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
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.
The major amendments proposed by the Bill provide for a tax
offset for certain persons with private health insurance.
The reader is referred to the Digest for the Private Health
Insurance Incentives Bill 1996.
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.
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
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of the Australian Parliament in the course of their official
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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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