Taxation Laws Amendment (Private Health Insurance) Act 1998
Act No. 128 of 1998 as amended
This compilation was prepared on 6 August 2002
[This Act was amended by Act No. 57 of 2002]
Amendments from Act No. 57 of 2002
[Schedule 12 (item 62) amended Item 4 of Schedule 2
Schedule 12 (item 81) repealed Item 3 of Schedule 1
Schedule 12 (item 62) commenced on 21 December 1998
Schedule 12 (item 78) commenced on 3 July 2002]
Prepared by the Office of Legislative Drafting,
Attorney‑General’s Department, Canberra
Contents
1 Short title...................................
2 Commencement...............................
3 Schedule(s)..................................
Schedule 1—Amendment of the Income Tax Assessment Act 1936
Schedule 2—Amendment of the Income Tax Assessment Act 1997
An Act to amend the law relating to income tax in respect of private health insurance, and for related purposes
[Assented to 21 December 1998]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Taxation Laws Amendment (Private Health Insurance) Act 1998.
2 Commencement
This Act commences on the day on which it receives the Royal Assent.
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Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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—Amendment of the Income Tax Assessment Act 1936
1 At the end of paragraph 16(4)(fb)
Add “or the Private Health Insurance Incentives Act 1998”.
2 Subsection 159J(6) (after paragraph (aab) of the definition of separate net income)
Insert:
(aac) does not include any amount paid under the Private Health Insurance Incentives Act 1998; and
4 Subsection 221YCAA(2A)
After “61‑305”, insert “or 61‑335”.
5 Before section 264C
Insert:
264BB Commissioner may require health funds to provide information
(1) The Commissioner may, by notice in writing, require a health fund to provide information relevant to the operation of this Act about each person who is covered at any time during a financial year specified in the notice by an appropriate private health insurance policy issued by the fund or who paid premiums under such a policy.
(2) The information that the Commissioner may require the health fund to provide includes the following:
(a) the name, address and date of birth of each such person;
(b) the fund membership number of the policy;
(c) the name, address and date of birth of the person covered by the policy whom the health fund treats as the contributor in respect of the policy;
(d) the name, address and date of birth of any person who is a partner of a person covered by the policy;
(e) whether the policy provides hospital cover, ancillary cover or combined cover;
(f) the date on which the policy was issued;
(g) whether the policy has terminated or been suspended, and, if it has, the date on which it terminated or was suspended;
(h) the amount of the premium under the policy;
(i) the period to which the premium relates;
(j) any increase or decrease in the premium;
(k) whether a payment in respect of a premium that was due within a period specified by the Commissioner was not paid.
(3) The information required by a notice under subsection (1) is to be provided:
(a) in a form (including an electronic form) approved by the Commissioner; and
(b) within the period specified in the notice.
(4) In this section, the following terms have the same meanings as in the Private Health Insurance Incentives Act 1998:
ancillary cover |
appropriate private health insurance policy |
combined cover |
health fund |
hospital cover |
partner |
6 Application
The amendments of the Income Tax Assessment Act 1936 made by this Schedule apply to assessments in respect of income for the 1998‑99 year of income and all later years of income.
Schedule 2—Amendment of the Income Tax Assessment Act 1997
1 Subsection 4‑10(3) (step 4 of the method statement)
Omit “(If your total tax offsets exceed your basic income tax liability, you are not entitled to a refund, or to offset the excess against any other liability.)”.
2 Subsection 4‑10(3) (note)
Repeal the note.
3 After subsection 4‑10(3)
Insert:
(3A) If you have a *tax offset that is a private health insurance tax offset and it exceeds your basic income tax liability, you can, after allowing certain other tax offsets, get a refund of the excess under section 67‑25. If the total of your other tax offsets exceeds your basic income tax liability, you are not entitled to a refund or to offset the excess of your other tax offsets against any other liability.
Note: Some tax offsets can be carried forward to a later year. See, for example, section 160AFE of the Income Tax Assessment Act 1936, which deals with the carry forward of excess foreign tax credits.
