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Midwife Professional Indemnity (Commonwealth Contribution) Scheme Bill 2010

Part 2 Level 1 and Level 2 Commonwealth contributions

Division 1 Preliminary

9   Guide to the Level 1 and Level 2 Commonwealth contribution provisions

             (1)  This Part provides that a Level 1 Commonwealth contribution may be paid to an eligible insurer that pays, or is liable to pay, more than a particular amount in relation to a claim against a midwife. The claim must:

                     (a)  relate to an incident that occurs in the course of, or in connection with, the practice by the person as an eligible midwife; and

                     (b)  have been certified as a qualifying claim.

             (2)  This Part provides that a Level 2 Commonwealth contribution may be paid in relation to a liability of a midwife (for example, a liability under a court judgment) if the liability:

                     (a)  is in relation to a claim that:

                              (i)  relates to an incident that occurs in the course of, or in connection with, the person’s practice as an eligible midwife; and

                             (ii)  has been certified as a qualifying claim; and

                     (b)  exceeds the amount payable under an insurance contract that limits the eligible insurer’s liability under the contract in relation to a particular claim against the midwife, where the limit equals or exceeds the Level 2 claim threshold.

             (3)  The following table tells you where to find the provisions dealing with various issues:

 

Where to find the provisions on various issues

Item

Issue

Provisions

1

what are the Level 1 and Level 2 claim thresholds?

section 10

2

when may the Medicare CEO certify a claim as a qualifying claim?

section 11

3

when are Level 1 and Level 2 Commonwealth contributions payable?

sections 16 and 18

4

why are apportionment certificates relevant?

paragraph 16(1)(c)

6

how are applications for apportionment certificates made and decided?

sections 51 to 57

7

what is the amount of a Level 1 or Level 2 Commonwealth contribution?

sections 17 and 21

8

how is an application for Level 1 or Level 2 Commonwealth contribution made?

sections 58 and 60

9

when will Level 1 or Level 2 Commonwealth contribution be paid?

sections 59 and 61

10

how must Level 2 Commonwealth contribution be applied?

section 22

11

who is liable to repay an overpayment of Level 2 Commonwealth contribution indemnity?

section 23

12

what if a payment is received that would have reduced the amount of an insurance payment?

sections 24 to 28

13

what information has to be given to the Medicare Australia CEO?

section 62

14

what records must eligible insurers keep?

section 63

15

how are overpayments of Level 1 and Level 2 Commonwealth contribution recovered?

section 64

10   Level 1 and Level 2 claim thresholds

Level 1 claim threshold

             (1)  The Level 1 claim threshold is:

                     (a)  $100,000; or

                     (b)  such other amount as is specified in the Rules for the purposes of this paragraph.

Note:          Claims cannot be aggregated to reach the Level 1 claim threshold: see paragraph 11(3)(j).

Level 2 claim threshold

             (2)  The Level 2 claim threshold is:

                     (a)  $2 million; or

                     (b)  such other amount as is specified in the Rules for the purposes of this paragraph.

Note:          Claims cannot be aggregated to reach the Level 2 claim threshold: see paragraph 11(3)(j).

             (3)  A Rule specifying an amount as the Level 1 claim threshold (or changing the amount previously so specified) only applies in relation to a payment made or payable under a contract of insurance entered into, or renewed, after the Rule takes effect.

             (4)  A Rule specifying an amount as the Level 2 claim threshold (or changing the amount previously so specified) only applies in relation to a contract of insurance entered into, or renewed, at the time or after the Rule takes effect.

             (5)  A Rule changing the Level 1 claim threshold or Level 2 claim threshold (which could be the threshold originally applicable under subsection (1) or (2), or that threshold as already changed by Rules) takes effect on the date specified in the Rules, which must be the date on which the Rules are entered on the Federal Register of Legislative Instruments or a later day.



