National Health (Loyalty Bonus Scheme) Guidelines 1999

Administered by Department of Health, Disability and Ageing

Legislation au F2006B00121 Not in force Legislative Instrument

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I, Michael WoolDridge, Minister for Health and Aged Care, make these Guidelines under subsection 73BA (2A) of the National Health Act 1953.

Dated 13 October 1999.

MICHAEL WOOLDRIDGE
Minister for Health and Aged Care

National Health (Loyalty Bonus Scheme) Guidelines 1999

made under the

National Health Act 1953

Contents

Page

Part 1 Preliminary

1 Name of Guidelines

2 Commencement

3 Interpretation

4 Application

Part 2 Circumstances in which an organization can offer a loyalty bonus

5 Loyalty bonus to be based on membership duration

6 Ascertaining membership duration

7 Circumstances affecting calculation of membership duration

8 Circumstances not affecting membership continuity

9 Eligibility for loyalty bonus

10 Notice

Part 3 Types of loyalty bonuses

11 Uniformity

Part 1 Preliminary

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1 Name of Guidelines

These Guidelines are the National Health (Loyalty Bonus Scheme) Guidelines 1999.

2 Commencement

These Guidelines commence on 20 October 1999.

3 Interpretation

(1) In these Guidelines:

Act means the National Health Act 1953.

fund means a health benefits fund conducted by an organization.

loyalty bonus means financial benefits, goods or services offered under a loyalty bonus scheme, within the meaning of section 73BA of the Act.

specified change, for a contributor, means a change in the contributor’s kind of membership:

(a) from single to couple, family or single parent; or

(b) from couple to family, single parent or single; or

(d) from single parent to single, couple or family.

(2) For these Guidelines, a continuous period of contributions to a fund is not broken by:

(a) a specified change; or

(b) a lapse in contributions, if the rules of the fund make provision, of consistent application to all contributors, recognising continuity despite lapses in contributions.

4 Application

These Guidelines apply to rules of an organization that permit the implementation of a scheme of the kind to which paragraph (ma) of Schedule 1 to the Act applies.

Part 2 Circumstances in which an organization can offer a loyalty bonus

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5 Loyalty bonus to be based on membership duration

For subsection 73BA (2A) of the Act, a loyalty bonus may be offered by an organization only in the circumstance described in paragraph (ma) of Schedule 1 to the Act.

6 Ascertaining membership duration

(1) An organization’s rules dealing with the calculation of the duration of a contributor’s membership of the fund conducted by the organization must comply with subsection (2).

(2) To the extent that the rules determine eligibility of a person, or a class of persons, to receive a loyalty bonus because of the period of time over which contributions have been paid:

(a) commencement of membership of the fund must be taken to occur when the first contribution in a continuous period of contributions to the fund is paid by, or on behalf of, the contributor in relation to any applicable benefits arrangement of the organization; and

(b) rules that affect determination of continuity of membership of a contributor must apply consistently to all contributors.

7 Circumstances affecting calculation of membership duration

(1) An organization may make rules that affect the calculation of the duration of a contributor’s membership of a fund by taking into account the following circumstances:

(a) the contributor suspends, with the organization’s agreement, his or her contributions to the fund;

(b) the contributor, having temporarily ceased contributions to the fund concerned in order to contribute to the fund of a different organization, resumes contributions to the fund concerned;

(d) the contributor contributes only to a table of ancillary health benefits.

(2) An organization may make rules about the extent to which the organization takes into account, for the calculation of the duration of a contributor’s membership of a fund, the contributor’s membership before a specified change by the contributor.

For example

While a change by a contributor from single membership to couple, family or single parent membership does not break a continuous period of contribution by the contributor, the rules may provide for the way in which the duration of that membership is to be calculated in this circumstance.

(3) A rule made under subsection (1) or (2) must:

(a) apply consistently to all contributors; and

(b) state how the duration of a contributor’s membership is to be calculated in the circumstance.

(4) Any amendment of a rule that affects the calculation of the duration of a contributor’s membership of a fund must not affect the calculation of the duration of the contributor’s membership before the amendment takes effect.

8 Circumstances not affecting membership continuity

For these Guidelines, continuity of membership of a person in an organization must not be affected by:

(a) a contributor having discontinued contributions to an applicable benefits arrangement of the organization, or a table of ancillary health benefits offered by the organization, for the purpose of enabling contributions to be made to a different arrangement or table offered by the organization; or

(b) a period of unpaid contributions to which paragraph (g) of Schedule 1 to the Act applies and for which payment is made as provided in subparagraph (g) (i) of Schedule 1 to the Act.

9 Eligibility for loyalty bonus

Eligibility of a person to receive a loyalty bonus from an organization cannot be affected by rules that allow the organization to exclude the person because contributions have been made to the fund by, or on behalf of, the person, for longer than a specified period.

