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Act No. 56 of 1997 as made
An Act to amend the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, and for related purposes
Administered by: Treasury
Originating Bill: Taxation Laws Amendment (Private Health Insurance Incentives) Bill 1996 [1997]
Date of Assent 30 Apr 1997
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016
Table of contents.

 

 

 

 

Taxation Laws Amendment (Private Health Insurance Incentives) Act 1997

 

No. 56, 1997

 

 

 

 

An Act to amend the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, and for related purposes

  


Contents

1............ Short title............................................................................................

2............ Commencement..................................................................................

3............ Schedule(s)..........................................................................................

Schedule 1—Amendments relating to increases in the medicare levy    

Income Tax Assessment Act 1936                                                                             

Schedule 2—Amendments relating to the private health insurance tax offset         

Income Tax Assessment Act 1936                                                                             

Income Tax Assessment Act 1997                                                                             

Schedule 3—Amendments relating to rebate for medical expenses     

 


Taxation Laws Amendment (Private Health Insurance Incentives) Act 1997

No. 56, 1997

 

 

An Act to amend the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, and for related purposes

[Assented to 30 April 1997]

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Taxation Laws Amendment (Private Health Insurance Incentives) Act 1997.

2  Commencement

             (1)  Subject to this section, this Act commences on the day on which it receives the Royal Assent.

             (2)  Schedule 1 (other than item 2) commences on 1 July 1997.

             (3)  Item 2 of Schedule 1 is taken to have commenced on 1 July 1994.

             (4)  Schedule 2 commences on 1 July 1997, immediately after the commencement of the Income Tax Assessment Act 1997.

3  Schedule(s)

                   Subject to section 2, 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 1Amendments relating to increases in the medicare levy

Income Tax Assessment Act 1936

1  Paragraph 221YCAA(2)(c)

After “Medicare Levy Act 1986”, insert “(other than sections 8B, 8C, 8D, 8E, 8F and 8G)”.

2   Subsection 251S(1A)

Omit “section 159SB”, substitute “section 159SA”.

3  Section 251T

After “levy”, insert “(other than an increase in the levy payable under section 8B, 8C, 8D, 8E, 8F or 8G of the Medicare Levy Act 1986)”.

Note:       The heading to section 251T is altered by inserting “(other than certain levy increases)” after “Levy”.

4  After section 251U

Insert:

251V  Subsections 251R(4), (5), (6B), (6C) and (6D) not to apply to certain medicare levy increases

             (1)  This section applies to a person during a period if, apart from this section, another person would be taken under subsection 251R(4), (5), (6B), (6C) or (6D) not to have been a dependant of the first‑mentioned person during the period.

             (2)  For the purposes of working out the amount of the increase in the levy (if any) payable by:

                     (a)  the first-mentioned person under section 8B, 8C or 8D of the Medicare Levy Act 1986; or

                     (b)  a trustee under section 8E, 8F or 8G of that Act in relation to a share of the net income of the trust estate to which the first‑mentioned person is presently entitled;

subsection 251R(4), (5), (6B), (6C) or (6D), as the case requires, does not apply to the other person.

251VA  Subsection 251U(3) not to apply for certain medicare levy increases

             (1)  This section applies to a person, whether or not the person is a person to whom section 251V applies, during a period if, apart from this section, the person would be taken under subsection 251U(3) to be a prescribed person during one-half of the period.

             (2)  For the purposes of working out the amount of the increase in the levy (if any) payable by:

                     (a)  the person under section 8B, 8C or 8D of the Medicare Levy Act 1986; or

                     (b)  a trustee under section 8E, 8F or 8G of that Act in relation to a share of the net income of the trust estate to which the person is presently entitled;

the person is taken not to be a prescribed person during the whole of the period.

5  Application

The amendments made by this Schedule (other than item 2) apply to assessments in respect of income for the 1997-98 year of income and all later years of income.


 

Schedule 2Amendments relating to the private health insurance tax offset

Income Tax Assessment Act 1936

1  After paragraph 16(4)(fa)

Insert:

                    (fb)  the Health Insurance Commission for the purpose of the administration of the Private Health Insurance Incentives Act 1997;

2  At the end of paragraph 26(b)

Add “; and”.

3  At the end of paragraphs 26(e) to (jb)

Add “and”.

4  At the end of section 26

Add:

            ; and (m)  an amount paid under section 8-3 of the Private Health Insurance Incentives Act 1997 to a health fund (within the meaning of that Act).

5  After subsection 221YCAA(2)

Insert:

          (2A)  For the purposes of paragraph (2)(m), a tax offset under section 61-305 of the Income Tax Assessment Act 1997 is not to be taken to be a rebate.

6  After section 264A

Insert:

264B  Commissioner may require health funds to provide information

             (1)  The Commissioner may, by notice in writing, require a health fund to provide information about each person covered by a private health insurance policy at any time during a financial year.