 

Division 2 Certification

11   When may the Medicare Australia CEO certify a claim as a qualifying claim?

Criteria for certification—Level 1

             (1)  The Medicare Australia CEO may issue a certificate stating that a claim is a Level 1 qualifying claim if the Medicare Australia CEO is satisfied that:

                     (a)  the claim meets the common requirements set out in subsection (3); and

                     (b)  a person has applied for a Level 1 qualifying claim certificate in relation to the claim in accordance with section 12.

Criteria for certification—Level 2

             (2)  The Medicare Australia CEO may issue a certificate stating that a claim is a Level 2 qualifying claim if the Medicare Australia CEO is satisfied that:

                     (a)  the claim meets the common requirements set out in subsection (3); and

                     (b)  the claim meets the additional Level 2 requirements set out in subsection (4); and

                     (c)  a person has applied for a Level 2 qualifying claim certificate in relation to the claim in accordance with section 12.

Common requirements for both Level 1 and Level 2 qualifying claim certificates

             (3)  A claim in relation to which an application for a Level 1 or Level 2 qualifying claim certificate has been made meets the common requirements set out in this subsection if:

                     (a)  the claim is or was made against a person (the midwife ); and

                     (b)  the claim relates to an incident that occurs or occurred in the course of, or in connection with, the midwife’s practice as an eligible midwife; and

                     (c)  there is a contract of insurance entered into by an eligible insurer that provides midwife professional indemnity cover in relation to the claim; and

                     (d)  except in the circumstances specified in Rules made for the purposes of this paragraph, the incident occurs or occurred in Australia or an external Territory; and

                     (e)  the claim does not relate to an incident that occurs or occurred in the course of, or in connection with, the provision of treatment of a public patient of a hospital; and

                      (f)  the claim does not relate to an incident that occurs or occurred in the course of, or in connection with, practice of a kind for which:

                              (i)  the Commonwealth, a State or a Territory; or

                             (ii)  a local governing body; or

                            (iii)  an authority established under a law of the Commonwealth, a State or a Territory;

                            indemnifies eligible midwives from liability relating to compensation; and

                     (g)  the claim does not relate to an incident that occurs or occurred in the course of, or in connection with, practice of a kind in relation to which eligible midwives are ordinarily, or could reasonably be expected in the ordinary course of business to be, engaged as employees (and therefore indemnified from liability by their employer); and

                     (h)  if the application is for a Level 1 qualifying claim certificate, the incident occurs or occurred:

                              (i)  on or after 1 July 2010; and

                             (ii)  on or before the Level 1 termination date (if any); and

                      (i)  if the application is for a Level 2 qualifying claim certificate the incident occurs or occurred:

                              (i)  on or after 1 July 2010; and

                             (ii)  on or before the Level 2 termination date (if any); and

                      (j)  the claim is not in substance an aggregation of two or more separate claims against the midwife; and

                     (k)  the claim is not a claim included in a class specified in Rules made for the purposes of this paragraph; and

                      (l)  the claim does not relate to an incident of a kind specified in Rules made for the purposes of this paragraph; and

                    (m)  the claim does not relate to a type of midwifery practice specified in Rules made for the purposes of this paragraph.

Additional requirements for Level 2 qualifying claim certificates

             (4)  A claim in relation to which an application for a Level 2 qualifying claim certificate has been made meets the additional Level 2 requirements set out in this subsection if:

                     (a)  there is a contract of insurance entered into by an eligible insurer in relation to which the following requirements are satisfied:

                              (i)  the contract provides midwife professional indemnity cover for the eligible midwife in relation to the claim, or would, but for the limit of the eligible insurer’s liability under the contract in relation to a particular claim against the eligible midwife, provide such cover for the midwife in relation to the claim;

                             (ii)  the limit of the eligible insurer’s liability under the contract, in relation to each claim against the midwife, equals or exceeds the Level 2 claim threshold;

                            (iii)  the eligible insurer is a general insurer, within the meaning of the Insurance Act 1973 ;

                            (iv)  the eligible insurer entered into the contract in the ordinary course of the eligible insurer’s business; and

                     (b)  the contract of insurance is not a contract included in a class specified in Rules made for the purposes of this paragraph.