10 Notice

An organization that operates a loyalty bonus scheme must give each contributor to the health benefits fund conducted by the organization notice of the existence of its rules relating to the scheme, and information on how to obtain a copy of those rules.

Part 3 Types of loyalty bonuses

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11 Uniformity

(1) The type of loyalty bonus that can be offered by an organization is unlimited except that each person eligible to receive the loyalty bonus must be offered the same type, or the same choice of types, as each other eligible person.

(2) However:

(a) loyalty bonuses for contributors to a particular applicable benefits arrangement, or a particular table of ancillary health benefits, need not be the same as loyalty bonuses for dependants of contributors; and

(b) loyalty bonuses relating to a particular applicable benefits arrangement, or a particular table of ancillary health benefits, need not be the same as loyalty bonuses relating to another applicable benefits arrangement or table of ancillary health benefits.

Overview

The National Health (Loyalty Bonus Scheme) Guidelines 1999 were made under the National Health Act 1953 by Michael Wooldridge, the Minister for Health and Aged Care, to address the need for a framework governing the offer of loyalty bonuses by health funds to their members. These guidelines were designed to ensure that loyalty bonuses are offered fairly and consistently across all members of a health fund, taking into account the duration of their membership and various circumstances that might affect this duration. The guidelines provide clear parameters for how health funds can calculate membership duration and offer loyalty bonuses, ensuring that the benefits are not unfairly distributed and that all members are treated equitably. The primary objective of these guidelines is to maintain fairness and transparency in the implementation of loyalty bonus schemes within the health sector. These guidelines apply to the rules of an organisation that allows the implementation of a loyalty bonus scheme, in accordance with the provisions of the National Health Act 1953. They stipulate that loyalty bonuses can only be based on the duration of a member's continuous contributions, with specific rules on how membership duration is calculated and what circumstances can affect this calculation. Additionally, the guidelines ensure that changes in a member’s type of membership do not disrupt the continuity of their membership period. By adhering to these guidelines, health funds can offer loyalty bonuses in a manner that is consistent and equitable for all members, thereby maintaining trust and integrity within the health benefits system.

Scope and Application

The National Health (Loyalty Bonus Scheme) Guidelines 1999 apply to health benefits funds conducted by organizations under the National Health Act 1953, governing the rules of these organizations that permit the implementation of loyalty bonus schemes. These Guidelines set out the conditions under which an organization can offer a loyalty bonus, such as basing the bonus on the duration of membership, and stipulate that the calculation of membership duration must be consistent and not be interrupted by certain changes in membership type or lapses in contributions. The Guidelines also mandate that organizations must provide contributors with notice of the rules relating to the loyalty bonus scheme and ensure that all eligible contributors are offered the same type of loyalty bonus or the same choice of types. The Guidelines do not apply to all aspects of the operation of health funds but specifically to the implementation of loyalty bonus schemes as permitted by the Act. The Guidelines are designed to ensure transparency and fairness in the administration of loyalty bonuses within the health funds sector.

Key Provisions

The National Health (Loyalty Bonus Scheme) Guidelines 1999, made under the National Health Act 1953, provide a framework for how health benefits funds can offer loyalty bonuses to contributors. According to section 5, loyalty bonuses can only be offered in circumstances specified in Schedule 1 to the Act, which is linked to subsection 73BA(2A) of the Act. The duration of a member’s contribution to the fund is crucial for determining eligibility for these bonuses. Section 6 mandates that the commencement of membership must be calculated from the first contribution in a continuous period, and rules must apply consistently to all contributors. Various circumstances can affect the calculation of membership duration, as outlined in section 7. For instance, if a member temporarily suspends their contributions with the fund's agreement or switches to another fund before returning, these actions can be taken into account. However, certain changes, such as a member switching from single to couple membership, do not break the continuity of membership as stated in section 8. The Guidelines also ensure that the continuity of membership is not disrupted by temporary lapses in contributions, as long as the fund’s rules consistently apply to all members (section 4). Under these Guidelines, organizations must notify each contributor about the rules governing the loyalty bonus scheme and provide information on how to obtain these rules (section 10). The type of loyalty bonus offered must be uniform among all eligible members, although different types can be offered to contributors versus their dependants, and for different benefit arrangements or ancillary health benefits (section 11). These provisions aim to ensure transparency, fairness, and consistency in how loyalty bonuses are offered and calculated. Failure to comply with these Guidelines can result in legal consequences. While the Guidelines themselves do not explicitly list offences or penalties, breaches of the underlying Act or regulations may lead to enforcement actions by the relevant authorities. This could include civil penalties for non-compliance, which under the National Health Act 1953, can amount to significant fines. Additionally, persistent or severe breaches could result in criminal charges, leading to further penalties including imprisonment, depending on the nature and severity of the breach. It is essential for organisations to adhere strictly to these Guidelines to avoid such legal repercussions.

Area of Law: Health Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Commencement Provisions; Reporting & Disclosure Obligations
Catchwords: loyalty bonus

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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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