             (2)  The information that the Commissioner may require the health fund to provide is as follows:

                     (a)  the name, address and date of birth of each such person;

                     (b)  the fund membership number of the policy;

                     (c)  whether the policy concerned covers only one person or covers more than one person;

                     (d)  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;

                     (e)  whether any of the persons covered by the policy are dependent children;

                      (f)  the name, address and date of birth of any person who is a partner of a person covered by the policy;

                     (g)  the name, address and date of birth of any person who paid premiums under the policy;

                     (h)  whether the policy provides hospital cover or ancillary cover;

                      (i)  the date on which the policy was issued;

                      (j)  whether the policy has terminated, and, if it has, the date on which it terminated;

                     (k)  the amount (if any) by which the premium in respect of the policy has been reduced for that financial year because of the operation of the Private Health Insurance Incentives Act 1997.

             (3)  The information required under subsection (2) is to be supplied:

                     (a)  in a form (including an electronic form) approved by the Commissioner; and

                     (b)  within the period specified by the Commissioner.

             (4)  In this section, the following terms have the same meanings as in the Private Health Insurance Incentives Act 1997:

 

ancillary cover;

dependent child;

health fund;

hospital cover;

partner;

private health insurance policy.

Income Tax Assessment Act 1997

7  Section 13-1 (table, after item headed “primary production”)

Insert:

private health insurance

 

.......................................................................................................

Subdivision
61-G

8  After section 43-260

Insert:

Part 2-20Tax offsets

Division 61Generally applicable tax offsets

Subdivision 61-GPrivate health insurance tax offset

Guide to Subdivision 61-G

61-300  What this Subdivision is about

You can choose to claim a tax offset for premiums paid under private health insurance policies, instead of having premiums reduced under the Private Health Insurance Incentives Act 1997.

Table of sections

Operative provisions

61-305      Entitlement to the private health insurance tax offset

61-310      Amount of the private health insurance tax offset

61-315      Priority between different taxpayers

61-320      Priority agreements

Operative provisions

61-305  Entitlement to the private health insurance tax offset

             (1)  You are entitled to a *tax offset for an income year in respect of premiums paid under a private health insurance policy (within the meaning of the Private Health Insurance Incentives Act 1997) if:

                     (a)  the policy was one in respect of which you were eligible under Division 3 of the Private Health Insurance Incentives Act 1997 to participate in the incentives scheme (within the meaning of that Act); or

                     (b)  the policy was one in respect of which another person was so eligible, but your taxable income for that year was required by subsection 3-3(2) or 3-4(2) of that Act to be taken into account for the purpose of determining whether the other person was so eligible.

             (2)  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) if his or her taxable income for the income year were limited to that share.

             (3)  However:

                     (a)  you are not entitled to the *tax offset in respect of any premiums that were reduced under section 5-1 of the Private Health Insurance Incentives Act 1997; and

                     (b)  you are not entitled to the tax offset in respect of any premiums in respect of which another person’s entitlement to the tax offset has priority under section 61-315; and

                     (c)  if, on a day during the income year, the policy ceased to be a dependent child policy (within the meaning of section 5-4 of that Act)—you are not entitled to the tax offset in respect of premiums to the extent that they relate to a part of the income year occurring after that day; and

                     (d)  if all of the persons covered by the policy were dependent children at any time during the income year—you are not entitled to the tax offset unless your taxable income for that year was required by subsection 3-3(2) or 3-4(2) of that Act to be taken into account in applying the income test under section 3‑3 or 3-4 of that Act.

61-310  Amount of the private health insurance tax offset

             (1)  The amount of the *tax offset is:

                     (a)  if the premiums in respect of which you are entitled to the tax offset cover the whole of the income year—the annual incentive amount for the private health insurance policy in question; or

                     (b)  if those premiums cover only part of the income year—the amount worked out as follows:

             (2)  In subsection (1):

annual incentive amount means the annual incentive amount for the private health insurance policy under section 5-3 of the Private Health Insurance Incentives Act 1997.

             (3)  However, if 2 or more persons are entitled to the *tax offset in respect of those premiums, each person having made payments in respect of those premiums, the amount of the tax offset is the amount worked out as follows:

             (4)  For the purposes of subsection (3), a payment made jointly in respect of a premium by 2 or more persons is taken to be a separate payment, made by each of them, of an amount equal to the joint payment divided by the number of persons who made it.

             (5)  For the purposes of subsection (3), if:

                     (a)  2 or more persons are entitled to the *tax offset in respect of those premiums; and

                     (b)  payments have been made in respect of those premiums by another person who is not entitled to the tax offset;

each of the persons entitled to the tax offset is taken to have made a payment in respect of those premiums of an amount equal to the amount of the payments made by the other person divided by the number of persons entitled to the tax offset.

