Health Insurance Levy Act 1977

Legislation au C2004A01770 Not in force Act

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HEALTH INSURANCE LEVY ACT 1977

No. 132 of 1977

An Act to impose a health insurance levy upon certain incomes.

BE IT ENACTED by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia, as follows:

Short title

1. This Act may be cited as the Health Insurance Levy Act 1977.

Commencement

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Interpretation

3. (1) In this Act, unless the contrary intention appears—

“Assessment Act” means the Income Tax Assessment Act 1936;

“levy” means health insurance levy referred to in section 6.

(2) In this Act, a reference to net income or taxable income shall be read as a reference to net income or taxable income, as the case may be, of the year of income.

(3) A person shall be taken for the purposes of this Act to have been entitled to free medical treatment at a particular time if, at that time—

(a) the person was entitled to free medical treatment in respect of every incapacity, disease or disabling condition by reason that the person was a member of the Defence Force or was a relative of, or was otherwise associated with, a member of the Defence Force; or

(b) the person was entitled under any of the Repatriation Acts to free medical treatment in respect of every incapacity, disease or disabling condition.

(4) Subject to the preceding provisions of this section, expressions used in this Act that are also used in Part VIIb of the Assessment Act have in this Act, unless the contrary intention appears, the same meanings as those expressions have in that Part of the Assessment Act.

Incorporation

4. The Assessment Act is incorporated, and shall be read as one, with this Act.

Categories of persons liable to pay levy

5. (1) For the purposes of the application of this Act, persons liable to pay levy (other than a person in the capacity of a trustee) shall be taken to be included at any relevant time during the year of income in one of 9 categories as provided by this section.

(2) If at a particular time a person is not a dependent wife and has a dependant or dependants, the person shall be taken to be included at that time—

(a) in a case to which paragraph (b) does not apply—in the first category; or

(b) if the person is a man who is not entitled to free medical treatment and is the dependent husband of a woman who is entitled to free medical treatment—in the second category.

(3) If at a particular time a person is not a dependent wife and does not have any dependants, the person shall be taken to be included at that time in the third category.

(4) If at a particular time a woman is a dependent wife and has a dependant or dependants, the woman shall be taken to be included at that time—

(a) in a case to which neither paragraph (b) nor (c) applies—in the fourth category;

(b) if the woman is entitled to free medical treatment and the man of whom she is the dependent wife is not entitled to free medical treatment—in the fifth category; or

(c) if the woman is not entitled to free medical treatment and the man of whom she is the dependent wife is entitled to free medical treatment—in the sixth category.


(5) If at a particular time a woman is a dependent wife and does not have any dependants, the woman shall be taken to be included at that time—

(a) in a case to which neither paragraph (b) nor (c) applies—in the seventh category;

(b) if the woman is entitled to free medical treatment and the man of whom she is the dependent wife is not entitled to free medical treatment—in the eighth category; or

(c) if the woman is not entitled to free medical treatment and the man of whom she is the dependent wife is entitled to free medical treatment—in the ninth category.

Imposition of health insurance levy

6. Health insurance levy, to the extent that that levy is payable in accordance with Part VIIb of the Assessment Act, is imposed in accordance with this Act at the rates applicable in accordance with this Act.

Rate of levy

7. (1) The rate of levy payable by a person upon a taxable income is 2.5 per centum.

(2) The rate of levy payable by a person in the capacity of a trustee of a trust estate upon a share of the net income of the trust estate to which a beneficiary is presently entitled, being income in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act, is 2.5 per centum.

(3) Subject to sub-section (4), the rate of levy payable by a person in the capacity of a trustee of a trust estate upon the net income of the trust estate or a part of that net income, being income in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 99 or 99a of the Assessment Act, is 2.5 per centum.

(4) The amount of levy payable by a person in the capacity of a trustee of a trust estate upon the net income of the trust estate or a part of that net income, being income in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 99 or 99a of the Assessment Act, shall not exceed—

(a) in the case of income in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 99 of the Assessment Act—

(i) 10 per centum of the amount by which that net income or that part of that net income, as the case may be, exceeds $416; or

(ii) $300,

whichever is the less; and

(b) in the case of income in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 99a of the Assessment Act—$300.

Maximum levy where person included in same category during whole of year of income

8. (1) The amount of levy payable in accordance with section 7 upon a taxable income by a person who was included in the same category during the whole of the year of income shall not exceed—

(a) in the case of a person who was included in the first, fourth or fifth category—$300; and

(b) in the case of a person who was included in any other category—$150.

