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Fairer Private Health Insurance Incentives Bill 2009

Schedule 1 Amendments

   

Income Tax Assessment Act 1936

1  After paragraph 264BB(2)(g)

Insert:

                    (ga)  whether the premium has been reduced under section 23-1 of the Private Health Insurance Act 2007 , and if so, the amount of the reduction;

                   (gb)  the name, address and date of birth of a participant (within the meaning of the Private Health Insurance Act 2007 ) in the premiums reduction scheme (within the meaning of that Act) in respect of the policy;

Income Tax Assessment Act 1997

2  Subsection 61-205(3)

Omit “if”, substitute “to the extent that”.

3  Paragraph 61-205(3)(b)

Omit “was less than it would otherwise have been”, substitute “was reduced”.

4  After subsection 61-210(1)

Insert:

          (1A)  Reduce the amount of each percentage mentioned in subsection (1) by 10 percentage points if you are a * tier 1 earner for the income year.

          (1B)  Reduce the amount of each percentage mentioned in subsection (1) by 20 percentage points if you are a * tier 2 earner for the income year.

          (1C)  If you are a * tier 3 earner for the income year:

                     (a)  reduce the amount of each percentage mentioned in subsection (1) to nil; and

                     (b)  do not apply subsection (2).

5  Subsection 61-210(2)

Omit “However,”, substitute “Despite subsections (1), (1A) and (1B),”.

6  Paragraph 61-210(2)(a)

Omit “under subsection (1)”, substitute “under subsection (1) (taking into account any reduction under subsection (1A) or (1B))”.

7  Subsection 61-210(3)

Omit “the difference”, substitute “the difference (but not below nil)”.

8  Paragraph 61-215(1)(a)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 61-210(1A) or (1B))”.

9  Subsection 61-215(4)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 61-210(1A) or (1B))”.

10  At the end of Subdivision 61-G

Add:

61-225   Private health insurance tiers

Families

             (1)  The following table applies to you for an income year if:

                     (a)  on the last day of the year, you are married (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 ); or

                     (b)  on any day in the year, you contribute in a substantial way to the maintenance of a dependent child (within the meaning of the Private Health Insurance Act 2007 ) who is:

                              (i)  your * child; or

                             (ii)  your sibling (including your half-brother, half-sister, adoptive brother, adoptive sister, step-brother, step-sister, foster-brother or foster-sister) who is dependent on you for economic support:

 

Private health insurance tiers—families

Item

For the year, you are a ...

if your * income for surcharge purposes for the year exceeds the following for the year ...

but does not exceed the following (if applicable) for the year ...

1

tier 1 earner

your * family tier 1 threshold

your * family tier 2 threshold.

2

tier 2 earner

your * family tier 2 threshold

your * family tier 3 threshold.

3

tier 3 earner

your * family tier 3 threshold

not applicable.

             (2)  For the purposes of subsection (1), if paragraph (1)(a) applies, treat the * income for surcharge purposes for the year of the person to whom you are married (as mentioned in that paragraph) as included in your income for surcharge purposes for the year.

Singles

             (3)  The following table applies to you for an income year if the table in subsection (1) does not apply to you for the year:

 

Private health insurance tiers—singles

Item

For the year, you are a ...

if your * income for surcharge purposes for the year exceeds the following for the year ...

but does not exceed the following (if applicable) for the year ...

1

tier 1 earner

your * singles tier 1 threshold

your * singles tier 2 threshold.

2

tier 2 earner

your * singles tier 2 threshold

your * singles tier 3 threshold.

3

tier 3 earner

your * singles tier 3 threshold

not applicable.

61-230   Private health insurance singles thresholds

             (1)  Your singles tier 1 threshold for the 2008-09 income year is $70,000. This amount is indexed annually.

             (2)  Your singles tier 2 threshold for the 2010-11 income year is $90,000. This amount is indexed annually.

             (3)  Your singles tier 3 threshold for the 2010-11 income year is $120,000. This amount is indexed annually.

Note:          Subdivision 960-M shows you how to index amounts.

61-235   Private health insurance family thresholds

             (1)  Your family tier 1 threshold for an income year is an amount equal to double your * singles tier 1 threshold for the year.

             (2)  Your family tier 2 threshold for an income year is an amount equal to double your * singles tier 2 threshold for the year.

