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19 Mar 12 Health Insurance and Medicare Levy Surcharge Bills await Royal Assent

On 15 March 2012, the following Bills were passed by the Senate without amendment:

  • Fairer Private Health Insurance Incentives Bill 2011
  • Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011
  • Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2011

The Fairer Private Health Insurance Incentives Bill 2011 amends the Age Discrimination Act 2004, Income Tax Assessment Act 1936, Income Tax Assessment Act 1997, Private Health Insurance Act 2007, Taxation Administration Act 1953 and Taxation (Interest on Overpayments and Early Payments) Act 1983 to reduce the amount of private health insurance rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold.

The Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011 amends the Medicare Levy Act 1986 to increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold.

The Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2011 amends the A New Tax System (Medicare Levy Surcharge--Fringe Benefits) Act 1999 to increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.

From 1 July 2012, three new private health insurance incentive tiers will apply. The new thresholds, amount of rebates and surcharge rates for each tier are set out in an ATO factsheet.

Annual indexation to average weekly earnings will apply to the tier income thresholds.

The Bills now await Royal Assent.

 


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