4 Section 11‑15
After:
persecution victim, pension etc. for | 23(kc) |
insert:
private health insurance | 52‑125 |
5 Section 13‑1 (table item headed “private health insurance”)
Omit “Subdivision 61‑G”, substitute “Subdivisions 61‑G and 61‑H”.
6 Section 52‑1 (at the end of the Table of Subdivisions)
Add:
52‑D Exempt payments made by the Commonwealth to reimburse certain expenditure
7 Subdivision 52‑D (heading)
Repeal the heading, substitute:
Subdivision 52‑D—Exempt payments made by the Commonwealth to reimburse certain expenditure
8 At the end of Subdivision 52‑D
Add:
52‑125 Private health insurance incentive payments are exempt
A payment made to you under Chapter 2 of the Private Health Insurance Incentives Act 1998 is exempt from income tax.
9 Subdivision 61‑G (heading)
Repeal the heading, substitute:
Subdivision 61‑G—Private health insurance offset complementary to Private Health Insurance Incentives Act 1997
10 At the end of Subdivision 61‑G
Omit:
[The next Division is Division 65.]
11 After Subdivision 61‑G
Insert:
Subdivision 61‑H—Private health insurance offset complementary to Private Health Insurance Incentives Act 1998
Guide to Subdivision 61‑H
61‑330 What this Subdivision is about
You can choose to claim a tax offset for a premium, or an amount in respect of a premium, paid under a private health insurance policy instead of receiving a payment under Chapter 2 of the Private Health Insurance Incentives Act 1998.
Table of sections
Operative provisions
61‑335 Entitlement to the private health insurance tax offset
61‑340 Amount of the private health insurance tax offset
61‑345 How to work out the incentive amount
Operative provisions
61‑335 Entitlement to the private health insurance tax offset
(1) If you are an individual (other than an individual in the capacity of an employer), you are entitled to a *tax offset for the 1998‑99 income year or a later income year if the conditions in subsections (2) and (3) are satisfied.
(2) A premium, or an amount in respect of a premium, was paid by you, or by your employer as a *fringe benefit for you, whether before or after the commencement of this Subdivision, under an appropriate private health insurance policy (within the meaning of the Private Health Insurance Incentives Act 1998) for the 1998‑99 income year or a later income year.
(3) The premium, or amount in respect of a premium, was paid during the income year or, for the 1998‑99 income year, before or during that year.
(4) You are also entitled to the *tax offset if:
(a) you are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust estate; and
(b) the beneficiary who is presently entitled to the share of the income of the trust estate would be entitled to the tax offset because of subsection (1).
(5) However, you are not entitled to the *tax offset in respect of the payment of any premium, or any amount in respect of a premium, if:
(a) you have received an amount under Chapter 2 of the Private Health Insurance Incentives Act 1998 in relation to the payment; or
(b) the premium, or the amount in respect of a premium, was less than it would otherwise have been because of the operation of Chapter 3 of that Act.
(6) The *tax offset is subject to the refundable tax offset rules in Division 67.
Note: This means that, in certain circumstances, you can get a refund of the tax offset.
61‑340 Amount of the private health insurance tax offset
(1) The amount of the *tax offset for a premium, or an amount in respect of a premium, paid under a policy for the 1998‑99 income year depends upon whether or not a person was registered, or eligible to apply for registration, before 1 January 1999 under the Private Health Insurance Incentives Act 1997 in respect of the policy for the income year.
(2) If no person was so registered or eligible to apply for registration, the amount of the *tax offset is 30% of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the policy for the income year.
(3) If a person was so registered or eligible to apply for registration, the amount of the *tax offset is the greater of the amount worked out under paragraph (a) and the amount worked out under paragraph (b):
(a) 30% of:
(i) the amount of the premium, or the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the policy for the income year; or
(ii) if, because of the operation of the Private Health Insurance Incentives Act 1997, that amount was less than the amount that would otherwise have been payable—the amount that would otherwise have been payable; and
(b) the incentive amount for the policy for the income year.