(2) The amount of levy payable in accordance with section 7 upon a taxable income by a woman who was included during the whole of the year of income in the fourth category or was included during the whole of the year of income in the seventh category shall not exceed the amount remaining after deducting from $300 the amount of levy that would be payable in accordance with section 7 and sub-section (1) of this section by a person included during the whole of the year of income in the first category upon a taxable income equal to the taxable income of the man of whom the woman was the dependent wife at the end of the year of income.

(3) The amount of levy payable in accordance with section 7 upon a taxable income by a woman who was included during the whole of the year of income in the fifth category or was included during the whole of the year of income in the eighth category shall not exceed the amount remaining after deducting from $300 the amount of levy that would be payable in accordance with section 7 and sub-section (1) of this section by a person included during the whole of the year of income in the first category upon a taxable income equal to twice the taxable income of the man of whom the woman was the dependent wife at the end of the year of income.

(4) The amount of levy payable in accordance with section 7 upon a taxable income by a woman who was included during the whole of the year of income in the sixth category or was included during the whole of the year of income in the ninth category shall not exceed one-half of the amount remaining after deducting from $300 the amount of levy that would be payable in accordance with section 7 and sub-section (1) of this section by a person included during the whole of the year of income in the first category upon a taxable income equal to the taxable income of the man of whom the woman was the dependent wife at the end of the year of income.

Maximum levy where person not included in same category during whole of year of income

9. (1) The amount of levy payable in accordance with section 7 upon a taxable income by a person who was not included in the same category during the whole of the year of income shall not exceed the relevant amount, or, if there is more than one relevant amount, the sum of the relevant amounts, applicable to the person under sub-section (2) in respect of the year of income.

(2) For the purposes of sub-section (1)—

(a) subject to sub-section 10(2), a relevant amount is applicable to a person in respect of the year of income for each category in which the person was included during a part or parts of the year of income; and

(b) the relevant amount applicable to a person in respect of the year of income for a particular category is so much of the amount of the levy that would be payable in accordance with sections 7 and 8 by the person upon the taxable income of the person if the part or parts of the year of income in which the person was included in that category constituted a year of income as bears to that amount the same proportion as the number of days in the part, or the sum of the numbers of days in the parts, of the year of income in which the person was included in that category bears to the number of days in the whole of the year of income.

Reduction of levy—person who is prescribed person for part of year of income

10. (1) In the case of a person who was included in the same category during the whole of the year of income but was a prescribed person during a part or parts only of the year of income, the amount of the levy payable by the person in accordance with the preceding provisions of this Act upon the taxable income of the person shall be reduced by so much of that amount as bears to that amount the same proportion as the number of days in the part, or the sum of the numbers of days in the parts, of the year of income during which the person was a prescribed person bears to the number of days in the year of income.

(2) Where, but for this sub-section, a relevant amount would, for the purposes of sub-section 9(1), be applicable to a person in respect of the year of income for a category in which the person was included during a part or parts of the year of income but the person was a prescribed person during the whole of that part, or of those parts, of the year of income, then no relevant amount is, for the purposes of that sub-section, applicable to the person in respect of the year of income for that category.

(3) Where, for the purposes of sub-section 9(1), a relevant amount is applicable to a person in respect of the year of income for a category in which the person was included during a part or parts of the year of income but the person was a prescribed person during portion only of the part, or of any of those parts, of the year of income, that relevant amount shall be reduced by so much of that amount as bears to that amount the same proportion as the number of days in the portion of that part, or the sum of the numbers of days in the portions of those parts, of the year of income during which the person was a prescribed person bears to the number of days in that part, or the sum of the numbers of days in those parts, of the year of income.

Levy payable by a trustee assessable under section 98 of the Assessment Act

11. Where a person in the capacity of a trustee of a trust estate is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act in respect of a share of the net income of the trust estate to which a beneficiary is presently entitled, the amount of levy payable by the trustee upon that share of that net income before the allowance of any rebate under section 251u of the Assessment Act or section 12 of this Act shall not exceed the amount of the levy that would be payable by the beneficiary before the allowance of any such rebate if the amount of that share were the taxable income of the beneficiary.


Small incomes rebate

12. (1) Where the taxable income of a person (other than a person in the capacity of a trustee) is less than $3,402, the person is entitled to a rebate of levy, in his assessment in respect of income of the year of income, of an amount equal to 27 per centum of the amount by which $3,402 exceeds the amount of that taxable income.