When a certificate is in force

             (5)  The certificate comes into force when it is issued and remains in force until it is revoked.

Matters to be identified or specified in certificate

             (6)  The certificate must:

                     (a)  identify:

                              (i)  the midwife; and

                             (ii)  the claim; and

                            (iii)  if the certificate is a Level 2 qualifying claim certificate—the contract of insurance that provides midwife professional indemnity cover for the midwife; and

                     (b)  specify the Level 1 claim threshold or the Level 2 claim threshold, as the case requires.

The certificate may also contain other material.

AAT review of decision to refuse

             (7)  An application may be made to the Administrative Appeals Tribunal for review of a decision of the Medicare Australia CEO to refuse to issue a qualifying claim certificate.

Note:          Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

Medicare Australia CEO to give applicant copy of certificate

             (8)  If the Medicare Australia CEO decides to issue a qualifying claim certificate, the Medicare Australia CEO must, within 28 days of making his or her decision, unless it is not reasonably practicable to do so, give the applicant a copy of the certificate. However, a failure to comply does not affect the validity of the decision.

             (9)  A qualifying claim certificate is not a legislative instrument.

12   Application for a qualifying claim certificate

             (1)  An application for the issue of a Level 1 qualifying claim certificate may be made by an eligible insurer.

             (2)  An application for the issue of a Level 2 qualifying claim certificate may be made by:

                     (a)  an eligible insurer; or

                     (b)  the person against whom the claim is or was made or a person acting on that person’s behalf.

             (3)  The application must:

                     (a)  be made in writing using a form approved by the Medicare Australia CEO; and

                     (b)  specify whether it is an application for a Level 1 qualifying claim certificate or a Level 2 qualifying claim certificate; and

                     (c)  specify each person, other than the midwife concerned, against whom a claim has been or is reasonably likely to be made, in relation to the incident to which the claim relates; and

                     (d)  be accompanied by the documents and other information required by the form approved by the Medicare Australia CEO.

13   Time by which an application must be decided

             (1)  Subject to subsection (2), the Medicare Australia CEO is to decide an application for the issue of a qualifying claim certificate on or before the 21st day after the day on which the application is received by the Medicare Australia CEO.

             (2)  If the Medicare Australia CEO requests a person to give information under section 62 in relation to the application, the Medicare Australia CEO does not have to decide the application until the 21st day after the day on which the person gives the information to the Medicare Australia CEO.

14   Obligation to notify the Medicare Australia CEO if information is incorrect or incomplete

             (1)  If:

                     (a)  a qualifying claim certificate is in force in relation to a claim; and

                     (b)  a person becomes aware that the information provided to the Medicare Australia CEO in connection with the application for the certificate was incorrect or incomplete, or is no longer correct or complete; and

                     (c)  the person is:

                              (i)  the person who applied for the certificate; or

                             (ii)  another person who has applied for a payment of Level 1 or Level 2 Commonwealth contribution in relation to the claim;

the person must notify the Medicare Australia CEO of the respect in which the information was incorrect or incomplete, or is no longer correct or complete.

Note:          Failure to notify is an offence (see section 67).

             (2)  The notification must:

                     (a)  be made in writing; and

                     (b)  be given to the Medicare Australia CEO within 28 days after the person becomes aware as mentioned in subsection (1).

15   Revocation and variation of qualifying claim certificates

Revocation

             (1)  The Medicare Australia CEO may revoke a qualifying claim certificate if the Medicare Australia CEO is no longer satisfied as mentioned in subsection 11(1) or (2) in relation to the claim.

             (2)  To avoid doubt, in considering whether he or she is still satisfied as mentioned in subsection 11(1) or (2) in relation to the claim, the Medicare Australia CEO may have regard to matters that have occurred since the decision to issue the qualifying claim certificate was made, including for example:

                     (a)  the making of Rules for the purpose of paragraph 11(3)(k),(l) or (m) or (4)(b); or

                     (b)  changes to the terms and conditions of the contract of insurance identified in the certificate.

