and policy specifics (section 6). The ATO, in turn, is obligated to use this data strictly for the purposes outlined in the notice, including helping individuals and businesses meet their tax and superannuation obligations, and developing strategies to improve compliance (section 7). Both parties must adhere to the Office of the Australian Information Commissioner’s Guidelines on data matching, ensuring compliance with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (section 8). This includes maintaining data security and confidentiality in accordance with the ATO's privacy policy (section 9).
Breaches of the obligations and requirements outlined in the Act can lead to various consequences. For instance, insurers failing to provide the required data may face penalties, including fines, as the Act specifies the importance of accurate and complete data for tax compliance purposes (section 10). Individuals and businesses who do not meet their tax and superannuation reporting obligations, or who fail to correctly report assessable income and deductible premiums, may also face penalties (section 11). The specific penalties for tax-related offences can vary, but generally include fines that can be substantial, reflecting the seriousness of non-compliance (section 12). Additionally, repeated or deliberate non-compliance may result in more severe consequences, including criminal charges, which could lead to imprisonment (section 13). The ATO’s privacy policy outlines further potential consequences for mishandling personal data, emphasizing the importance of adhering to privacy standards (section 14).