             (3)  Your family tier 3 threshold for an income year is an amount equal to double your * singles tier 3 threshold for the year.

             (4)  However, if you have 2 or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 ) who are * children, increase your family tier 1 threshold , family tier 2 threshold and family tier 3 threshold for the income year by the result of the following formula:

Example:    If you have 3 such dependants who are children, your family tier 2 threshold for the 2010-11 income year is:

11  Section 960-265 (at the end of the table)

Add:

14

Private health insurance offset—singles tier 1 threshold

subsection 61-230(1)

15

Private health insurance offset—singles tier 2 threshold and singles tier 3 threshold

subsections 61-230(2) and (3)

12  At the end of section 960-270

Add:

             (4)  This section does not apply in relation to amounts mentioned in the provisions listed at items 14 and 15 in section 960-265.

Note:          For the indexation of those amounts, see section 960-290.

13  At the end of section 960-275

Add:

             (7)  This section does not apply in relation to amounts mentioned in the provisions listed at items 14 and 15 in section 960-265.

Note:          For the indexation of those amounts, see section 960-290.

14  At the end of section 960-280

Add:

Exception—private health insurance thresholds

             (7)  This section does not apply in relation to amounts mentioned in the provisions listed at items 14 and 15 in section 960-265.

Note:          For the indexation of those amounts, see section 960-290.

15  At the end of Subdivision 960-M

Add:

960-290   Indexation—private health insurance thresholds

             (1)  This section applies in relation to an amount mentioned in a provision listed at item 14 or 15 in section 960-265.

Indexing amounts

             (2)  You index the amount by:

                     (a)  firstly:

                              (i)  if the amount is mentioned in item 14 in section 960-265 (singles tier 1 threshold)—multiplying the amount for the 2008-2009 income year by its * indexation factor mentioned in subsection (4); or

                             (ii)  if the amount is mentioned in item 15 in section 960-265 (singles tier 2 threshold or singles tier 3 threshold)—multiplying the amount for the 2010-2011 income year by its indexation factor mentioned in subsection (5); and

                     (b)  next, rounding the result in paragraph (a) down to the nearest multiple of $1,000.

Example 1: If the amount to be indexed is $90,000 and the indexation factor increases this to an indexed amount of $90,500, the indexed amount is rounded back down to $90,000.

Example 2: If the amount to be indexed is $120,000 and the indexation factor increases this to an indexed amount of $121,500, the indexed amount is rounded down to $121,000.

             (3)  You do not index the amount if its indexation factor mentioned in subsection (4) or (5) is 1 or less.

Indexation factor

             (4)  For indexation of the amount on an annual basis in accordance with subparagraph (2)(a)(i), the indexation factor is:

             (5)  For indexation of the amount on an annual basis in accordance with subparagraph (2)(a)(ii), the indexation factor is:

             (6)  You work out the * indexation factor mentioned in subsection (4) or (5) to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

Index number

             (7)  For calculating the amounts, the index number for a quarter is the estimate of full-time adult average weekly ordinary time earnings for the middle month of the quarter first published by the Australian Statistician in respect of that month.

16  Subsection 995-1(1)

Insert:

family tier 1 threshold has the meaning given by section 61-235.

17  Subsection 995-1(1)

Insert:

family tier 2 threshold has the meaning given by section 61-235.

18  Subsection 995-1(1)

Insert:

family tier 3 threshold has the meaning given by section 61-235.

19  Subsection 995-1(1) (after paragraph (a) of the definition of indexation factor )

Insert:

                    (aa)  for an amount mentioned in a provision listed at item 14 or 15 in section 960-265— indexation factor has the meaning given by section 960-290; or

20  Subsection 995-1(1) (after paragraph (a) of the definition of index number )

Insert:

                    (aa)  for an amount mentioned in a provision listed at item 14 or 15 in section 960-265— index number has the meaning given by section 960-290; or

21  Subsection 995-1(1)

Insert:

singles tier 1 threshold has the meaning given by section 61-230.

22  Subsection 995-1(1)

Insert:

singles tier 2 threshold has the meaning given by section 61-230.

23  Subsection 995-1(1)

Insert:

singles tier 3 threshold has the meaning given by section 61-230.

24  Subsection 995-1(1)

Insert:

tier 1 earner has the meaning given by section 61-225.