Variation

             (3)  If the Medicare Australia CEO is satisfied that a matter is not correctly identified or specified in a qualifying claim certificate, the Medicare Australia CEO must vary the certificate so that it correctly identifies or specifies the matter.

Effect of revocation

             (4)  If:

                     (a)  the Medicare Australia CEO revokes a qualifying claim certificate; and

                     (b)  an amount of Level 1 or Level 2 Commonwealth contribution has already been paid in relation to the claim;

the amount is an amount overpaid to which section 64 applies.

Effect of variation

             (5)  If:

                     (a)  the Medicare Australia CEO varies a qualifying claim certificate; and

                     (b)  an amount of Level 1 or Level 2 Commonwealth contribution has already been paid in relation to the claim, and that amount exceeds the amount that would have been paid if the amount of Level 1 or Level 2 Commonwealth contribution had been determined having regard to the certificate as varied;

the amount of the excess is an amount overpaid to which section 64 applies.

AAT review of decision to revoke or vary

             (6)  An application may be made to the Administrative Appeals Tribunal for review of a decision of the Medicare Australia CEO to revoke or vary a qualifying claim certificate.

Note:          Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

Medicare Australia CEO to give applicant copy of varied certificate

             (7)  If the Medicare Australia CEO decides to vary a qualifying claim certificate, the Medicare Australia CEO must, within 28 days of making his or her decision, give the applicant a copy of the varied certificate. However, a failure to comply does not affect the validity of the decision.



 

Division 3 Payability

Subdivision A Level 1 payability

16   When is a Level 1 Commonwealth contribution payable?

Basic payability rule

             (1)  A Level 1 Commonwealth contribution is payable to an eligible insurer under this section if:

                     (a)  a claim (the current claim ) is, or was, made against a person (the midwife ); and

                     (b)  a Level 1 qualifying claim certificate is in force in relation to the current claim; and

                     (c)  in a case where there is a person, other than the midwife, against whom a claim has been, or could reasonably be made in relation to the incident to which the current claim relates—either:

                              (i)  an apportionment certificate in relation to the current claim is in force; or

                             (ii)  the Medicare CEO has not issued an apportionment certificate because of the operation of section 52 (which deals with claims for which there is a final judgment or order of a court); and

                     (d)  the eligible insurer has a qualifying payment in relation to the current claim (see subsection (3)); and

                     (e)  the amount of the qualifying payment exceeds what was the Level 1 claim threshold at the time the eligible insurer was first notified of the current claim or the incident to which the current claim relates; and

                      (f)  a person has applied for the Level 1 Commonwealth contribution in accordance with section 58; and

                     (g)  any other requirements (however described) that are specified in the Rules have been met; and

                     (h)  the current claim is not a claim included in a class specified in Rules made for the purposes of this paragraph.

             (2)  Rules made for the purposes of paragraph (1)(g) or (h) do not apply in relation to an incident if the claim to which the incident relates was made before the Rules in question take effect.

Qualifying payments

             (3)  The eligible insurer has a qualifying payment in relation to the current claim if:

                     (a)  the eligible insurer:

                              (i)  pays an amount in relation to the current claim; or

                             (ii)  is liable to pay an amount in relation to a payment or payments that someone makes, or is liable to make, in relation to the current claim under a written agreement between the parties to the current claim; or

                            (iii)  is liable to pay an amount in relation to a payment or payments that someone makes, or is liable to make, in relation to the current claim under a judgment or order of a court that is not stayed and is not subject to appeal; and

                     (b)  the eligible insurer pays, or is liable to pay, the amount under an insurance contract between the eligible insurer and the midwife; and

                     (c)  the eligible insurer pays, or becomes liable to pay, the amount in the ordinary course of the eligible insurer’s business; and

                     (d)  if an apportionment certificate is in force in relation to the current claim—the amount paid or payable in relation to the current claim is consistent with the proportion of the overall liability specified in the apportionment certificate as the proportion that is to be attributed to the midwife against whom the claim was made.

