Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2005B01383 Not in force Legislative Instrument

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Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1)

I, MICHAEL WOOLDRIDGE, Minister for Health and Aged Care, make this Determination under subsection 73BC (5B) of the National Health Act 1953.

Dated 18 April 2000

M. WOOLDRIDGE

Minister for Health and Aged Care

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1 Name of Determination

  This Determination is the Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1).

2 Commencement

  This Determination commences on gazettal.

3 Amendment of Health Benefits Reinsurance (Trust Fund Principles) Determination 1998

  Schedule 1 amends the Health Benefits Reinsurance (Trust Fund Principles) Determination 1998.

 

Schedule 1 Amendments

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(section 3)

[1] Sections 1.3A, 1.3B and 1.3C

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[2] Subsection 2.2 (1A)

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[3] Subsection 2.2 (2)

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subsections (1) and (1A)

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subsection (1)

[4] After section 2.7

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Part 3A Adjusting calculations

3A.1 Calculation of appropriate payment may be adjusted

 (1) If, after a calculation (the primary calculation) is made under section 2.6 or 3.3, the Council receives information (new information) on a matter mentioned in subsection 2.2 (1) that, if received earlier, would have affected the result of that calculation, the Council may make a further calculation taking account of the new information.

 (2) Unless subsection (3) applies, a further calculation may be made only if the new information is received by the Council:

 (a) during the financial year in which the particular quarter concerned occurs; or

 (b) within the period provided under subsection 82L (2) of the Act for the giving of the report, described in that subsection, that relates to the particular quarter concerned.

 (3) A further calculation may be made as a result of new information received later than is allowed under subsection (2) if the Council is satisfied that:

 (a) the new information demonstrates that, in preparing its report in respect of information that the Council is required to acquire under subsection 82G (1) of the Act, the registered organisation made a significant error; and

 (b) it is in the best interests of registered organisations generally, and good administration of the Fund, that a further calculation be made.

Example 1

Under subsection (2), new information could be considered for a calculation made for the September quarter of 1998 if the new information was received by the Council at any time until, and including, 30 September 1999.

This is because the registered organisation concerned had until the end of September 1999 to give the Council information to enable the Council to prepare its report to the Minister about the 1998-1999 financial year (see subsection 82L (2) and section 82PA of the Act).

Example 2

Under subsection (2), new information could not be considered for a calculation made for the June quarter of 1999 if the information was received by the Council after 30 September 1999.

This is because 30 September 1999 was the last day for the Council to receive information about registered organisation operations in the 1998-1999 financial year to enable it to prepare its report to the Minister (see subsection 82L (2) of the Act).

3A.2 Determination of adjustment payments

  If a further calculation made under section 3A.1 shows that a payment made under subsection 73BC (6) or (12) was not appropriate, the Council may determine:

 (a) under subsection 73BC (6) — that an adjusting amount is an appropriate payment in relation to the registered organisation concerned; or

 (b) under subsection 73BC (12) — that an adjusting amount is to be paid to the registered organisation concerned.

3A.3 Application of adjustment payments

 (1) In general, a determination under section 3A.2 takes effect in the first reinsurance settlement period for the registered organisation concerned that follows the making of the determination:

 (a) if subsection 73BC (6) applies — as an appropriate payment in relation to that organisation; or

 (b) if subsection 73BC (12) applies — as an amount to be paid to that organisation.

 (2) However, if the Council is satisfied that the financial stability of the registered organisation, or the Fund, would be unreasonably affected by the application of subsection (1), the determination takes effect as payments (proportional, or as otherwise decided by the Council) in:

 (a) the reinsurance settlement period mentioned in that subsection; and

 (b) as many subsequent reinsurance settlement periods as the Council determines to be reasonable.

 (3) In this section:

reinsurance settlement period means the period following the end of each quarter, during which the Council determines whether payment should be made to, or received from, each registered organisation in respect of that quarter.

unreasonably affected means:

 (a) in the case of an organisation having to pay an adjusting amount under subsection 73BC (6) of the Act — that the amount of the payment is so large that, in the opinion of the Council, the financial stability of the organisation would be at risk; or

 (b) in the case of a payment having to be made under subsection 73BC (12) of the Act — that the amount of the payment would be greater than 1% of the amount, at the time the determination is made, of the State or Territory pool of the Fund from which the payment is to be drawn.

 

Overview

The Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1) was enacted to address issues related to the accuracy and timeliness of financial calculations within the National Health Reinsurance Fund. This legislative instrument was made by Michael Wooldridge, the Minister for Health and Aged Care, under the authority granted by subsection 73BC(5B) of the National Health Act 1953. The primary objective of this amendment is to ensure that any miscalculations in the Fund's financial operations are rectified, thus promoting better administration and financial stability of the Fund and the registered organisations it supports. The Determination provides mechanisms for adjusting payments based on new information that may have affected earlier calculations, ensuring that the Fund operates equitably and efficiently. This legislative measure was introduced to correct oversights and enhance the overall governance and transparency of the Fund's financial practices.

Scope and Application

The Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1) amends the Health Benefits Reinsurance (Trust Fund Principles) Determination 1998 under the authority of the National Health Act 1953. This legislative instrument applies to entities within the Health Benefits Reinsurance scheme, specifically targeting registered organisations that are part of the reinsurance arrangements established under the Act. The Amendment Determination seeks to enhance the administration and accuracy of financial calculations related to health benefits reinsurance by allowing for adjustments based on new information received post-calculation. The scope of the Amendment Determination is federal, as it is made under the Commonwealth's authority and affects entities across various states and territories in Australia that are involved in health benefits reinsurance activities. The Determination does not specify exclusions or exemptions but operates within the parameters set by the overarching National Health Act. The applicability of the Amendment Determination can be further extended or specified through subordinate instruments that might be issued under the authority of the Act.

Key Provisions

The Health Benefits Reinsurance (Trust Fund Principles) Amendment Determination 2000 (No. 1) amends the Health Benefits Reinsurance (Trust Fund Principles) Determination 1998, introducing new provisions that enable the Council to adjust payments based on new information. Section 3A.1 of the amended Determination allows the Council to make a further calculation of an appropriate payment if it receives new information after the initial calculation has been completed. This provision is crucial as it ensures that payments are accurately calculated and reflect any changes in circumstances that might have affected the initial calculation. For instance, if new information is received during the financial year in which the particular quarter is concerned or within the period for the Council to give a report to the Minister, it can be considered for a recalculation (subsection 3A.1(2)). However, if new information is received later, it can only be considered if the Council is satisfied that it demonstrates a significant error by the registered organisation and that it is in the best interests of the registered organisations generally and good administration of the Fund to make the adjustment (subsection 3A.1(3)). The Determination imposes several obligations on the Council and registered organisations. The Council is required to consider new information received within specified timeframes and make further calculations if necessary. Registered organisations, on the other hand, must ensure that they provide accurate and timely information to the Council to enable it to make proper calculations. These obligations are intended to ensure that the reinsurance payments are fair and accurately reflect the operations and financial status of the registered organisations. The Determination also requires the Council to consider the financial stability of the registered organisations and the Fund when determining how and when to apply any adjustments to payments. Breaching the requirements of this Determination can result in significant consequences. Although the Determination itself does not specify penalties for non-compliance, it is part of a broader legislative framework under the National Health Act 1953, which may include provisions for fines and other penalties. For instance, if a registered organisation knowingly provides incorrect information or fails to provide information as required, it may face civil or criminal penalties under the broader Act. The severity of these penalties can vary, but they are intended to enforce compliance and ensure the integrity of the reinsurance fund.

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