(2) Where a trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act in respect of a share of the net income of a trust estate and the amount of that share is less than $3,402, the trustee is entitled to a rebate of levy, in his assessment in respect of that share of the net income, of an amount equal to 27 per centum of the amount by which $3,402 exceeds the amount of that share.

Rebates

13. In the application of section 251u of the Assessment Act to assessments in respect of income of the year of income that commenced on 1 July 1977, sub-section (1) of that section shall be read as if “or under section 6 of the Income Tax (Individuals) Act 1977 “ were inserted after “Part III”.

Financial years for which levy is payable

14. (1) The levy imposed by this Act is levied, and shall be paid, for the financial year that commenced on 1 July 1977.

(2) Until the Parliament otherwise provides, the levy imposed by this Act is also levied, and shall be paid, for the financial year commencing on 1 July 1978.

(3) For the purposes of its application in accordance with sub-section (2), this Act has effect as if—

(a) the references in section 12 to $3,402 were references to—

(i) $3,750; or

(ii) if, by reason of the operation of section 9 of the Income Tax (Rates) Act 1976, that Act has effect in relation to the year of income commencing on 1 July 1978 as if an amount ascertained in accordance with that section were substituted for the amount of $3,750 specified in the table in Schedule 9 to that Act—the amount so ascertained; and

(b) the references in section 12 to 27 per centum were references to 32 per centum.

 

Overview

The Health Insurance Levy Act 1977 was enacted by the Commonwealth Parliament to address the need for additional revenue to support the health insurance system in Australia. The Act was designed to impose a health insurance levy on certain incomes, thereby contributing to the funding of the Medicare system. The levy is imposed in accordance with the provisions of the Income Tax Assessment Act 1936 and applies to specific categories of individuals based on their income and circumstances, including their entitlement to free medical treatment. The primary objective of the Act is to ensure that individuals who can afford to contribute to the health insurance system do so, thereby supporting its sustainability and the provision of healthcare services to all Australians. The Act outlines the categories of persons liable to pay the levy, the rates of levy, and the maximum amounts payable under different circumstances. It also provides for rebates for individuals with lower incomes and incorporates the Income Tax Assessment Act 1936 to ensure consistency in the definitions and application of certain terms. The levy is payable for specified financial years, starting with the financial year commencing on 1 July 1977, and subsequent years as determined by the Parliament. The Act aims to fairly distribute the financial burden of supporting the health insurance system among those who can afford to contribute, ensuring that the system remains viable and accessible to all.

Scope and Application

The Health Insurance Levy Act 1977 applies to certain individuals and entities liable to pay a health insurance levy on specified incomes, and is intended to contribute towards health insurance costs. The Act applies to individuals based on their relationship status and entitlement to free medical treatment, categorising them into nine groups. It also applies to trustees of trust estates who are liable to be assessed and taxed under the Income Tax Assessment Act 1936. The Act imposes a levy at a rate of 2.5% of the taxable income, with certain caps and reductions applicable depending on the individual's category and duration of inclusion in that category during the financial year. The Act extends to the Commonwealth of Australia, with its provisions incorporated into the Income Tax Assessment Act 1936. There are no explicit exclusions or exemptions mentioned in the text, but certain rebates are provided for small incomes and specific circumstances. The Act’s provisions can be extended or modified through subordinate instruments, though this is not detailed in the text.

Key Provisions

The Health Insurance Levy Act 1977 (the "Act") imposes a health insurance levy on certain incomes, as outlined in section 6. The levy is applied at a rate of 2.5% of the taxable income, as stated in section 7. The Act categorises persons liable to pay the levy into nine distinct groups based on their circumstances, as described in section 5. The levy amount varies depending on the category of the individual and whether they were in the same category throughout the year of income, as detailed in sections 8 and 9. Individuals and trustees must comply with the requirements set out in the Act, ensuring they correctly determine their category and calculate the levy accordingly. For example, section 11 specifies that a trustee’s levy on a share of the net income of a trust estate cannot exceed the levy that would be payable by a beneficiary. Additionally, individuals and trustees with taxable incomes below $3,402 are entitled to a rebate, as stipulated in section 12. Failure to comply with the Act’s provisions can lead to penalties. Section 10 details the consequences for not adhering to the rules, including potential reductions in the levy for prescribed persons. Although the Act does not explicitly state penalties for non-compliance, breaches could result in civil or criminal consequences under other relevant Australian legislation, such as the Crimes Act 1914, depending on the nature and severity of the breach.

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Area of Law
Taxation Law
Instrument
Act
Concepts
Definitions & Interpretation
Imposition of health insurance levy
Rate of levy
Commencement Provisions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.