Commonwealth Consolidated Acts

PRIVATE HEALTH INSURANCE (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) ACT 2007 - SCHEDULE 3

Income Tax Assessment Act 1936

1   Paragraph   16(4)(fb)

Repeal the paragraph, substitute:

  (fb)   the Chief Executive Officer of Medicare Australia for the purpose of the administration of the Private Health Insurance Incentives Act 1998 or Part   2 - 2 or 6 - 4 of the Private Health Insurance Act 2007 ;

2   Subsection   159J(6) (paragraph   (aac) of the definition of separate net income )

Omit " Private Health Insurance Incentives Act 1998 ", substitute "Division   26 of the Private Health Insurance Act 2007 ".

3   Subsection   170(10AA) (table item   25)

Repeal the table item, substitute:

4   Subsection   264BB(1)

Omit "health fund", substitute "private health insurer".

Note:   The heading to section   264BB is altered by omitting " health funds " and substituting " private health insurers ".

5   Subsection   264BB(1)

Omit "an appropriate private health insurance policy issued by the fund", substitute "a complying health insurance policy issued by the insurer".

6   Subsection   264BB(2)

Repeal the subsection, substitute:

  (2)   The information that the Commissioner may require the private health insurer to provide includes the following:

  (a)   the name, address and date of birth of each person mentioned in subsection   (1);

  (b)   the membership number of the policy;

  (c)   the name, address and date of birth of any spouse of a person covered by the policy (other than a spouse permanently living separately and apart from the person);

  (d)   whether the policy covers hospital treatment, general treatment or both;

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

  (f)   whether the policy has terminated or been suspended, and, if it has, the date on which it terminated or was suspended;

  (g)   the amount of the premium payable under the policy;

  (h)   the period to which the premium relates;

  (i)   any increase or decrease in the premium;

  (j)   whether a payment in respect of a premium that was due within a period specified by the Commissioner was not paid.

7   Subsection   264BB(4)

Repeal the subsection, substitute:

  (4)   In this section, the following terms have the same meanings as in the Private Health Insurance Act 2007 :

"complying health insurance policy"

"general treatment"

"hospital treatment"

"private health insurer"

Income Tax Assessment Act 1997

7A   Section   13 - 1 (table item headed "private health insurance")

Omit "61 - H", substitute "61 - G".

8   Section   52 - 125

Omit "Chapter   2 of the Private Health Insurance Incentives Act 1998 ", substitute "Division   26 of the Private Health Insurance Act 2007 ".

9   Subdivision   61 - H of Division   61

Repeal the Subdivision, substitute:

Subdivision   61 - G -- Private health insurance offset complementary to Part   2 - 2 of the Private Health Insurance Act 2007

Guide to Subdivision   61 - G

61 - 200   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 having the premium reduced under Division   23 of the Private Health Insurance Act 2007 or receiving a payment under Division   26 of that Act.

Table of sections

Operative provisions

61 - 205   Entitlement to the private health insurance tax offset

61 - 210   Amount of the private health insurance tax offset

61 - 215   Tax offset after a person 65 years or over ceases to be covered by policy

61 - 220   How to work out the incentive amount

Operative provisions

61 - 205   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 2007 - 08 income year or a later income year if:

  (a)   a premium, or an amount in respect of a premium, was paid by you, or by your employer as a * fringe benefit for you, under a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007 ), on or after 1   July 2007; and

  (b)   the premium, or amount in respect of a premium, was paid during the income year; and

  (c)   each person insured under the complying health insurance policy during the period covered by the premium or amount is, for the whole of the time that he or she is insured under the policy during that period, an eligible person within the meaning of section   3 of the Health Insurance Act 1973 , or treated as such because of section   6, 6A or 7 of that Act.

  (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).

  (3)   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 Division   26 of the Private Health Insurance Act 2007 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 Division   23 of that Act.

Note:   In certain circumstances you can get a refund of the tax offset under Division   67.

61 - 210   Amount of the private health insurance tax offset

  (1)   The amount of the * tax offset for an income year is the sum 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 in respect of days in the income year on which no person covered by the policy was aged 65 years or over; and

  (b)   35% 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 in respect of days in the income year on which:

  (i)   at least one person covered by the policy was aged 65 years or over; and

  (ii)   no person covered by the policy was aged 70 years or over; and

  (c)   40% 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 in respect of days in the income year on which at least one person covered by the policy was aged 70 years or over.

  (2)   However, if, before 1   January 1999, a person was registered, or eligible to be registered, under the Private Health Insurance Incentives Act 1997 in respect of the policy for the income year, the amount of the * tax offset for the income year is the greater of:

  (a)   the amount worked out under subsection   (1); and

  (b)   the * incentive amount for the policy for the income year.