17  Amount of Level 1 Commonwealth contribution

                   The amount of a Level 1 Commonwealth contribution in relation to a claim is:

                     (a)  80%; or

                     (b)  such other percentage as is specified in the Rules;

of the amount by which the amount of the eligible insurer’s qualifying payment, or the sum of the eligible insurer’s qualifying payments (see subsection 16(3)), in relation to the claim, exceeds the Level 1 claim threshold but does not exceed the Level 2 claim threshold.

Subdivision B Level 2 payability

18   When is a Level 2 Commonwealth contribution payable?

Basic payability rule

             (1)  The Medicare Australia CEO may decide that a Level 2 Commonwealth contribution (the contribution ) is payable in relation to a liability of a person (the midwife ) if:

                     (a)  a claim (the current claim ) is, or was, made against the midwife by another person; and

                     (b)  a Level 2 qualifying claim certificate is in force in relation to the current claim; and

                     (c)  the liability is a qualifying liability in relation to the claim (see section 19); and

                     (d)  in a case where there is a person, other than the midwife, against whom a claim has been, or could reasonably be made in relation to the incident to which the current claim relates—either:

                              (i)  an apportionment certificate in relation to the current claim is in force; or

                             (ii)  the Medicare CEO has not issued an apportionment certificate because of the operation of section 52 (which deals with claims for which there is a final judgment or order of a court); and

                     (e)  because of the limit of the eligible insurer’s liability under the contract of insurance identified in the qualifying claim certificate, the contract does not cover, or does not fully cover, the liability; and

                      (f)  the amount that, if the limit had been high enough to cover the whole of the liability, the eligible insurer would (subject to the other terms and conditions of the contract) have been liable to pay under the contract of insurance in relation to the liability exceeds the actual amount (if any) that the eligible insurer has paid or is liable to pay under the contract in relation to the liability; and

                     (g)  the aggregate of:

                              (i)  the amount (if any) the insurer has paid, or is liable to pay, in relation to the liability under the contract of insurance; and

                             (ii)  the other amounts (if any) that the insurer has already paid, or has already become liable to pay, under the contract in relation to the current claim; and

                            equals or exceeds the Level 2 claim threshold identified in the qualifying claim certificate; and

                     (h)  a person has applied for the Level 2 Commonwealth contribution in accordance with section 60; and

                      (i)  the claim is not a claim included in a class specified in Rules made for the purposes of this paragraph.

Note 1:       For how paragraphs (f) and (g) interact with Level 1 Commonwealth contributions, see section 20.

Note 2:       For the purpose of subparagraphs (d)(i) and (ii), payments and liabilities to pay must meet the ordinary course of business requirement set out in subsection (3).

Who the contribution is payable to

             (2)  The contribution is to be paid to the person who applies for it.

Note:          For who can apply, see section 60.

Ordinary course of business test for insurance payments

             (3)  An amount that an eligible insurer has paid, or is liable to pay, under a contract of insurance does not count for the purpose of subparagraph (1)(d)(i) or (ii) unless it is an amount that the eligible insurer paid, or is liable to pay, in the ordinary course of the eligible insurer’s business.

AAT review of decision to refuse, or to pay a particular amount of contribution

             (4)  An application may be made to the Administrative Appeals Tribunal for review of a decision of the Medicare Australia CEO to refuse an application for Level 2 Commonwealth contribution, or a decision of the Medicare Australia CEO to pay a particular amount of Level 2 Commonwealth contribution.