(4) The amount of the *tax offset for a premium, or an amount in respect of a premium, paid under a policy for a later income year depends upon whether or not a person was registered, or eligible to apply for registration, before 1 January 1999 under the Private Health Insurance Incentives Act 1997 in respect of the policy for the 1998‑99 income year.
(5) If no person was so registered or eligible to apply for registration, the amount of the *tax offset is 30% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the policy for the later income year.
(6) If a person was so registered or eligible to apply for registration, the amount of the *tax offset is the greater of:
(a) 30% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the policy for the later income year; and
(b) the incentive amount for the policy for the later income year.
(7) In working out an amount of a *tax offset for an amount paid by you, or by your employer as a *fringe benefit for you, under a policy, disregard any part of the amount paid that relates to a period before 1 January 1999.
(8) If, because of the operation of the Private Health Insurance Incentives Act 1997, an amount paid by you, or by your employer as a *fringe benefit for you, under a policy for a period after 31 December 1998 was less than the amount that would otherwise have been payable, the *tax offset in respect of the amount paid is reduced by the amount of the difference.
61‑345 How to work out the incentive amount
(1) The incentive amount for an appropriate private health insurance policy for an income year is worked out in accordance with the following table:
Incentive amounts | ||||
Item | Number and kinds of people covered by the policy | Policy provides *hospital cover but not *ancillary cover | Policy provides *ancillary cover but not *hospital cover | Policy provides *combined cover |
1 | 3 or more people | $350 | $100 | $450 |
2 | One dependent child and one other person | $350 | $100 | $450 |
3 | 2 people neither of whom is a dependent child | $200 | $50 | $250 |
4 | One person | $100 | $25 | $125 |
(2) If the amount of the premium, or the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the appropriate private health insurance policy is for part only of the income year, the incentive amount is worked out using the following formula:
[The next Division is Division 65.]
12 Subsection 65‑25(2) (before table item 1)
Insert:
1A | Private health insurance tax offset | Subdivision 61‑H |
13 At the end of Division 65
Omit:
[The next Part is Part 2‑25.],
substitute:
[The next Division is Division 67.].
14 After Division 65
Insert:
Division 67—Refundable tax offset rules
Guide to Division 67
67‑10 What this Division is about
This Division sets out the rules about refunds of tax offsets
Table of sections
Operative provisions
67‑20 Which tax offsets this Division applies to
67‑25 When you can get a refund of a tax offset
[This is the end of the guide.]
Operative provisions
67‑20 Which tax offsets this Division applies to
This Division only applies to a *tax offset if it is stated to be subject to the refundable tax offset rules.
Note: The only tax offset that is subject to these rules is the private health insurance tax offset under Subdivision 61‑H.
67‑25 When you can get a refund of a tax offset
(1) You can get a refund of a *tax offset if the amount of the tax offset exceeds the amount of income tax that you would have to pay if:
(a) you had not got the tax offset; and
(b) you had not got any tax offsets that are of a higher priority.
(2) The following table sets out the order of priority for *tax offsets (with the highest priority shown first):
Priority of tax offsets (highest to lowest) | ||
Item | Tax offset | Relevant person |
1 | private health insurance tax offset | Subdivision 61‑H |
2 | all other tax offsets | listed in section 13‑1 or referred to in section 160AFE of the Income Tax Assessment Act 1936 |
67‑30 Amount of refund
The amount of the refund of a *tax offset is the amount of the excess referred to in subsection 67‑25(1).
[The next Part is Part 2‑25.]
15 Subsection 995‑1(1)
Insert:
incentive amount has the meaning given by section 61‑345.
16 Application
The amendments of the Income Tax Assessment Act 1997 made by this Schedule apply to assessments in respect of income for the 1998‑99 income year and all later income years.
[Minister’s second reading speech made in—
House of Representatives on 12 November 1998
Senate on 30 November 1998]
(178/98)