Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Medicare levy surcharge
The amendment adds a new Schedule to this Bill. Schedule 3 amends the Medicare Levy Act 1986 and A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999 to ensure that an appropriate level of private patient hospital cover is held to avoid the imposition of the Medicare levy surcharge. These amendments will ensure that high income earners cannot avoid paying the Medicare levy surcharge by purchasing a low cost hospital product.
Date of effect: 1 July 2000.
Proposal announced: 24 May 2000.
Financial impact: Negligible.
Compliance cost impact: Minimal.
Summary of regulation impact statement
Impact: Low.
Main points:
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- Health funds will face information dissemination costs to existing and new members.
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- Those funds that have in the past attracted new high income earners to high front-end deductible hospital insurance policies, will, in the future, be less able to do so.
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