Private Health Insurance Amendment (Income Thresholds) Act 2021

Administered by Department of Health, Disability and Ageing

Legislation au C2021A00052 In force Act

Legislation content

 

 

 

 

 

 

Private Health Insurance Amendment (Income Thresholds) Act 2021

 

No. 52, 2021

 

 

 

 

 

An Act to amend the Private Health Insurance Act 2007, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Amendments

Private Health Insurance Act 2007

 

 

 

Private Health Insurance Amendment (Income Thresholds) Act 2021

No. 52, 2021

 

 

 

An Act to amend the Private Health Insurance Act 2007, and for related purposes

[Assented to 24 June 2021]

The Parliament of Australia enacts:

1  Short title

  This Act is the Private Health Insurance Amendment (Income Thresholds) Act 2021.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  The whole of this Act

1 July 2021.

1 July 2021

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments

 

Private Health Insurance Act 2007

1  Section 22‑35

Repeal the section, substitute:

22‑35  Private health insurance singles thresholds

 (1) A person’s singles tier 1 threshold for the 2021‑22 and 2022‑23 financial year is $90,000. This amount is indexed for later financial years under section 22‑45.

 (2) A person’s singles tier 2 threshold for the 2021‑22 and 2022‑23 financial year is $105,000. This amount is indexed for later financial years under section 22‑45.

 (3) A person’s singles tier 3 threshold for the 2021‑22 and 2022‑23 financial year is $140,000. This amount is indexed for later financial years under section 22‑45.

Note: A person may be a tier 1 earner, tier 2 earner or tier 3 earner if the person’s income for surcharge purposes exceeds the applicable threshold for that tier: see section 22‑30.

2  Subsection 22‑40(4) (example)

Repeal the example, substitute:

Example: If the person has 3 such dependants who are children, the person’s family tier 2 threshold for the 2021‑22 and 2022‑23 financial year is:

 

3  Subsection 22‑45(1)

Repeal the subsection, substitute:

 (1) An amount mentioned in section 22‑35 is indexed for the 2023‑24 financial year, and later financial years, in accordance with this section.

4  Paragraph 22‑45(2)(a)

Repeal the paragraph, substitute:

 (a) firstly, multiplying the amount by the *indexation factor for the financial year under subsection (4); and

5  Subsection 22‑45(2) (examples 1 and 2)

Repeal the examples, substitute:

Example 1: If the amount to be indexed is $105,000 and the indexation factor increases this to an indexed amount of $107,500, the indexed amount is rounded back down to $107,000.

Example 2: If the amount to be indexed is $140,000 and the indexation factor increases this to an indexed amount of $142,500, the indexed amount is rounded down to $142,000.

6  Subsections 22‑45(3) to (3B)

Repeal the subsections, substitute:

 (3) However, do not index the amount for a financial year if the amount worked out under subsection (2) for the financial year is less than the amount applicable under section 22‑35 or this section for the previous financial year.

 (3A) If the amount is not indexed for a financial year because of subsection (3), the amount for the financial year is the same as the amount for the previous financial year.

7  Subsection 22‑45(4)

Repeal the subsection, substitute:

 (4) For the purposes of this section, the indexation factor for a financial year is:

8  Subsection 22‑45(5)

Repeal the subsection.

9  Subsection 22‑45(6)

Omit “mentioned in subsection (4) or (5)”.

10  Application

The amendments of the Private Health Insurance Act 2007 made by this Schedule apply in relation to the 2021‑22 financial year and later financial years.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 12 May 2021

Senate on 15 June 2021]

 

(48/21)

 

Overview

The Private Health Insurance Amendment (Income Thresholds) Act 2021 was enacted by the Parliament of Australia to revise the income thresholds under the Private Health Insurance Act 2007. This legislative amendment aims to adjust the income levels at which certain private health insurance rebates and penalties apply, ensuring that the thresholds remain relevant and equitable in light of economic changes. The Act was assented to on 24 June 2021 and commenced on 1 July 2021, applying to the 2021-22 financial year and subsequent years. By amending the thresholds, the Act seeks to better align the private health insurance system with the current economic landscape, thus achieving a more sustainable and fair healthcare funding structure.

Scope and Application

The Private Health Insurance Amendment (Income Thresholds) Act 2021 amends the Private Health Insurance Act 2007, primarily concerning the income thresholds for determining private health insurance rebates. This Act applies to individuals who hold private health insurance in Australia and their employers, as well as the private health insurance industry. It specifically adjusts the income thresholds for singles, families, and seniors, setting new income levels that will be indexed for future financial years. These changes are applicable from the 2021-22 financial year and extend to subsequent financial years. The Act's provisions are applicable across the Commonwealth of Australia, thereby affecting all states and territories uniformly. There are no explicit exclusions or exemptions mentioned within the primary text of the Act; however, the thresholds may indirectly exclude those with incomes below the specified levels from qualifying for certain rebates or penalties. The Act may also be extended or further defined through subordinate legislation, although this is not detailed within the primary text.

Key Provisions

The Private Health Insurance Amendment (Income Thresholds) Act 2021 (Act) amends the Private Health Insurance Act 2007 by adjusting the income thresholds for private health insurance rebates for individuals. The primary amendments, found in Schedule 1, establish new income thresholds for singles (section 22-35) and modify the indexation process for these thresholds (section 22-45). For the 2021-22 and 2022-23 financial years, the singles tier 1 threshold is set at $90,000, the singles tier 2 threshold at $105,000, and the singles tier 3 threshold at $140,000. These thresholds are subject to indexing for later financial years, which will adjust based on specified indexation factors. The Act imposes specific obligations on individuals regarding their income and its impact on their eligibility for private health insurance rebates. The new thresholds determine whether an individual qualifies for a higher or lower rebate based on their income. The indexation process ensures that these thresholds are periodically adjusted to reflect changes in the cost of living, maintaining the effectiveness of the rebate system. Breach of the provisions in this Act does not directly create criminal or civil offences but impacts the eligibility for private health insurance rebates. The penalties are indirect, as individuals not qualifying for higher rebates due to income exceeding the specified thresholds may face higher out-of-pocket expenses for private health care services. The Act does not specify maximum penalties as it primarily adjusts eligibility criteria rather than introducing sanctions for non-compliance.

Legal classification tags

Area of Law
Consumer Law
Instrument
Act
Concepts
Commencement Provisions
Repeal & Amendment
Indexation
Thresholds

Interactions

Authorises

All Versions

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.