Bills Digest No. 141 2002-03
Private Health Insurance
(Collapsed Organization Levy) Bill 2003
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Private Health Insurance
(Collapsed Organization Levy) Bill 2003
Date Introduced:
26
March 2003
House: House of
Representatives
Portfolio: Health and Ageing
Commencement:
1 July 2004
To reimpose the Collapsed Organization
levy.
This is one of four Bills reimposing
existing levies on private health insurers. Full background is set
out in Bills Digest No. 139, 2002-03 (National Health Amendment
(Private Health Insurance Levies) Bill 2003). Separate Bills are
required for each levy because they could be construed as imposing
taxation and the Constitution requires that such Bills 'deal with
one subject of taxation
only'.(1)
This levy is designed to protect
contributors to private health insurance funds. If a fund is unable
to meet liabilities to its members, the Minister for Health may
impose a levy on each other registered health benefits organization
to help meet those liabilities. The levy is to be imposed on each
organization based on the number of health fund
contributors.
The Explanatory Memorandum notes
that:
The collapsed organization levy is
not designed to bail out a registered health benefits organization.
Rather, it is designed to protect contributors from liabilities
that should have been covered by their registered health benefits
organization. Liabilities to contributors will invariably be health
care related.(2)
The Collapsed Organization levy has
not been imposed to date.
Before the Federal Government can
impose this levy, the Minister for Health must obtain PHIAC's
advice on various issues, including the proposed rate of the levy
and whether to exempt an organization from the levy. The
Explanatory Memorandum notes that the power to exempt an
organization 'is required to ensure that the application of the
collapsed organization levy will not of itself adversely affect the
financial stability of any
fund.'(3)
PHIAC's advice regarding the Collapsed
Organization levy must be tabled in
Parliament.
Clause 7 provides for the
imposition of the Collapsed Organization levy on 'each registered
health benefits organization' if the Minister so determines. The
levy is to be imposed 'on each collapsed organization levy day'.
The Minister may determine which day or days are 'collapsed
organization days'.
Clause 8 provides for the
exemption of organizations from the Collapsed Organization levy if
the Minister is satisfied that imposing the levy would have a
'significantly adverse effect' on the organization's solvency or
capital requirements.
Clause 10 states that the
Minister must obtain PHIAC's advice before
deciding:
-
that the Collapsed Organization Levy should be
imposed,
-
the rate of the levy, or
-
that an organization should be exempted from the
levy.
Clause 11 validates all
Collapsed Organization levy payments made before the commencement
of the current Bill.
1.
Section
55.
2.
Explanatory
Memorandum, p. 2.
3.
Explanatory
Memorandum, p. 2.
Peter Prince
30 April 2003
Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to
Senators and Members of the Australian Parliament. While great care
is taken to ensure that the paper is accurate and balanced, the
paper is written using information publicly available at the time
of production. The views expressed are those of the author and
should not be attributed to the Information and Research Services
(IRS). Advice on legislation or legal policy issues contained in
this paper is provided for use in parliamentary debate and for
related parliamentary purposes. This paper is not professional
legal opinion. Readers are reminded that the paper is not an
official parliamentary or Australian government document.
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 1328-8091
© Commonwealth of Australia 2003
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,
2003.
Back to top