Bills Digest 78 1996-97 Taxation Laws Amendment (Private Health Insurance Incentives) Bill 1996


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WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 31 January 1997.

CONTENTS

Passage History

Taxation Laws Amendment (Private Health Insurance Incentives) Bill 1996

Date Introduced: 13 December 1996
House: House of Representatives
Portfolio: Treasury
Commencement: The amendments outlined in this Digest commence on 1 July 1997.

Purpose

The major amendments proposed by the Bill provide for a tax offset for certain persons with private health insurance.

Background

The reader is referred to the Digest for the Private Health Insurance Incentives Bill 1996.

Main Provisions

A new section 264B is inserted in the Income Tax Assessment Act 1936 (the ITAA) by item 6 of Schedule 2 which provides the Commissioner of Taxation with the power to require a registered health benefits organisation (a health fund) to provide information about each person covered by a private health insurance policy at any time during a financial year. The information that the Commissioner may require a health fund to provide includes:

  • the name, address and date of birth of each such person;
  • the name, address and date of birth of any person who paid premiums under the policy; and
  • the amount (if any) of incentives payments received under the Private Health Insurance Incentives Bill 1996.
  • The Commissioner will also be able to require a health fund to provide the name, address and date of birth of any person who is a partner of a person covered by a policy.

Amendments to the Income Tax Assessment Act 1996

A new subdivision 61-G, which provides a tax offset for certain people with private health insurance, is inserted in the Income Tax Assessment Act 1996 item 8 of Schedule 2. The provisions of the Bill relating to the rebate should be read in conjunction with the provisions dealing with eligibility and reductions in private health insurance premiums under the Private Health Insurance Incentives Bill 1996, as the rebate is, for the most part, determined by reference to those provisions under that Bill.

Proposed section 61-305 Entitlement to tax Rebate

Under proposed section 61-305 a person will be entitled to a tax rebate for private health insurance premiums paid where:

  • the private health insurance policy (the policy) was one in respect of which they are eligible under the Private Health Insurance Incentives Bill 1996 to participate in the incentives scheme;
  • the policy was one in respect of which another person was eligible to participate in the incentives scheme, but under the income test of the incentives scheme the contributor's taxable income was required to be taken into account for determining whether the other person was eligible to so participate; and
  • the person is a trustee taxed on a share of a trust estate and the beneficiary entitled to that share would be eligible because of the above reasons, if their income were limited to that share of the trust estate.

Under proposed section 61-305 a person will not be entitled to a tax rebate for private health insurance premiums paid where:

  • there has been a reduction in private health insurance premiums under the Private Health Insurance Incentives Bill 1996;
  • another person's entitlement to the tax rebate has priority (priority is to be determined by agreement under proposed section 61-315);
  • private health insurance premiums relate to a period where the policy ceased to be a dependent child policy under the Private Health Insurance Incentives Bill 1996 (i.e. Under that Bill, where a dependent child is covered by a private health insurance policy that covers only dependent children ceases to be a dependent child, the policy ceases to be a dependent child policy; the consequence being that a health fund will not have to reduce premiums by the requisite incentive amount applicable to a policy covering dependents); and
  • taxable income was not taken into account under the incentives schemes income test because the private health insurance policy covered only dependent children.

Proposed section 61-310 Amount of Tax Rebate

The amount of tax rebate an eligible person will be entitled to is either:

  • the annual incentive amount in respect of premiums of a private health insurance policy (see subclause 5-3 of the Private Health Insurance Incentives Bill 1996) where the policy covers the whole of an income year; or
  • a pro-rata'd amount according to the period for which the policy holder pays for the premiums.

Contact Officer and Copyright Details

Ian Ireland Ph. 06 277 2438
24 January1997
Bills Digest Service
Information and Research Services

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1323-9031
© Commonwealth of Australia 1996

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 6 March 1997


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