Commissioner of Taxation
NOTICE OF A DATA MATCHING PROGRAM
The ATO will acquire data from the Department of Human Services – Medicare where individuals have been granted an exemption from paying the Medicare Levy for the 2013, 2014 and 2015 financial years.
It is estimated that records for 130,000 individuals will be obtained each year.
These records will be electronically matched with certain sections of ATO data holdings to identify non-compliance with registration, lodgment, reporting and payment obligations under taxation and superannuation laws.
This program is called the Medicare Levy Exemption Certificate data matching program and is purpose is to ensure taxpayers are not unfairly avoiding their obligations with paying the Medicare levy and in certain situations this extends to the Medicare levy surcharge. Its objectives are to:
- to ensure taxpayers who are exempt from the Medicare levy are receiving their entitled exemption
- to ensure taxpayers not entitled to the exemption are not unfairly avoiding their taxation obligations
- to promote voluntary compliance and strengthen community confidence in the integrity of the tax system, and
- to provide possible opportunities to satisfy the ATO’s wider compliance.
The ATO is authorised under section 264 of the Income Tax Assessment Act 1936 to collect this data from the Department of Human Services – Medicare.
In very limited and specific circumstances the ATO is lawfully permitted to on-disclose individual records to third parties, including state and territory revenue offices and law enforcement agencies. It is not likely that this data will be provided to any Australian Tax Treaty partners.
A document describing this program has been prepared in consultation with the Office of the Australian Information Commissioner. A copy of this document is available by sending an email to SpecialPurposeDataSteward@ato.gov.au
The ATO complies with the Office of the Australian Information Commissioner’s The use of data matching in Commonwealth administration – guidelines (2014) which includes standards for data matching to protect the privacy of individuals. A full copy of the ATO’s privacy policy can be accessed at www.ato.gov.au/privacy
Overview
The Commissioner of Taxation Notice of a Data Matching Program, published in 2014, was introduced to address the issue of non-compliance with registration, lodgment, reporting, and payment obligations under taxation and superannuation laws, specifically concerning the Medicare Levy Exemption. Enacted by the Australian Taxation Office (ATO), this program aims to ensure that individuals who are exempt from the Medicare levy are correctly receiving their exemption while also preventing those who are not entitled to the exemption from avoiding their tax obligations. The policy objective is to promote voluntary compliance and enhance community confidence in the integrity of the tax system. This initiative is authorised under section 264 of the Income Tax Assessment Act 1936 and adheres to the guidelines set by the Office of the Australian Information Commissioner to protect the privacy of individuals involved in the data matching process.
Scope and Application
The Medicare Levy Exemption Certificate data matching program is a legislative initiative designed to ensure compliance with taxation and superannuation laws by targeting individuals who have claimed exemptions from the Medicare levy without meeting the eligibility criteria. The Act applies to those individuals who have been granted exemptions from the Medicare levy for the specified financial years, specifically targeting non-compliance with registration, lodgment, reporting, and payment obligations under relevant taxation laws. The program involves the Australian Taxation Office (ATO) acquiring and matching data from the Department of Human Services – Medicare with its own data holdings to identify discrepancies. The ATO is authorised under section 264 of the Income Tax Assessment Act 1936 to facilitate this data matching program. This initiative is not only confined to the Commonwealth but extends to potentially sharing limited and specific individual records with state and territory revenue offices and law enforcement agencies in specific circumstances, although it is unlikely to involve Australian Tax Treaty partners. The program adheres to privacy standards outlined in the Office of the Australian Information Commissioner’s guidelines and the ATO’s privacy policy, which is available on their website.
Key Provisions
The Medicare Levy Exemption Certificate data matching program, as outlined in the Commissioner of Taxation's Notice of a Data Matching Program, operates under the authority of section 264 of the Income Tax Assessment Act 1936 (section 264). This program involves the Australian Taxation Office (ATO) acquiring data from the Department of Human Services – Medicare, specifically targeting individuals who have been granted an exemption from paying the Medicare Levy for the 2013, 2014, and 2015 financial years. The ATO estimates that approximately 130,000 individual records will be obtained each year. This data is then electronically matched against the ATO’s data holdings to identify any non-compliance with registration, lodgment, reporting, and payment obligations under taxation and superannuation laws. The primary aim of this program is to ensure that taxpayers who are exempt from the Medicare Levy are indeed receiving their entitled exemption while preventing those who are not entitled to the exemption from unfairly avoiding their taxation obligations.
The obligations imposed by this data matching program on the parties involved are significant. The ATO, as the governing body, must ensure that it collects and processes the data in accordance with the Income Tax Assessment Act 1936 and the guidelines set out by the Office of the Australian Information Commissioner. The ATO must also comply with privacy standards to protect the personal information of individuals whose records are being matched. These standards are detailed in the guidelines for the use of data matching in Commonwealth administration and are aimed at ensuring that the privacy of individuals is safeguarded during the data matching process. The ATO's privacy policy, which outlines how personal information is collected, used, disclosed, and protected, can be accessed on their official website.
In terms of potential consequences for breach, the Notice does not explicitly state the offences, penalties, or consequences for non-compliance with the data matching program. However, given that the program is designed to promote compliance with taxation laws, it is reasonable to infer that non-compliance could lead to a variety of civil and criminal consequences. These might include fines, penalties for non-lodgement or late lodgment of tax returns, interest on unpaid taxes, and potentially criminal charges for tax evasion or fraud. The exact penalties would depend on the nature and severity of the breach, as well as the relevant provisions of the Income Tax Assessment Act 1936 and other applicable legislation. The ATO is also authorised to disclose individual records to third parties in very limited and specific circumstances, including to state and territory revenue offices and law enforcement agencies, as permitted under the law. The ATO is also committed to adhering to privacy guidelines and standards to protect the confidentiality and integrity of the data involved.