Income Tax Assessment Act| Apprentice Tax Practitioner Program
[The next Division is Division 61.]
Division 61—Generally applicable tax offsets
[The next Subdivision is Subdivision 61-G.]
Subdivision 61-G—Private health insurance tax offset
61-300 What this Subdivision is about
You can choose to claim a tax offset for premiums paid under private health insurance policies, instead of having premiums reduced under the Private Health Insurance Incentives Act 1997.
Operative provisions
61-305 Entitlement to the private health insurance tax offset
61-310 Amount of the private health insurance tax offset
61-315 Priority between different taxpayers
61-320 Priority agreements
Operative provisions
61-305 Entitlement to the private health insurance tax offset
(1) You are entitled to a *tax offset for an income year in respect of premiums paid under a private health insurance policy (within the meaning of the Private Health Insurance Incentives Act 1997) if:
(a) the policy was one in respect of which you were eligible under Division 3 of the Private Health Insurance Incentives Act 1997 to participate in the incentives scheme (within the meaning of that Act); or
(b) the policy was one in respect of which another person was so eligible, but your taxable income for that year was required by subsection 3-3(2) or 3-4(2) of that Act to be taken into account for the purpose of determining whether the other person was so eligible.
(2) You are also entitled to the *tax offset if:
(a) you are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust estate; and
(b) the beneficiary who is presently entitled to the share of the income of the trust estate would be entitled to the tax offset because of subsection (1) if his or her taxable income for the income year were limited to that share.
(3) However:
(a) you are not entitled to the *tax offset in respect of any premiums that were reduced under section 5-1 of the Private Health Insurance Incentives Act 1997; and
(b) you are not entitled to the tax offset in respect of any premiums in respect of which another person’s entitlement to the tax offset has priority under section 61-315; and
(c) if, on a day during the income year, the policy ceased to be a dependent child policy (within the meaning of section 5-4 of that Act)—you are not entitled to the tax offset in respect of premiums to the extent that they relate to a part of the income year occurring after that day; and
(d) if all of the persons covered by the policy were dependent children at any time during the income year—you are not entitled to the tax offset unless your taxable income for that year was required by subsection 3-3(2) or 3-4(2) of that Act to be taken into account in applying the income test under section 3-3 or 3-4 of that Act.
61-310 Amount of the private health insurance tax offset
(1) The amount of the *tax offset is:
(a) if the premiums in respect of which you are entitled to the tax offset cover the whole of the income year—the annual incentive amount for the private health insurance policy in question; or
(b) if those premiums cover only part of the income year—the amount worked out as follows:
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Number of days covered by those premiums during income year |
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Annual incentive amount * |
_____________________________________________ |
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Number of days in the income year |
(2) In subsection (1):
annual incentive amount means the annual incentive amount for the private health insurance policy under section 5-3 of the Private Health Insurance Incentives Act 1997.
(3) However, if 2 or more persons are entitled to the *tax offset in respect of those premiums, each person having made payments in respect of those premiums, the amount of the tax offset is the amount worked out as follows:
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Amount paid by you in respect of those premiums |
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Amount of tax offset under subsection 1 |
* |
_____________________________________________ |
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Total amount paid in respect of those premiums |
(4) For the purposes of subsection (3), a payment made jointly in respect of a premium by 2 or more persons is taken to be a separate payment, made by each of them, of an amount equal to the joint payment divided by the number of persons who made it.
(5) For the purposes of subsection (3), if:
(a) 2 or more persons are entitled to the *tax offset in respect of those premiums; and
(b) payments have been made in respect of those premiums by another person who is not entitled to the tax offset;
each of the persons entitled to the tax offset is taken to have made a payment in respect of those premiums of an amount equal to the amount of the payments made by the other person divided by the number of persons entitled to the tax offset.
61-315 Priority between different taxpayers
(1) This section establishes the priority of entitlements to the *tax offset if more than one person would, apart from paragraph 61-305(3)(b), be entitled to the tax offset in respect of the same premiums paid under a private health insurance policy (within the meaning of the Private Health Insurance Incentives Act 1997).
Note: See paragraph 61-305(3)(b) for the significance of priority of entitlements.
(2) All of the persons who would, apart from paragraph 61-305(3)(b), be entitled to the *tax offset in respect of those premiums may make an agreement (a priority agreement) in respect of the income year specifying one of them as the person whose entitlement is to have priority.
Note: Section 61-320 contains further provisions about priority agreements.
(3) That person’s entitlement in respect of those premiums has priority over the entitlements of all of the others.
(4) If:
(a) a *priority agreement is not made in respect of the income year; and
(b) one of the persons who would, apart from paragraph 61-305(3)(b), be entitled to the *tax offset in respect of those premiums has made payments in respect of those premiums; and
(c) another of the persons who would, apart from paragraph 61-305(3)(b), be entitled to the tax offset in respect of those premiums has not made payments in respect of those premiums;
the entitlement of the person who made those payments has priority over the entitlement of the person who has not.
(5) If:
(a) a *priority agreement is not made in respect of the income year; and
(b) none of the persons who would, apart from paragraph 61-305(3)(b), be entitled to the *tax offset in respect of those premiums has made payments in respect of those premiums;
the entitlement of the contributor in respect of the private health insurance policy has priority over the entitlement of each person other than the contributor.
(6) In subsection (5):
contributor means the person who is treated as the contributor by the health fund (within the meaning of the Private Health Insurance Incentives Act 1997) that issued the private health insurance policy.
(7) Despite paragraph 61-305(3)(b) and subsections (3), (4) and (5) of this section, the entitlement to the *tax offset of either of the following persons in respect of those premiums:
(a) a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust estate;
(b) the beneficiary who is presently entitled to the share of the income of the trust estate;
is not affected by the other person’s entitlement to the tax offset in respect of those premiums having priority.
61-320 Priority agreements
(1) A *priority agreement has no effect unless it is made on or before:
(a) the day on which the first *income tax return of any of the persons who made the agreement was lodged for the income year in respect of which the agreement was made; or
(b) such later day as the Commissioner allows.
(2) A *priority agreement has no effect, and is taken never to have had effect, if none of the persons who made the agreement retain the agreement for the period of 5 years starting on the day on which the agreement was made.
(3) If the *priority agreement is lost or destroyed and the Commissioner is satisfied that one of the persons who made the agreement has a document (the substitute priority agreement) that:
(a) is a copy of the priority agreement; or
(b) properly records all the matters set out in the priority agreement and was in existence when the priority agreement was lost or destroyed;
the substitute priority agreement is taken, for the purposes of this Subdivision, to be, and to have been at all times after the priority agreement was lost or destroyed, the priority agreement.
(4) If:
(a) the *priority agreement is lost or destroyed; and
(b) the Commissioner is satisfied that the loss or destruction occurred because of circumstances beyond the control of the persons who made the agreement; and
(c) subsection (3) does not apply;
the agreement is not affected, and is taken never to have been affected, by subsection (2).
(5) Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment at any time for the purposes of giving effect to this section.
[The next heading is the heading to Chapter 3.]
Income Tax Assessment Act| Apprentice Tax Practitioner Program