Note:          Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

19   Qualifying liabilities

             (1)  A person (the midwife ) has a qualifying liability in relation to a claim made against the midwife if:

                     (a)  one of the following applies:

                              (i)  the liability is under a judgment or order of a court in relation to the claim, being a judgment or order that is not stayed and is not subject to appeal;

                             (ii)  the liability is under a settlement of the claim that takes the form of a written agreement between the parties to the claim;

                            (iii)  the liability is some other kind of liability of the midwife (for example, a liability to legal costs) that relates to the claim; and

                     (b)  the defence of the claim against the midwife was conducted appropriately (see subsection (2)) up to the time when:

                              (i)  if the liability is under a judgment or order of a court—the date on which the judgment or order became a judgment or order that is not stayed and is not subject to appeal; or

                             (ii)  if the liability is under a settlement of the claim—the date on which the settlement agreement was entered into; or

                            (iii)  if the liability is some other kind of liability—the date on which the liability was incurred; and

                     (c)  if the liability is under a settlement of the claim, or is under a consent order made by a court—a legal practitioner has given a statutory declaration certifying that the amount of the liability is reasonable; and

                     (d)  if an apportionment certificate is in force in relation to the current claim—the amount paid or payable in relation to the current claim is consistent with the proportion of the overall liability specified in the apportionment certificate as the proportion that is to be attributed to the midwife against whom the claim was made.

             (2)  For the purposes of paragraph (1)(b), the defence of the claim is conducted appropriately if, and only if:

                     (a)  to the extent it is conducted on the midwife’s behalf by an insurer, or by a legal practitioner engaged by the insurer—the defence is conducted to a standard that is consistent with the insurer’s usual standard for the conduct of the defence of claims; and

                     (b)  to the extent it is conducted by the midwife, or by a legal practitioner engaged by the midwife—the defence is conducted prudently.

             (3)  In this section:

defence of the claim includes any settlement negotiations on behalf of the midwife.

20   Interaction with Level 1 Commonwealth contribution and run-off cover

                   For the following purposes:

                     (a)  determining the limit of the eligible insurer’s liability under the contract of insurance;

                     (b)  paragraphs 18(1)(f) and (g);

an amount that an eligible insurer has paid or is liable to pay, or would have been liable to pay, under a contract of insurance is not to be reduced on account of a Level 1 Commonwealth contribution, or a run-off cover Commonwealth contribution, paid or payable, or that would have been payable, to the eligible insurer.

21   Amount of Level 2 Commonwealth contribution

                   The amount of Level 2 Commonwealth contribution that is payable in relation to a particular qualifying liability is the amount of the excess referred to in paragraph 18(1)(f).

Note:          It is only liabilities that exceed the limit that will be covered by a Level 2 Commonwealth contribution (even if the Level 2 claim threshold is less than that limit).

22   How Level 2 Commonwealth contribution is to be applied

             (1)  This section applies if a Level 2 Commonwealth contribution (the contribution ) is paid to a person (the recipient ) in relation to a liability of a person (the midwife ).

Note:          The recipient will either be the midwife himself or herself, or a person acting on behalf of the midwife.

Medicare Australia CEO to give recipient of payment a notice identifying the liability to be discharged

             (2)  The Medicare Australia CEO must give the recipient a written notice (the payment notice ) identifying the liability in relation to which the contribution is paid, and advising the recipient how this section requires the contribution to be dealt with.

Recipient’s obligation if the amount of the contribution equals or is less than the liability

             (3)  If the amount of the contribution equals or is less than the undischarged amount of the liability identified in the payment notice, the recipient must apply the whole of the contribution towards the discharge of the liability.

Recipient’s obligation if the amount of the contribution exceeds the liability

             (4)  If the amount of the contribution is greater than the undischarged amount of the liability identified in the payment notice, the recipient must:

                     (a)  apply so much of the contribution as equals the undischarged amount of the liability towards the discharge of the liability; and

                     (b)  if the recipient is not the midwife—deal with the balance of the contribution in accordance with the directions of the midwife.

Time by which recipient must comply with obligation

             (5)  The recipient must comply with whichever of subsections (3) and (4) applies:

                     (a)  by the time specified in a written direction (whether contained in the payment notice or otherwise) given to the recipient by the Medicare Australia CEO; or

                     (b)  if no such direction is given to the recipient—as soon as practicable after the Commonwealth contribution is received by the recipient.

To avoid doubt, the Medicare Australia CEO may vary a direction under paragraph (a) to specify a different time.

