Services Australia specified benefits and entitlements data overview
The Australian Taxation Office (ATO) has conducted the specified benefits and entitlements data-matching program for 15 years.
This program outlines the ATO's approach to specified benefits and entitlements data from Services Australia, to include the collection of a further 3 financial years of MES data, up to and including 2025–26 financial year.
We compare MES data with claims made in tax returns for the Medicare levy and Medicare levy surcharge.
Medicare gives Australian residents access to health care. It is partly funded by taxpayers who pay a Medicare levy of 2% of their taxable income. Medicare levy is payable by individuals residing in Australia who are eligible for Medicare benefits.
Some individuals, not entitled to Medicare benefits can claim an exemption from the Medicare levy in their tax return. Individuals not entitled to Medicare benefits for all, or part of a financial year must apply for a MES from Services Australia to access the exemption. Any financial year an individual is not entitled to Medicare benefits they will need to apply for a MES.
Exemption from the Medicare levy extends to the Medicare levy surcharge. Taxpayers without private hospital health insurance may have to pay the Medicare levy surcharge in addition to the Medicare levy. The calculation of the Medicare levy surcharge is based on the period without appropriate private hospital health insurance and your income.
We use the specified benefits and entitlements data to:
- ensure the exemptions are correctly claimed
- avoid any unnecessary contact from us for those that are genuinely entitled to claim theses offsets and exemptions.
Previous related programs
Our data matching activities on Medicare exemption claims for 2021–22 returns identified 133,151 individuals that held MES. We were able to validate 99% of these without needing to contact the taxpayer. Reviews were conducted on 6,100 claims.
Data providers
We are the matching agency and, in most cases the sole user of the data obtained during this data-matching program.
Data will be obtained from Services Australia.
Our formal information gathering powers
To ensure statutory requirements are met, we obtain data under our formal information gathering powers. These are contained in section 353-10 of Schedule 1 of the Taxation Administration Act 1953.
This is a coercive power, and data providers are obligated to provide the information requested.
We will use the data for tax and super compliance purposes.
Services Australia disclosure
Services Australia collects the data from applications made by taxpayers to enable a MES to be issued. The data is then provided by Services Australia to the ATO for the purposes of the ATO assessing the Medicare levy. The power to issue an MES is implied from section 251U(1)(f) of the Income Tax Assessment Act 1936 (ITAA 1936). That implied power is vested in the Health Minister, through the ability to certify a prescribed person.
Services Australia officers involved in the MES data exchange project are performing functions under a taxation law. Therefore, disclosures made by the officers are under the ‘performance of duties’ exception which is a permitted disclosure under Division 355 Schedule 1 of the Taxation Administration Act 1953 (TAA).
As the MES Data is collected and sent by Services Australia to the ATO for the purpose of administering taxation law, there will be no offence provided the record is only made to the extent that is necessary to administer the taxation law (item 1 in subsection 355-50(2) of Schedule 1 to the TAA).
Privacy Act
Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act and in particular:
- APP6.2(b) – the use of the information is required or authorised by an Australian law
- APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for our enforcement-related activities.
Data elements we collect
Client identification details – individuals
Identification details include:
- given name and surname
- residential address
- date of birth
Transaction details
Transaction details include:
- the periods the person was not entitled to Medicare benefits (start and end dates, current status)
Number of records
We expect to collect data on approximately 180,000 individuals each financial year for this program.
Data quality
We anticipate that the data quality will be of a high standard. Services Australia data is of a high quality and regularly relied on for administration of the tax system.
Data retention
We collect data under this program for all financial years from 2019–20 to 2025–26. We collected data biannually in January and August each financial year from 20192–20 to 2022–23. Daily ingestion of the data will be in place from the 2023–24 financial year.
We destroy data that is no longer required in accordance with the Archives Act 1983, and the records authorities issued by the National Archives of Australia, for both general and ATO-specific data.
We retain each financial year's data for 2 years from receipt of the final instalment of verified data files from Services Australia.
The data is required for this period for the protection of public revenue:
- retaining data for 2 years enables us to undertake verification activities where the information obtained indicates a taxpayer may not be entitled to claim the exemption, either partly or in its entirety
- the data enhances our ability to identify taxpayers who may not be complying with their tax and super obligations, which is integral to protecting the integrity of the tax and super systems
- the data is also used in multiple risk models, including models that establish retrospective profiles over multiple years aligned with period of review.
While increased data retention periods may increase the risk to privacy, we have a range of safeguards to manage and minimise this. Our systems and controls are designed to ensure the privacy and security of the data we manage.