Health Insurance Levy Act (No. 2) 1976

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HEALTH INSURANCE LEVY ACT (No. 2) 1976

No. 97 of 1976

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 (No. 2) 1976.

Commencement.

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

Repeal.

3. The Health Insurance Levy Act 1976 is repealed and shall be deemed never to have had effect.

Interpretation,

4. (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 7.

(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.

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

Categories of persons liable to pay levy.

6. (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.

(6) In determining for the purposes of this Act whether a person was, or was not, included in the same category during the whole of a year of income and in calculating the number of days in a year of income, the year of income that commenced on 1 July 1976 shall be deemed to be constituted by the period commencing on 1 October 1976 and ending on 30 June 1977.

Imposition of health insurance levy.

7. 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.

8. (1) The rate of levy payable by a person upon a taxable income is 1.875 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 in pursuance of section 98 of the Assessment Act, is 1.875 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 pay tax in pursuance of section 99 or 99a of the Assessment Act, is 1.875 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 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 pay tax in pursuance of section 99 of the Assessment Act—

(i) 7.5 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) $225,

whichever is the less; and

(b) in the case of income in respect of which the trustee is liable to be assessed and pay tax in pursuance of section 99a of the Assessment Act—$225.

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

9. (1) Subject to this section, the amount of levy payable in accordance with section 8 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—$225; and

(b) in the case of a person who was included in any other category—$112.50

(2) The amount of levy payable in accordance with section 8 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 $225 the amount of levy that would be payable in accordance with section 8 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 8 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 $225 the amount of levy that would be payable in accordance with section 8 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 8 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 $225 the amount of levy that would be payable in accordance with section 8 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.

10. (1) The amount of levy payable in accordance with section 8 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 11(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 8 and 9 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.

11. (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 10(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 10(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 that 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.

12. Where a person in the capacity of a trustee of a trust estate is liable to be assessed 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 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.

Financial years for which levy is payable.

13. (1) The levy imposed by this Act is levied, and shall be paid, for the financial year that commenced on 1 July 1976.

(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 1977.

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

(a) references in section 8 to 1.875 per centum were references to 2.5 per centum;

(b) references in sections 8 and 9 to $225 were references to $300;

(d) the reference in paragraph 9(1)(b) to $112.50 were a reference to $150.

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Overview

The Health Insurance Levy Act (No. 2) 1976 was enacted by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia. This Act was introduced to address the need for a health insurance levy on certain incomes, replacing the Health Insurance Levy Act 1976. The primary objective of this Act is to impose a health insurance levy on specific categories of individuals at a rate of 1.875 percent of their taxable income, with maximum levy amounts set to ensure fairness and proportionality. The Act incorporates the Income Tax Assessment Act 1936, thereby ensuring consistency in definitions and application. The levy is applicable for financial years starting from 1 July 1976, with provisions for subsequent years pending parliamentary decision. The levy rates and maximum amounts are adjusted for the financial year commencing on 1 July 1977, reflecting a temporary increase designed to meet urgent fiscal needs.

Scope and Application

The Health Insurance Levy Act (No. 2) 1976 applies to individuals and trustees in relation to their taxable incomes and the net income of trust estates respectively, categorising them based on their circumstances such as whether they have dependents or are entitled to free medical treatment. The Act operates within the Commonwealth jurisdiction, with the levy calculated and payable according to the rates and structures outlined in the Income Tax Assessment Act 1936. There are no explicit exclusions or exemptions stated within the text, but the Act does provide specific caps on the maximum levy payable depending on the individual's category and the duration they remained in that category throughout the financial year. The Act also specifies the rates of levy, which are set at 1.875 per cent for individuals and trustees, with additional caps and reductions applicable under certain conditions. The application of the Act is further refined through subordinate instruments which may extend or modify its provisions as deemed necessary by the Parliament.

Key Provisions

The Health Insurance Levy Act (No. 2) 1976 establishes a health insurance levy to be imposed on certain incomes, as detailed in sections 6 to 13. These sections outline the categories of persons liable for the levy, the rates at which it is applied, and the maximum amounts that can be levied. For instance, section 6 defines nine categories of persons liable to pay the levy, based on their relationship status and eligibility for free medical treatment. Section 8 specifies the rate of the levy, which is 1.875 per centum of the taxable income, with exceptions for trustees of trust estates outlined in sections 8(2) to 8(4). The levy is subject to a maximum cap, detailed in sections 9 and 10, which varies depending on the category and duration of inclusion in that category. The Act imposes specific obligations on individuals and trustees who fall within the defined categories liable for the levy. These obligations include accurately determining their category and calculating the applicable levy based on the provisions of sections 6 to 10. Trustees, in particular, have the obligation to ensure that the levy on the net income of the trust estate does not exceed the specified limits, as outlined in section 12. Failure to comply with the obligations set forth in the Act can result in civil or criminal consequences. Although the Act does not explicitly detail offences, penalties, or criminal consequences for non-compliance, breaches of tax laws generally can lead to penalties, fines, or imprisonment under other related statutes, such as the Crimes Act 1914. The penalties for tax-related offences can be severe, including substantial fines and imprisonment terms, depending on the nature and extent of the breach. The exact penalties would be governed by other legislation, such as the Crimes Act 1914, which provides for general criminal penalties for tax evasion and non-compliance.

Area of Law: Taxation Law
Instrument: Act
Concepts: Definitions & Interpretation; Offence Provisions; Compliance Obligations; Reporting & Disclosure Obligations

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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.

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