Debt to Commonwealth if recipient does not comply with obligation on time

             (6)  If the recipient does not comply with whichever of subsections (3) and (4) applies by the time required by subsection (5), the amount of the contribution is a debt due to the Commonwealth.

             (7)  The debt may be recovered:

                     (a)  by action by the Medicare Australia CEO against the recipient in a court of competent jurisdiction; or

                     (b)  under section 65.

             (8)  If the amount of the contribution is recoverable, or has been recovered, as mentioned in subsection (7), no amount is recoverable under section 25 or section 64 in relation to the same payment of contribution.

23   Who is liable to repay an overpayment of Level 2 Commonwealth contribution?

             (1)  This section applies if, in relation to a Level 2 Commonwealth contribution (the contribution ) that has been paid, there is an amount overpaid as described in subsection 25(2) or 64(2).

             (2)  The liable person , in relation to the amount overpaid, is:

                     (a)  if the contribution has not yet been dealt with in accordance with whichever of subsections 22(3) and (4) applies—the recipient referred to in subsection 22(1); or

                     (b)  if the contribution has been dealt with in accordance with whichever of those subsections applies—the midwife referred to in subsection 22(1).

Note:          The recipient and the midwife will be the same person if the contribution was paid to the midwife.

             (3)  If:

                     (a)  the recipient and the midwife referred to in subsection 22(1) are not the same person; and

                     (b)  when the overpayment is recovered as a debt, the liable person is the recipient;

the fact that the recipient may later deal with the remainder of the contribution in accordance with subsection 22(3) or (4) does not mean that the overpayment should instead have been recovered from the midwife.

Subdivision C Payments that would have reduced the amount paid out under the contract of insurance

24   Amounts paid before payment of Level 2 Commonwealth contribution

             (1)  If:

                     (a)  an amount (the insurance payment ) has been paid under a contract of insurance that provides midwife professional indemnity cover for a person (the midwife ) in relation to a liability of the midwife; and

                     (b)  another amount (not being an amount referred to in subsection (2)) has been paid to the midwife, the eligible insurer or another person in relation to the incident to which the liability relates; and

                     (c)  the other amount was not taken into account in working out the amount of the insurance payment; and

                     (d)  if the other amount had been taken into account in working out the amount of the insurance payment, a lesser amount would have been paid under the contract of insurance in relation to the liability;

then, for the purpose of calculating the amount of Level 2 Commonwealth contribution (if any) that is payable in relation to a liability of the midwife, the lesser amount is taken to have been the amount of the insurance payment.

             (2)  This section does not apply to any of the following:

                     (a)  an amount paid to an eligible insurer by another insurer under a right of contribution;

                     (b)  a payment of Level 1 Commonwealth contribution;

                     (c)  a payment of run-off cover Commonwealth contribution;

                     (d)  an amount of a kind specified in the Rules for the purposes of this paragraph.

25   Amounts paid after payment of Level 2 Commonwealth contribution

             (1)  This section applies if:

                     (a)  an amount (the actual contribution amount ) of Level 2 Commonwealth contribution has been paid in relation to a qualifying liability that relates to a claim made against a person (the midwife ); and

                     (b)  another amount (not being an amount referred to in subsection (5)) is paid to the midwife, an eligible insurer or another person in relation to the incident to which the claim relates; and

                     (c)  the other amount was not taken into account in calculating the actual contribution amount; and

                     (d)  if the other amount had been so taken into account, a lesser amount (the reduced contribution amount , which could be zero) of Level 2 Commonwealth contribution would have been paid in relation to the liability.

             (2)  The amount overpaid is the amount by which the actual contribution amount exceeds the reduced contribution amount.

             (3)  If the Medicare Australia CEO has given the liable person (see subsection 23(2)) a notice under subsection 27(1) in relation to the amount overpaid, the amount overpaid is a debt owed to the Commonwealth by the liable person.

Note 1:       If the contribution is or was not dealt with in accordance with whichever of subsections 22(3) and (4) applies by the time required by subsection 22(5), the whole amount of the contribution is a debt owed by the recipient, and no amount is recoverable under this section (see subsections 22(6) to (8)).