61-315  Priority between different taxpayers

             (1)  This section establishes the priority of entitlements to the *tax offset if more than one person would, apart from paragraph 61‑305(3)(b), be entitled to the tax offset in respect of the same premiums paid under a private health insurance policy (within the meaning of the Private Health Insurance Incentives Act 1997).

Note:          See paragraph 61-305(3)(b) for the significance of priority of entitlements.

             (2)  All of the persons who would, apart from paragraph 61-305(3)(b), be entitled to the *tax offset in respect of those premiums may make an agreement (a priority agreement) in respect of the income year specifying one of them as the person whose entitlement is to have priority.

Note:          Section 61-320 contains further provisions about priority agreements.

             (3)  That person’s entitlement in respect of those premiums has priority over the entitlements of all of the others.

             (4)  If:

                     (a)  a *priority agreement is not made in respect of the income year; and

                     (b)  one of the persons who would, apart from paragraph 61‑305(3)(b), be entitled to the *tax offset in respect of those premiums has made payments in respect of those premiums; and

                     (c)  another of the persons who would, apart from paragraph 61‑305(3)(b), be entitled to the tax offset in respect of those premiums has not made payments in respect of those premiums;

the entitlement of the person who made those payments has priority over the entitlement of the person who has not.

             (5)  If:

                     (a)  a *priority agreement is not made in respect of the income year; and

                     (b)  none of the persons who would, apart from paragraph 61‑305(3)(b), be entitled to the *tax offset in respect of those premiums has made payments in respect of those premiums;

the entitlement of the contributor in respect of the private health insurance policy has priority over the entitlement of each person other than the contributor.

             (6)  In subsection (5):

contributor means the person who is treated as the contributor by the health fund (within the meaning of the Private Health Insurance Incentives Act 1997) that issued the private health insurance policy.

             (7)  Despite paragraph 61-305(3)(b) and subsections (3), (4) and (5) of this section, the entitlement to the *tax offset of either of the following persons in respect of those premiums:

                     (a)  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;

                     (b)  the beneficiary who is presently entitled to the share of the income of the trust estate;

is not affected by the other person’s entitlement to the tax offset in respect of those premiums having priority.

61-320  Priority agreements

             (1)  A *priority agreement has no effect unless it is made on or before:

                     (a)  the day on which the first *income tax return of any of the persons who made the agreement was lodged for the income year in respect of which the agreement was made; or

                     (b)  such later day as the Commissioner allows.

             (2)  A *priority agreement has no effect, and is taken never to have had effect, if none of the persons who made the agreement retain the agreement for the period of 5 years starting on the day on which the agreement was made.

             (3)  If the *priority agreement is lost or destroyed and the Commissioner is satisfied that one of the persons who made the agreement has a document (the substitute priority agreement) that:

                     (a)  is a copy of the priority agreement; or

                     (b)  properly records all the matters set out in the priority agreement and was in existence when the priority agreement was lost or destroyed;

the substitute priority agreement is taken, for the purposes of this Subdivision, to be, and to have been at all times after the priority agreement was lost or destroyed, the priority agreement.

             (4)  If:

                     (a)  the *priority agreement is lost or destroyed; and

                     (b)  the Commissioner is satisfied that the loss or destruction occurred because of circumstances beyond the control of the persons who made the agreement; and

                     (c)  subsection (3) does not apply;

the agreement is not affected, and is taken never to have been affected, by subsection (2).

             (5)  Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment at any time for the purposes of giving effect to this section.

9  Subsection 995-1(1)

Insert:

priority agreement has the meaning given by subsection 61‑315(2).

10  Application

(1)        The amendments of the Income Tax Assessment Act 1936 apply to assessments in respect of income for the 1997-98 year of income and all later years of income.

(2)   The amendments of the Income Tax Assessment Act 1997 apply to assessments in respect of income for the 1997-98 income year and all later income years.


 

Schedule 3Amendments relating to rebate for medical expenses

1  Paragraph 159P(3A)(b)

Omit “$1,000”, substitute “$1,250”.

2  Application

The amendment made by this Schedule applies to assessments in respect of the 1996-97 year of income and for all later years of income.

 

 

[Minister’s second reading speech made in—

House of Representatives on 13 December 1996

Senate on 27 February 1997]

 

 

 

(152/96)

  

I HEREBY CERTIFY that the above is a fair print of the Taxation Laws Amendment (Private Health Insurance Incentives) Bill 1997 which originated in the House of Representatives as the Taxation Laws Amendment (Private Health Insurance Incentives) Bill 1996 and has been finally passed by the Senate and the House of Representatives.

 

 

 

Clerk of the House of Representatives

 

IN THE NAME OF HER MAJESTY, I assent to this Act.

 

 

 

Governor-General

1997

 

(152/96)