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A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Bill 1998

Part 1 P reliminary

   

1   Short title

                   This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1998 .

2   Commencement

                   This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1998 receives the Royal Assent.

3   Definitions

             (1)  In this Act, unless the contrary intention appears:

Assessment Act means the Income Tax Assessment Act 1936 .

dependant of a person has the meaning given by section 5.

family surcharge threshold for a person for a year of income has the meaning given by section 6.

married has a meaning affected by section 7.

prescribed person has the meaning given by section 8.

provides private patient hospital cover has the meaning given by section 4.

reportable fringe benefits total of a person for a year of income has the meaning given by subsection 6(1) of the Assessment Act.

resident of Australia has the meaning given by section 10.

surcharge means Medicare levy surcharge imposed by section 10.

taxable income of a person for a year of income has the meaning given by section 9.

             (2)  Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.

4   When does an insurance policy provide private patient hospital cover?

             (1)  An insurance policy provides private patient hospital cover if the policy is an applicable benefits arrangement, within the meaning of section 5A of the National Health Act 1953 , to which paragraph 5A(1)(a) of that Act applies.

             (2)  An insurance policy also provides private patient hospital cover if:

                     (a)  the policy is issued by a person to whom subsection 67(3) of the National Health Act 1953 applies; and

                     (b)  if the person referred to in paragraph (a) were a registered organization within the meaning of that Act—the policy would be an applicable benefits arrangement, within the meaning of section 5A of that Act, to which paragraph 5A(1)(a) of that Act would apply.

5   Who is a dependant of a person?

                   A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.

6   What is the family surcharge threshold ?

             (1)  The family surcharge threshold for a person for a year of income is $100,000.

             (2)  However, if the person has 2 or more dependants who are children, the family surcharge threshold for the person for the year of income is the amount worked out using the formula:

Example:    If a person has 3 dependants who are children, the family surcharge threshold is:

7   When are people married ?

De facto couples treated as if married

             (1)  This Act applies to a man and a woman who have lived together as husband and wife on a bona fide domestic basis for a period, although not legally married to each other, as if:

                     (a)  they were married to each other for the period; and

                     (b)  neither of them were married to anyone else for the period.

Persons living separately taken not to be married

             (2)  A person is taken not to be married to another person if they are living separately and apart.

New widows and widowers taken to be married until end of year

             (3)  If:

                     (a)  the last person (the deceased ) to whom another person was married during a year of income died during the year of income; and

                     (b)  the death occurred while they were married;

the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.

8   Who is a prescribed person ?

                   A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.

9   What is a person’s taxable income for a year of income?

             (1)  A person’s taxable income for a year of income is the amount that would be the person’s taxable income for the purposes of the Assessment Act apart from subsection 271-105(1) of Schedule 2F to that Act.

             (2)  However, if a person is entitled under subsection 159SA(1) of the Assessment Act to a rebate for a year of income to ensure that the rate of tax on one or more rebatable amounts specified in Table 1 in that subsection is 0%, the person’s taxable income for the year of income is the amount worked out under subsection (1), reduced by the total of the rebatable amounts.