Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013

Administered by Department of Health, Disability and Ageing

Legislation au C2013A00105 In force Act

Legislation content

 

 

 

 

 

 

Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013

 

No. 105, 2013

 

 

 

 

 

An Act to amend the law relating to private health insurance, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Lifetime health cover loading

Part 1—Main amendments

Private Health Insurance Act 2007

Part 2—Consequential amendments

Income Tax Assessment Act 1936

Part 3—Application provision

Schedule 2—Incentive payments scheme

Part 1—Main amendments

Private Health Insurance Act 2007

Part 2—Consequential amendments

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Part 3—Saving provisions

 

 

 

Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013

No. 105, 2013

 

 

 

An Act to amend the law relating to private health insurance, and for related purposes

[Assented to 29 June 2013]

 

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013.

2  Commencement

  This Act commences on 1 July 2013.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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

Part 1—Main amendments

Private Health Insurance Act 2007

1  Before subsection 22‑15(2)

Insert:

Private health insurance tiers

2  At the end of section 22‑15

Add:

Lifetime health cover loading

 (6) For the purposes of applying paragraphs (1)(a), (b) and (c), reduce the amount of the premium, or the amount in respect of a premium, by any part of that amount that is attributable to an increase in the premium in accordance with Division 34.


Part 2—Consequential amendments

Income Tax Assessment Act 1936

3  After paragraph 264BB(2)(gb)

Insert:

 (gc) whether the premium has been increased in accordance with Division 34 of the Private Health Insurance Act 2007, and if so, the amount of the increase;


Part 3—Application provision

4  Application provision

The amendment made by item 2 applies in relation to a premium, or an amount in respect of a premium, paid on or after 1 July 2013 under a complying health insurance policy, to the extent that the premium or amount relates to one or more days that are on or after 1 July 2013.


Schedule 2—Incentive payments scheme

Part 1—Main amendments

Private Health Insurance Act 2007

1  Paragraph 3‑5(b)

Repeal the paragraph.

2  Section 15‑1

Omit:

 (b) payments in return for payments of premiums under complying health insurance policies (see Division 26);

3  Part 2‑2 (heading)

Repeal the heading, substitute:

Part 2‑2—Premiums reduction scheme

4  Section 20‑1

Repeal the section, substitute:

20‑1  What this Part is about

To encourage people to take out, and continue to hold, private health insurance, this Part provides that people may reduce the premiums payable for their complying health insurance policies by participating in the premiums reduction scheme in Division 23.

Note: The premiums reduction scheme is complemented by the private health insurance offset provided for by Subdivision 61‑G of the Income Tax Assessment Act 1997.

5  Section 20‑5

Omit “and the *incentive payments scheme”.

6  Division 26

Repeal the Division.

7  Paragraph 206‑1(1)(a)

Repeal the paragraph.

8  Section 230‑1

Omit:

 (c) deals with some general administrative matters relating to the incentives schemes in Part 2‑2;

substitute:

 (c) deals with some general administrative matters relating to the premiums reduction scheme in Part 2‑2;

9  Part 6‑4 (heading)

Repeal the heading, substitute:

Part 6‑4—Administration of premiums reduction scheme

10  Section 276‑1

Omit “and an incentives payment scheme”.

11  Section 276‑1

Omit “schemes”, substitute “scheme”.

12  Division 279 (heading)

Repeal the heading, substitute:

Division 279—Reimbursement of participating insurers and powers of Chief Executive Medicare

13  Division 282 (heading)

Repeal the heading, substitute:

Division 282—Recovery of amounts and other matters

14  Paragraphs 282‑1(1)(a), (b) and (c)

Repeal the paragraphs.

15  Paragraph 282‑1(2)(a)

Repeal the paragraph.

16  Paragraph 282‑15(1)(a)

Repeal the paragraph, substitute:

 (a) a decision that an amount is recoverable as a debt due to the Commonwealth under paragraph 282‑1(1)(h) in respect of a payment made to an individual;

17  Subsection 282‑18(1)

Repeal the subsection, substitute:

 (1) This section applies if the amount of a premium payable during a financial year under a *complying health insurance policy is reduced because of the operation or purported operation of Division 23.

18  Subsection 282‑18(2)

Omit “(if any) and payment (if any)”.

19  Section 328‑5 (table item 3)

Repeal the item.

20  Section 328‑5 (table item 40)

Repeal the item.

21  Clause 1 of Schedule 1 (definition of incentive payments scheme)

Repeal the definition.


Part 2—Consequential amendments

Income Tax Assessment Act 1997

22  Section 11‑15 (table item headed “social security or like payments”)

Omit:

private health insurance......................

52‑125

23  Subdivision 52‑D

Repeal the Subdivision.

24  Section 61‑200

Omit “or receiving a payment under Division 26 of that Act”.

