Fairer Private Health Insurance Incentives Act 2012 (26 of 2012)

Schedule 1   Amendments

Income Tax Assessment Act 1997

5   Sections 61-210, 61-215 and 61-220

Repeal the sections, substitute:

61-210 Amount of the private health insurance tax offset

(1) The amount of the *tax offset is your *share of the PHII benefit in respect of the premium or amount.

Reduction because PHII benefit received in other forms

(2) Subsections (3), (4) and (5) apply if any of the following paragraphs apply:

(a) the amount of the premium was reduced because of the operation or purported operation of Division 23 of the Private Health Insurance Act 2007;

(b) a payment was made to a person because of the operation or purported operation of Division 26 of the Private Health Insurance Act 2007 in relation to the premium.

(3) Divide the total of the reduction (if any) and payment (if any) by the number of persons who are *PHIIBs in respect of the premium or amount.

(4) Reduce your *tax offset under subsection (1) to nil if the amount worked out under subsection (3) equals or exceeds your *share of the PHII benefit in respect of the premium or amount.

Note: If the amount worked out under subsection (3) exceeds your share of the PHII benefit, you are liable to pay the excess to the Commonwealth. See section 282-18 of the Private Health Insurance Act 2007 (Liability for excess private health insurance premium reduction or refund).

(5) Otherwise, reduce your *tax offset under subsection (1) by the amount worked out under subsection (3).

61-215 Reallocation of the private health insurance tax offset between spouses

(1) You can make a choice under this section in relation to the income year if:

(a) you are a *PHIIB in respect of the premium or amount; and

(b) on the last day of the income year, you are married (within the meaning of the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999; and

(c) the individual to whom you are married is also a PHIIB in respect of the premium or amount; and

(d) the individual to whom you are married has not made a choice under this section in relation to the income year.

Note: If you make a choice under this section, you might be liable to pay an amount under section 282-18 of the Private Health Insurance Act 2007 (Liability for excess private health insurance premium reduction or refund).

(2) If you make a choice under this section in relation to the income year:

(a) the amount (if any) of the *tax offset for the income year under section 61-205 in respect of the premium or amount of the individual to whom you are married is reduced to nil; and

(b) your tax offset for the income year under that section in respect of the premium or amount is increased by that amount.

(3) A choice under this section in relation to the income year can only be made in your *income tax return for the income year.

(4) A choice under this section in relation to an income year has effect for all premiums, or amounts in respect of premiums, paid during the income year.