  (3)   If, because of the operation of Division   23 of the Private Health Insurance Act 2007 , an amount paid by you, or by your employer as a * fringe benefit for you, under a policy 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 - 215   Tax offset after a person 65 years or over ceases to be covered by policy

  (1)   If:

  (a)   at any time, the amount of a * tax offset in respect of premiums payable under an insurance policy (the original policy ) was 35% or 40% of the premiums payable under the policy because a person aged 65 years or over (the entitling person ) was insured under the original policy; and

  (b)   at that time, another person (other than a dependent child) was insured under the original policy; and

  (c)   the entitling person subsequently ceases to be insured under the policy;

subsections   61 - 210(1) and (2) apply in relation to a complying health insurance policy (whether or not the original policy) under which the other person is insured (other than for the purposes of working out the * incentive amount) as if:

  (d)   the entitling person were also insured under that policy; and

  (e)   the entitling person were the same age as the age at which he or she ceased to be insured under the original policy.

  (2)   Subsection   (1) ceases to apply if a person (other than a dependent child) who was not insured under the original policy at the time the entitling person ceased to be insured under it becomes insured under the complying health insurance policy.

  (3)   Subsection   (1) does not apply if its application would result in the amount of the * tax offset under subsection   61 - 210(1) or (2) being less than it would otherwise have been.

  (4)   Paragraph   (1)(a) applies in relation to an amount of a * tax offset that is 35% or 40% of the premiums payable under an insurance policy whether the tax offset was available under this Subdivision or Subdivision   61 - H as in force before 1   July 2007.

  (5)   In this section:

"complying health insurance policy" has the same meaning as in the Private Health Insurance Act 2007 .

"dependent child" :

  (a)   has the meaning given in the Private Health Insurance Act 2007 ; and

  (b)   in paragraph   (1)(b), in relation to a time before 1   July 2007, includes a dependent child within the meaning of the Private Health Insurance Incentives Act 1998 .

61 - 220   How to work out the incentive amount

  (1)   The incentive amount for a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007 ) for an income year is the amount worked out under this table:

  (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 policy is for part only of the income year, the incentive amount is worked out using this formula:

9A   Application of item   9

The repeal of Subdivision   61 - H of the Income Tax Assessment Act 1997 and the substitution of Subdivision   61 - G by this Schedule apply in relation to the 2007 - 2008 income year and later income years.

9B   Subsection   67 - 25(2)

Repeal the subsection   (including the note), substitute:

Private health insurance

  (2)   Private health insurance tax offsets under Subdivision   61 - G, except those arising under subsection   61 - 205(2), are subject to the refundable tax offset rules.

Note:   Subsection   61 - 205(2) deals with tax offsets for trustees who are assessed and liable to pay tax under section   98 of the Income Tax Assessment Act 1936 .

9C   Subsection   995 - 1(1) (definition of incentive amount )

Omit "section   61 - 345", substitute "section   61 - 220".

Private Health Insurance Act 2007

9D   Section   20 - 1 (note)

Omit "Subdivision   61 - H", substitute "Subdivision   61 - G".

9E   Subsection   26 - 1(4)

Omit "Subdivision   61 - H", substitute "Subdivision   61 - G".

Private Health Insurance Incentives Act 1998

10   Paragraph   4 - 5(1)(a)

Omit "1   July 1998 or a later financial year", substitute "or after 1   July 1998 and before 1   July 2007".

11   Section   11 - 10

Before "You", insert "(1)".

12   At the end of section   11 - 10

Add:

  (2)   However, no - one is eligible to apply for registration under this Division after 30   June 2007.

13   At the end of section   12 - 5

Add:

  (7)   A reduction is not allowable under this section in respect of a premium if the premium is in respect of a financial year, or part of a financial year, beginning on or after 1   July 2007.

14   Subsection   12 - 10(2)

Omit "1   July 1999 or a later financial year", substitute "or after 1   July 1999 and before 1   July 2007".

15   At the end of section   15 - 5

Add:

  (3)   A * health fund may claim reimbursement under this Division only in respect of an amount of premiums that was reduced because of the operation of this Chapter.

16   Subsection   15 - 23(2)

Repeal the subsection, substitute:

  (2)   The application must be made:

  (a)   if the application relates to only one month--before the earlier of:

  (i)   the day that is 3 years after the last day of the month; and

  (ii)   1   July 2008; and

  (b)   if the application relates to more than one month--before the earlier of:

  (i)   the day that is 3 years after the last day of the first of those months; and

  (ii)   1   July 2008.

Taxation Administration Act 1953

17   Section   45 - 340 of Schedule   1 (method statement, step 1, paragraph   (a))

Omit "Subdivision   61 - H", substitute "Subdivision   61 - G".

18   Section   45 - 375 of Schedule   1 (method statement, step 1, paragraph   (a))

Omit "Subdivision   61 - H", substitute "Subdivision   61 - G".