Explanatory Memorandum
(Circulated by authority of the Minister for Health, the Honourable Greg Hunt MP)Notes on Clauses - Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018
Clause 1 - Short Title
This clause provides that the Bill, once enacted, may be cited as the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Act 2018.
Clause 2 - Commencement
This clause sets out when the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 and various provisions with it commence. The commencement date is 1 April 2019.
Clause 3 - Schedules(s)
This clause provides that legislation that is specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms.
Schedule 1 - Amendments
Medicare Levy Act 1986
Item 1
This item repeals paragraph 3(5)(b) that limits excess levels to $500 in any 12 month period in relation to a policy which only one person is insured , and $1000 in any 12 month period in relation to any other policy. A new paragraph 3(5)(b) will substitute for the repealed paragraph, and will define the maximum voluntary excess levels by referencing the applicable excess levels specified in section 45-1 of the Private Health Insurance Act 2007.
Item 2
This item repeals subsections 3(5A) (6) and (7). Subsection 3(5A) relates to a grandfathering provision that extended the Medicare levy surcharge exemption allowing an exemption for individuals on products with higher excesses who has been insured continuously since May 2000 as long as their excess amount had not increased since that time. As a result of the repealing of subsection 3(5A), certain individuals may become liable for the Medicare levy surcharge if they do not transfer to a product with an excess no more than the new maximum levels.
Subsections 3(6) and (7) are repealed as they were made redundant by the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007 Part 3 section 10.
Item 3
This item is an application provision which provides that for taxation purposes, the amendments made by items 1 and 2 in Schedule 1 apply in relation to the 2018-19 and later income years.