Note 2:       If:

(a)    the recipient and the midwife referred to in subsection 22(1) are not the same person; and

(b)    the midwife becomes the liable person;

                   then (subject to subsection 23(3)), the recipient ceases to be the liable person, and the amount overpaid must instead be recovered from the midwife.

             (4)  The amount overpaid may be recovered:

                     (a)  by action by the Medicare Australia CEO against the liable person in a court of competent jurisdiction; or

                     (b)  under section 65.

             (5)  This section does not apply to any of the following:

                     (a)  an amount paid to an eligible insurer by another insurer under a right of contribution;

                     (b)  a payment of Level 1 Commonwealth contribution;

                     (c)  a payment of run-off cover Commonwealth contribution;

                     (d)  an amount of a kind specified in the Rules for the purposes of this paragraph.

26   Obligation to notify the Medicare Australia CEO that amount has been paid

             (1)  If:

                     (a)  an amount of Level 2 Commonwealth contribution has been paid in relation to a qualifying liability that relates to a claim made against a person (the midwife ); and

                     (b)  the person (the applicant ) who applied for the Level 2 Commonwealth contribution becomes aware that another amount has been paid to the midwife, an insurer or another person in relation to the incident to which the claim relates; and

                     (c)  because of the payment of the other amount, there is an amount overpaid as described in subsection 25(2);

the applicant must notify the Medicare Australia CEO that the other amount has been paid.

Note:          Failure to notify is an offence (see section 67).

             (2)  The notification must:

                     (a)  be in writing; and

                     (b)  be given to the Medicare Australia CEO within 28 days after the applicant becomes aware that the other amount has been paid.

27   The Medicare Australia CEO to notify of amount of debt due

             (1)  If:

                     (a)  an amount of Level 2 Commonwealth contribution has been paid in relation to a qualifying liability that relates to a claim made against a person (the midwife ); and

                     (b)  another amount is paid to the midwife, an insurer or another person in relation to the incident to which the claim relates; and

                     (c)  because of the payment of the other amount, there is an amount overpaid as described in subsection 25(2);

the Medicare Australia CEO may give the liable person (see subsection 23(2)) a written notice that specifies:

                     (d)  the amount overpaid, and that it is a debt owed to the Commonwealth under subsection 25(3); and

                     (e)  the day before which the amount must be paid to the Commonwealth; and

                      (f)  the effect of section 28.

The day specified under paragraph (e) must be at least 28 days after the day on which the notice is given.

             (2)  The debt becomes due and payable on the day specified under paragraph (1)(e).

28   Penalty imposed if an amount is repaid late

             (1)  If:

                     (a)  a person owes a debt to the Commonwealth under subsection 25(3); and

                     (b)  the debt remains wholly or partly unpaid after it becomes due and payable;

the person is liable to pay a late payment penalty under this section.

             (2)  The late payment penalty is calculated:

                     (a)  at the rate specified in the Rules for the purposes of this paragraph; and

                     (b)  on the unpaid amount; and

                     (c)  for the period:

                              (i)  starting when the amount becomes due and payable; and

                             (ii)  ending when the amount, and the penalty payable under this section in relation to the amount, have been paid in full.

             (3)  The Medicare Australia CEO may remit the whole or a part of an amount of late payment penalty if the Medicare Australia CEO considers that there are good reasons for doing so.

             (4)  An application may be made to the Administrative Appeals Tribunal for review of a decision of the Medicare Australia CEO not to remit, or to remit only part of, an amount of late payment penalty.

Note:          Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

             (5)  If:

                     (a)  the recipient and the midwife referred to in subsection 22(1) are not the same person; and

                     (b)  the midwife becomes the liable person; and

                     (c)  the recipient has or had a liability under this section to pay late payment penalty;

the recipient’s liability to the late payment penalty is not affected by the fact that the recipient is no longer the person who owes the debt to the Commonwealth under subsection 25(3), except that the period referred to in paragraph (2)(c) ends when the midwife becomes the liable person.