25  Subsection 61‑210(2)

Repeal the subsection, substitute:

Reduction because PHII benefit received in another form

 (2) Subsections (3), (4) and (5) apply if the amount of the premium was reduced because of the operation or purported operation of Division 23 of the Private Health Insurance Act 2007.

26  Subsection 61‑210(3)

Omit “(if any) and payment (if any)”.

Taxation Administration Act 1953

27  Subsection 355‑65(2) in Schedule 1 (table item 8)

Omit “premiums reduction and incentive payment schemes) or 6‑4 (about administration of those schemes)”, substitute “premiums reduction scheme) or 6‑4 (about administration of that scheme)”.


Part 3—Saving provisions

28  Saving provisions

(1) Despite the amendments made by items 6 and 19, Division 26 and section 328‑5 of the Private Health Insurance Act 2007 (as in force immediately before the commencement of those items) continue to apply on and after that commencement in relation to claims made under section 26‑10 of that Act before that commencement.

(2) Despite the amendments made by items 13 to 18 and 20, Division 282 and section 328‑5 of the Private Health Insurance Act 2007 (as in force immediately before the commencement of those items) continue to apply on and after that commencement in relation to payments made under Division 26 of that Act before, on or after that commencement.

(3) Despite the amendments made by items 23, 25 and 26, Subdivision 52‑D and section 61‑210 of the Income Tax Assessment Act 1997 (as in force immediately before the commencement of those items) continue to apply on and after that commencement in relation to payments made under Division 26 of the Private Health Insurance Act 2007 before, on or after that commencement.

(4) Despite the amendment made by item 27, table item 8 in subsection 355‑65(2) in Schedule 1 to the Taxation Administration Act 1953 (as in force immediately before the commencement of this item) continues to apply on and after that commencement in relation to the making of records or disclosures on or after that commencement.

[Minister’s second reading speech made in—

House of Representatives on 28 November 2012

Senate on 17 June 2013]

(211/12)

 

Overview

The Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013 was enacted by the Parliament of Australia to address various issues within the existing private health insurance framework. The primary objective of this legislation was to amend the Private Health Insurance Act 2007 by introducing significant changes to the Lifetime Health Cover loading and the incentive payments scheme. The Act also made consequential amendments to other related Acts, such as the Income Tax Assessment Act 1936 and the Taxation Administration Act 1953, to ensure consistency and effectiveness of the changes across the legislative landscape. The Act was designed to streamline and enhance the incentives for individuals to maintain private health insurance coverage, thereby encouraging better health outcomes and reducing the financial burden on the public healthcare system.

Scope and Application

The Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013 amends the Private Health Insurance Act 2007 and related legislation to implement significant changes to the private health insurance system in Australia. This Act applies to individuals and entities involved in the provision of private health insurance policies in Australia, including health insurers and policyholders. The Act introduces changes to the lifetime health cover loading mechanism, adjusts the thresholds for premium increases, and modifies the incentive payments scheme to a premiums reduction scheme. The Act applies nationally across Australia and the changes it enacts affect premiums paid under complying health insurance policies from 1 July 2013 onwards. The Act includes specific saving provisions that ensure transitional arrangements for claims and payments made under the old incentive payments scheme before the Act's commencement. Additionally, the application of the Act can be extended or restricted through subordinate instruments, which may provide further details or clarifications on the implementation of the amended provisions.

Key Provisions

The Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Act 2013 makes several significant amendments to the Private Health Insurance Act 2007. One of the primary changes introduced by the Act is the establishment of private health insurance tiers, which are intended to reduce the amount of the premium for certain individuals by any part of the premium attributable to an increase under Division 34 (Section 22-15(6)). This amendment applies to premiums paid on or after 1 July 2013 under a complying health insurance policy. Another key change is the introduction of the Lifetime Health Cover Loading, which is intended to encourage people to take out and continue to hold private health insurance (Section 22-15). The Act also makes consequential amendments to the Income Tax Assessment Act 1936 and other related legislation. Under this Act, private health insurers are required to apply the Lifetime Health Cover Loading when calculating premiums, and to reduce the premium by any part attributable to an increase under Division 34 (Section 22-15(6)). The Act further mandates that insurers provide information about the loading to the Commonwealth and to policyholders (Section 264BB(2)(gc)). These obligations are designed to ensure that the loading is properly calculated and communicated, thereby encouraging individuals to maintain their private health insurance coverage. The Act imposes several potential penalties and consequences for breaches of its provisions. While the Act does not explicitly detail the penalties for non-compliance, breaches of the Private Health Insurance Act 2007 generally may result in significant financial penalties. For instance, under Section 224 of the Private Health Insurance Act 2007, a person who contravenes certain provisions of the Act may be liable to a penalty of up to 50 penalty units (currently AUD 11,000) for a corporation and up to 5 penalty units (currently AUD 1,100) for an individual. In addition, the Act may also lead to civil or criminal consequences for more severe breaches, such as fraud or misrepresentation, which could result in substantial fines or imprisonment. The exact penalties would depend on the specific nature and severity of the breach.

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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.