25  Subsection 995-1(1)

Insert:

tier 2 earner has the meaning given by section 61-225.

26  Subsection 995-1(1)

Insert:

tier 3 earner has the meaning given by section 61-225.

Private Health Insurance Act 2007

27  After subsection 23-1(2)

Insert:

          (2A)  Reduce the amount of each percentage mentioned in subsection (2) by 10 percentage points if the person mentioned in subsection (1) is a * tier 1 earner for the financial year.

          (2B)  Reduce the amount of each percentage mentioned in subsection (2) by 20 percentage points if the person mentioned in subsection (1) is a * tier 2 earner for the financial year.

          (2C)  If the person mentioned in subsection (1) is a * tier 3 earner for the financial year:

                     (a)  reduce the amount of each percentage mentioned in subsection (2) to nil; and

                     (b)  do not apply subsection (3).

28  Subsection 23-1(3)

Omit “However,”, substitute “Despite subsections (2), (2A) and (2B),”.

29  Paragraph 23-1(3)(a)

Omit “under subsection (2)”, substitute “under subsection (2) (taking into account any reduction under subsection (2A) or (2B))”.

30  Paragraph 23-10(1)(a)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 23-1(2A) or (2B))”.

31  Subsection 23-10(4)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 23-1(2A) or (2B))”.

32  After subsection 26-1(2)

Insert:

          (2A)  Reduce the amount of each percentage mentioned in subsection (2) by 10 percentage points if the person mentioned in subsection (1) is a * tier 1 earner for the financial year.

          (2B)  Reduce the amount of each percentage mentioned in subsection (2) by 20 percentage points if the person mentioned in subsection (1) is a * tier 2 earner for the financial year.

          (2C)  If the person mentioned in subsection (1) is a * tier 3 earner for the financial year:

                     (a)  reduce the amount of each percentage mentioned in subsection (2) to nil; and

                     (b)  do not apply subsection (3).

33  Subsection 26-1(3)

Omit “However,”, substitute “Despite subsections (2), (2A) and (2B),”.

34  Paragraph 26-1(3)(a)

Omit “under subsection (2)”, substitute “under subsection (2) (taking into account any reduction under subsection (2A) or (2B))”.

35  Paragraph 26-5(1)(a)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 26-1(2A) or (2B))”.

36  Subsection 26-5(4)

After “35% or 40%”, insert “(or either of those percentages as altered under subsection 26-1(2A) or (2B))”.

37  After subsection 282-1(1)

Insert:

          (1A)  However, an amount is not recoverable under paragraph (1)(d), (e), (f) or (g) if the situation giving rise to the amount did not occur due to the fault of the private health insurer.

38  After Subdivision 282-A

Insert:

Subdivision 282-AA Recovery of certain amounts by Commissioner of Taxation

282-16   Administration of this Subdivision by Commissioner of Taxation

                   The Commissioner of Taxation has the general administration of:

                     (a)  this Subdivision; and

                     (b)  any other provision of this Act to the extent that it relates to this Subdivision.

282-17   Subdivision operates in addition to Subdivision 282-A

             (1)  This Subdivision:

                     (a)  operates in addition to Subdivision 282-A; and

                     (b)  does not limit the operation of that Subdivision.

             (2)  Subdivision 282-A does not limit the operation of this Subdivision.

No double recovery

             (3)  Despite subsections (1) and (2):

                     (a)  an amount is not recoverable under section 282-1 to the extent that it has already been recovered in accordance with section 282-18; and

                     (b)  an amount is not recoverable under section 282-18 to the extent that it has already been recovered in accordance with section 282-1.

Note:          This section means that an amount that is recoverable under both paragraph 282-1(1)(e) and section 282-18 is recoverable from the private health insurer in accordance with section 282-1 or from the participant in accordance with section 282-18.

282-18   Liability for excess private health insurance premium reduction or refund

             (1)  This section applies if:

                     (a)  the amount of premiums payable under a * complying health insurance policy in respect of a financial year is reduced because a person is a * participant in the * premiums reduction scheme in respect of the policy; and

                     (b)  the amount of the reduction of the premiums exceeds the amount of the reduction allowable under section 23-1.

