Gazette notice: Commissioner of Taxation – Notice of an income protection insurance (IPL) data-matching program 9 June 2023
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 1.9 million 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 Commissioner of Taxation Notice of an income protection insurance (IPL) data-matching program 2023, published in the Commonwealth of Australia Gazette on 9 June 2023, was enacted to address the need for accurate tax and superannuation reporting by individuals and businesses. The Australian Taxation Office (ATO) intends to obtain income protection insurance policy data from insurers for the financial years 2021–22 to 2025–26 to help ensure that taxpayers and businesses are meeting their reporting obligations. This program aims to promote voluntary compliance, provide educational support to those failing to meet their obligations, and enhance community confidence in the integrity of the tax and superannuation systems. By adhering to the Office of the Australian Information Commissioner’s Guidelines on data matching in Australian Government administration (2014) and the Australian Privacy Principles, the ATO aims to use this data responsibly while protecting the privacy of individuals.
Scope and Application
The Commissioner of Taxation Notice, Gazette C2023G00631, outlines the Australian Taxation Office's (ATO) intention to acquire income protection insurance (IPI) policy data from insurers for the financial years 2021–22 to 2025–26. This initiative is targeted at both individuals and businesses, specifically focusing on ensuring they meet their tax and superannuation reporting obligations. The data to be collected includes detailed information about policy owners, policy specifics, and insured persons. This data-matching program is designed to assist individuals and businesses in lodging their income tax returns accurately, particularly in reporting assessable income from IPI claims and deductible premiums at the appropriate labels in their tax returns. The ATO aims to enhance voluntary compliance through this initiative, thereby promoting community confidence in the integrity of the tax and superannuation systems. The program adheres to the Office of the Australian Information Commissioner’s Guidelines on data matching and complies with the Australian Privacy Principles and the Privacy Act 1988.
Key Provisions
The primary sections of the legislation (C2023G00631) mandate the acquisition and use of income protection insurance policy data by the Australian Taxation Office (ATO) for the financial years 2021–22 to 2025–26. This data collection (section 1) encompasses policy owner details, policy specifics, and insured person information. According to the legislation, approximately 1.9 million records per financial year will be obtained to ensure tax and superannuation compliance (section 2). The overarching objectives of this data-matching program (section 3) are to facilitate accurate tax and superannuation reporting, assist individuals and businesses in meeting their registration and lodgment obligations, and ultimately enhance voluntary compliance and community confidence in the tax and superannuation systems.
The Act imposes several obligations on the ATO and the insurers providing data. Insurers are required to furnish detailed information about the income protection insurance policies, including personal and financial details of policy owners and insured persons (section 4). The ATO, on the other hand, must use this data responsibly to achieve the program's objectives and adhere to the Office of the Australian Information Commissioner's Guidelines on data matching (section 5). These guidelines necessitate compliance with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (section 6). Both parties must ensure that the data is used solely for the specified purposes and is protected in accordance with the ATO's privacy policy (section 7).
Failure to comply with the requirements set forth in the Act may result in various consequences. For the ATO, there could be administrative repercussions for misuse of data, including potential legal actions under the Privacy Act. For insurers, non-compliance with data provision requirements may also lead to legal consequences. Individuals and businesses who fail to meet their tax and superannuation obligations due to inaccuracies or omissions in their reported data may face penalties under the Income Tax Assessment Act 1997 and the Superannuation Industry (Supervision) Act 1993 (section 8). These penalties can include fines and interest on unpaid taxes, with the potential for more severe civil or criminal penalties in cases of deliberate non-compliance.