Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Bill 1998

Part 3 Amount of surcharge payable

Division 1 General rule

11   Amount of surcharge payable

General rule

             (1)  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.

No surcharge payable if taxable income is $13,389 or less

             (2)  However, no surcharge is payable by the person if the person’s taxable income for the year of income is $13,389 or less.

Reduced surcharge if taxable income is $14,474 or less

             (3)  If the person’s taxable income for the year of income is more than $13,389 but not more than $14,474, the amount of surcharge payable by the person is not more than 20% of the amount by which the person’s taxable income exceeds $13,389. This subsection has effect despite subsection (1).



 

Division 2 Amount of surcharge for single person without dependants

12   Amount of surcharge for single person without dependants

             (1)  This Division applies to a person for a period in a year of income if:

                     (a)  the sum of the following is more than $50,000:

                              (i)  the person’s taxable income for the year of income;

                             (ii)  the person’s reportable fringe benefits total for the year of income; and

                     (b)  during the whole of the period:

                              (i)  the person is not a married person; and

                             (ii)  the person does not have any dependants; and

                            (iii)  the person is not covered by an insurance policy that provides private patient hospital cover; and

                            (iv)  the person is not a prescribed person.

             (2)  The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.

             (3)  If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:



 

Division 3 Amount of surcharge for single person with dependants

13   Amount of surcharge for single person with dependants

Application

             (1)  This Division applies to a person for a period in a year of income if:

                     (a)  the sum of the following is more than the family surcharge threshold for the person for the year of income:

                              (i)  the person’s taxable income for the year of income;

                             (ii)  the person’s reportable fringe benefits total for the year of income; and

                     (b)  during the whole of the period:

                              (i)  the person is not a married person; and

                             (ii)  the person has one or more dependants; and

                            (iii)  the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and

                            (iv)  the person is not a prescribed person.

Special rules for applying subparagraph (1)(b)(iii)

             (2)  For the purposes of subparagraph (1)(b)(iii):

                     (a)  the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (c), (ca), (caa) or (cb) of that Act; and

                     (b)  disregard each of the person’s dependants who:

                              (i)  is a prescribed person for the period; or

                             (ii)  would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.

Note:          Paragraphs 251U(1)(a), (b), (c), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:

·        defence personnel and members of their families who can get free medical treatment;

·        people who can get free medical treatment under the Veterans’ Entitlements Act 1986 ;

·        people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986 .

                   Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.

Amount of surcharge payable for whole year

             (3)  The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.

Amount of surcharge payable for part of year

             (4)  If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:



 

Division 4 Amount of surcharge for married person

14   Who does this Division apply to?

Application

             (1)  This Division applies to a person for a period in a year of income if, during the whole of the period:

                     (a)  the person is a married person; and

                     (b)  the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and

                     (c)  the person is not a prescribed person.

Special rules for applying paragraph (1)(b)

             (2)  For the purposes of paragraph (1)(b):

                     (a)  the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (c), (ca), (caa) or (cb) of that Act; and

                     (b)  disregard each of the person’s dependants who:

                              (i)  is a prescribed person for the period; or

                             (ii)  would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.

Note:          Paragraphs 251U(1)(a), (b), (c), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:

·        defence personnel and members of their families who can get free medical treatment;

·        people who can get free medical treatment under the Veterans’ Entitlements Act 1986 ;

·        people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986 .

                   Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.

15   Amount of surcharge if this Division applies for whole year

                   The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:

                     (a)  this Division applies to the person for the whole of the year of income; and

                     (b)  the sum of the following exceeds the family surcharge threshold for the person for the year of income:

                              (i)  the person’s taxable income for the year of income;

                             (ii)  the person’s reportable fringe benefits total for the year of income;

                            (iii)  the person’s spouse’s taxable income for the year of income;

                            (iv)  the person’s spouse’s reportable fringe benefits total (if any) for the year of income; and

                     (c)  the sum of the person’s taxable income and reportable fringe benefits total for the year of income is more than $13,389.

16   Amount of surcharge if this Division applies for part of the year

When this section applies

             (1)  The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:

                     (a)  this Division applies to the person for only part of the year of income; and

                     (b)  either subsection (2) or (3) applies to the person.

Person married for whole year of income

             (2)  This subsection applies to the person if:

                     (a)  the person is married for the whole of the year of income; and

                     (b)  the sum of the following is more than the family surcharge threshold for the person for the year of income:

                              (i)  the person’s taxable income for the year of income;

                             (ii)  the person’s reportable fringe benefits total for the year of income;

                            (iii)  the person’s spouse’s taxable income for the year of income;

                            (iv)  the person’s spouse’s reportable fringe benefits total (if any) for the year of income; and

                     (c)  the sum of the person’s taxable income and reportable fringe benefits total for the year of income is more than $13,389.

Person married for part of the year of income

             (3)  This subsection applies to the person if:

                     (a)  the person is married for only part of the year of income; and

                     (b)  the sum of the person’s taxable income and reportable fringe benefits total for the year of income is more than $13,389.

 Amount of surcharge

             (4)  The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:

where:

number of applicable days is the number of days in the year of income for which this Division applies to the person.

Special rule if person’s spouse is presently entitled beneficiary

             (5)  Work out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act assuming that:

                     (a)  the spouse’s taxable income included that share; and

                     (b)  subsection 271-105(1) of Schedule 2F to that Act did not apply in working out the net income of the trust estate.