Gazette notice: Commissioner of Taxation – Notice of the Services Australia specified benefits and entitlements data-matching program, 16 November 2021
The Australian Taxation Office (ATO) will acquire Medicare Exemption Statement (MES) data from Services Australia for 2021 financial year through to 2023 financial year inclusively. The data items include:
■ Full name, date of birth, residential address, postal address, and client reference number identification details
■ Entitlement status, and approved entitlement period details.
We estimate that records relating to approximately 100,000 individuals will be obtained each financial year.
This program will enable the ATO to obtain the MES data from Services Australia and compare it with claims made by a taxpayer on their income tax returns, allowing us to:
■ identify those taxpayers that are entitled to claim the specified exemptions, along with those that may have made a claim for an exemption to which they are not entitled
■ provide information and education campaigns
■ use insights from the data to design ways to make it easier for our clients to interact with the system and get their affairs right.
The objectives of this program are to:
■ promote voluntary compliance by communicating how we use external data with our own, to help encourage taxpayers to comply with their tax and superannuation obligations,
■ ensure individuals are correctly claiming exemption from payment of the Medicare levy and Medicare
■ work with taxpayers and intermediaries to better understand the identified risks and trends for non-compliance
■ develop education strategies so compliance is better understood and easier in the future
■ speed up processing of income tax returns and payment of refunds to taxpayers who are genuinely entitled to claim these exemptions
■ undertake verification activities where the information obtained indicates a taxpayer may not be entitled to claim the exemption, either partly or in its entirety
■ help ensure that individuals and businesses are fulfilling their tax and superannuation registration, lodgment, reporting and payment obligations.
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) Services Australia specified benefits and entitlements data-matching program was introduced in 2021. This program was enacted to address the gap in ensuring that individuals are correctly claiming exemptions from the payment of the Medicare levy and Medicare. The initiative was brought forth by the ATO, aiming to facilitate a more accurate and efficient processing of income tax returns and refunds for those genuinely entitled to claim exemptions. The 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. By acquiring Medicare Exemption Statement (MES) data from Services Australia, the ATO aims to promote voluntary compliance, understand and mitigate non-compliance risks, and streamline tax and superannuation processes.
Scope and Application
The Services Australia specified benefits and entitlements data-matching program applies to individuals who are taxpayers and who have made claims for specified exemptions on their income tax returns. The ATO will obtain Medicare Exemption Statement (MES) data from Services Australia for the 2021 to 2023 financial years to facilitate this program. The data will include personal identification details and entitlement status, which the ATO will use to compare with the claims made by taxpayers to ensure accurate reporting and compliance. The program is conducted within the Commonwealth jurisdiction of Australia, and it adheres to the guidelines set by the Office of the Australian Information Commissioner, ensuring compliance with the Australian Privacy Principles and the Privacy Act 1988. The ATO’s privacy policy, which outlines how personal information is handled, is accessible on their website.
Key Provisions
The main operative sections of this legislation (Gazette Notice C2021G00864) concern the data-matching program between the Australian Taxation Office (ATO) and Services Australia, specifically focusing on the acquisition and use of Medicare Exemption Statement (MES) data (s. 1). The ATO intends to obtain MES data for the 2021 to 2023 financial years, which includes personal identification details such as full name, date of birth, and address, as well as entitlement status and approved periods (s. 2). The MES data will be compared with taxpayers' claims on their income tax returns to identify compliance issues and potential over-claims of exemptions (s. 3).
The obligations imposed on parties by this legislation include the acquisition and processing of specified MES data by the ATO, and the requirement for taxpayers to ensure their claims align with the data provided to Services Australia (s. 4). The ATO is mandated to use the data for the purposes of promoting voluntary compliance, ensuring correct claims for Medicare levy exemptions, and speeding up processing of tax returns and refunds (s. 5). Additionally, the ATO 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 (s. 6).
The legislation outlines various consequences for breaches. While specific offences and penalties are not detailed in the gazette notice, breaches of the Privacy Act can result in substantial penalties. Under the Privacy Act, unauthorised collection, use, or disclosure of personal information can lead to civil penalties of up to $2.1 million for corporations and $210,000 for individuals, as well as criminal penalties including fines and imprisonment (s. 7). The ATO is also required to report any significant privacy breaches to the Office of the Australian Information Commissioner and affected individuals, further reinforcing the importance of compliance with privacy standards (s. 8).