             (2)  This section also applies if:

                     (a)  a payment is made to a person under Subdivision 26-B; and

                     (b)  the amount of the payment exceeds the amount to which the person was entitled under section 26-1.

             (3)  The person is liable to pay the excess to the Commonwealth.

             (4)  An amount that a person is liable to pay under subsection (3) is due and payable 21 days after the day on which the Commissioner of Taxation gives him or her a notice in writing of the liability.

Note:          The liability is a tax-related liability: see Part 4-15 in Schedule 1 to the Taxation Administration Act 1953 for collection and recovery provisions.

             (5)  A notice under subsection (4) may be included in a notice of any assessment under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 .

             (6)  If the person is dissatisfied with the notice under subsection (4), he or she may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953 .

282-19   When general interest charge payable

             (1)  If:

                     (a)  a person is liable under subsection 282-18(3) to pay an amount; and

                     (b)  the whole or a part of the amount remains unpaid after the time by which the amount is due to be paid;

the person is liable to pay * general interest charge on the unpaid amount.

             (2)  A person who is liable under this section to pay * general interest charge on an unpaid amount is liable to pay the charge for each day in the period that:

                     (a)  started at the beginning of the day by which the unpaid amount was due to be paid; and

                     (b)  finishes at the end of the last day at the end of which any of the following remains unpaid:

                              (i)  the unpaid amount;

                             (ii)  general interest charge on any of the unpaid amount.

39  Section 282-25

Omit “or this Part” (wherever occurring), substitute “, this Part or paragraph 323-5(c)”.

40  Paragraph 323-5(b)

Omit “ Medicare Australia Act 1973 .”, substitute “ Medicare Australia Act 1973 ; or”.

41  At the end of section 323-5

Add:

                     (c)  for the purpose of enabling a person to perform functions under:

                              (i)  a provision of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 ; or

                             (ii)  a provision of the Medicare Levy Act 1986 ; or

                            (iii)  a provision of Subdivision 61-G of the Income Tax Assessment Act 1997 ; or

                            (iv)  any other provision of the Income Tax Assessment Act 1997 , or of any other Act, to the extent that the provision relates to a provision mentioned in subparagraph (i), (ii) or (iii).

42  Clause 1 of Schedule 1

Insert:

general interest charge means the charge worked out under Part IIA of the Taxation Administration Act 1953 .

43  Clause 1 of Schedule 1

Insert:

tier 1 earner , for a financial year, means a person who is a tier 1 earner (within the meaning of the Income Tax Assessment Act 1997 ) for the income year corresponding to the financial year.

44  Clause 1 of Schedule 1

Insert:

tier 2 earner , for a financial year, means a person who is a tier 2 earner (within the meaning of the Income Tax Assessment Act 1997 ) for the income year corresponding to the financial year.

45  Clause 1 of Schedule 1

Insert:

tier 3 earner , for a financial year, means a person who is a tier 3 earner (within the meaning of the Income Tax Assessment Act 1997 ) for the income year corresponding to the financial year.

Taxation Administration Act 1953

46  Subsection 8AAB(5) (after table item 4)

Insert:

4AA

282-19

Private Health Insurance Act 2007

47  Subsection 250-10(2) in Schedule 1 (after table item 45A)

Insert:

45B

liability for excess private health insurance premium reduction or refund

282-18

Private Health Insurance Act 2007

Taxation (Interest on Overpayments and Early Payments) Act 1983

48  Subsection 3(1) (after paragraph (ca) of the definition of decision to which this Act applies )

Insert:

                (caaa)  in a case where the expression is used in relation to relevant tax of a kind referred to in item 60 of the table in section 3C—a decision of the Commissioner to give a notice under subsection 282-18(4) of the Private Health Insurance Act 2007 ; or

49  Section 3C (after item 55 of the table)

Insert:

60

Liabilities under subsection 282-18(3) of the Private Health Insurance Act 2007

50  After subparagraph 8E(1)(d)(iv)

Insert:

                          (iva)  a liability under subsection 282-18(3) of the Private Health Insurance Act 2007 that is notified in the notice of assessment;

51  After subparagraph 8E(2)(d)(iv)

Insert:

                          (iva)  a liability under subsection 282-18(3) of the Private Health Insurance Act 2007 , payable by the person immediately before the post-notice crediting;

52  Application

The amendments made by this Schedule apply on and after 1 July 2010.