Consideration resumed from 26 March.

Senate’s amendments—

(1)    Clause 2, page 2 (table item 8), omit “and 2”, substitute “to 9E”.

(2)    Clause 2, page 2 (table items 9, 10 and 11), omit the table items.

(3)    Clause 2, page 2 (at the end of the table), add:

(4)    Clause 10, page 9 (line 5), after “If,”, insert “more than 15 days”.

(5)    Clause 27, page 22 (after line 15), after the definition of old Ombudsman, insert:

Ombudsman conversion time means 1 July 2007 or, if a later day is specified in Private Health Insurance (Transitional) Rules for the purposes of this definition, that later day.

(6)    Page 22 (after line 20), after Subdivision A, insert:

Subdivision AA—Conversion of Ombudsman from CAC to FMA body

27A  Conversion of Ombudsman from CAC to FMA body

        (1)    Section 238-1 and Division 253 of the new Act do not apply until the Ombudsman conversion time.

        (2)    Despite item 53 of Schedule 1 to this Act, during the period starting at the commencement time and ending immediately before the Ombudsman conversion time:

             (a)    the Private Health Insurance Ombudsman established by section 82ZR of the National Health Act 1953 is continued in existence; and

             (b)    staff employed or made available under section 82ZUG of the National Health Act 1953 immediately before the commencement time continue to be employed or made available under that section on the same terms as had effect immediately before the commencement time; and

             (c)    the following provisions of the National Health Act 1953 continue to apply in relation to that Ombudsman and those staff:

                   (i)    section 82ZR;

                  (ii)    section 82ZRAA;

                 (iii)    section 82ZRA;

                 (iv)    section 82ZRB;

                  (v)    Division 5 of Part VIC;

                 (vi)    section 82ZVD;

                (vii)    section 82ZVE (with the reference to section 135A being taken to be a reference to Division 323 of the new Act).

        (3)    During the period starting at the commencement time and ending immediately before the Ombudsman conversion time:

             (a)    a reference in the new Act to the Private Health Insurance Ombudsman (other than a reference in a provision mentioned in subsection (1)) is taken to be a reference to the Private Health Insurance Ombudsman established by section 82ZR of the National Health Act 1953; and

             (b)    a reference in the new Act to an APS employee in, or a person holding or performing the duties of an office in, the Statutory Agency of the Private Health Insurance Ombudsman is taken to be a reference to a member of the staff employed or made available under section 82ZUG of the National Health Act 1953 as continued in force by paragraph (2)(c).

(7)    Clause 28, page 22 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(8)    Clause 28, page 22 (line 25), omit “commencement time”, substitute “Ombudsman conversion time”.

(9)    Clause 29, page 23 (line 3), omit “commencement time”, substitute “Ombudsman conversion time”.

(10)  Clause 29, page 23 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(11)  Clause 32, page 24 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(12)  Clause 32, page 24 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(13)  Clause 33, page 24 (line 19), omit “commencement time”, substitute “Ombudsman conversion time”.

(14)  Clause 33, page 24 (line 23), omit “commencement time”, substitute “Ombudsman conversion time”.

(15)  Clause 33, page 24 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(16)  Clause 34, page 25 (line 8), omit “commencement time”, substitute “Ombudsman conversion time”.

(17)  Clause 34, page 25 (line 10), omit “commencement time”, substitute “Ombudsman conversion time”.

(18)  Clause 34, page 25 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(19)  Clause 34, page 25 (line 25), omit “commencement time”, substitute “Ombudsman conversion time”.

(20)  Clause 34, page 25 (line 28), omit “commencement time”, substitute “Ombudsman conversion time”.

(21)  Clause 34, page 26 (line 21), omit “commencement time”, substitute “Ombudsman conversion time”.

(22)  Clause 35, page 27 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(23)  Clause 35, page 27 (lines 9 to 18), omit subclauses (2) and (3), substitute:

        (2)    A thing done before the commencement time under a provision of Part VIC of the National Health Act 1953 has effect from the commencement time as if it had been done under the corresponding provision of the new Act:

             (a)    during the period starting at the commencement time and ending immediately before the Ombudsman conversion time—by the old Ombudsman; and

             (b)    at or after the Ombudsman conversion time—by the Private Health Insurance Ombudsman.

However, this is not taken to change the time at which the thing was actually done.

        (3)    A complaint that the old Ombudsman had begun to handle before the commencement time may be handled:

             (a)    during the period starting at the commencement time and ending immediately before the Ombudsman conversion time—by the old Ombudsman; and

             (b)    at or after the Ombudsman conversion time—by the Private Health Insurance Ombudsman;

under the new Act as if the complaint had been made under the new Act, even if the ground for making the complaint does not exist under the new Act.

(24)  Clause 36, page 28 (line 12), omit “commencement time”, substitute “Ombudsman conversion time”.

(25)  Clause 36, page 28 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(26)  Clause 36, page 28 (line 18), omit “commencement time”, substitute “Ombudsman conversion time”.

(27)  Clause 36, page 28 (lines 30 and 31), omit “commencement time”, substitute “Ombudsman conversion time”.

(28)  Clause 36, page 29 (line 5), omit “commencement time”, substitute “Ombudsman conversion time”.

(29)  Clause 36, page 29 (line 6), omit “commencement time”, substitute “Ombudsman conversion time”.

(30)  Clause 37, page 29 (line 12), before “The person”, insert “(1)”.

(31)  Clause 37, page 29 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(32)  Clause 37, page 29 (line 18), omit “commencement time”, substitute “Ombudsman conversion time”.

(33)  Clause 37, page 29 (line 20), omit “commencement time”, substitute “Ombudsman conversion time”.

(34)  Clause 37, page 29 (after line 20), at the end of the clause, add:

        (2)    If there is no person holding office as the Private Health Insurance Ombudsman under section 82ZR of the National Health Act 1953 immediately before the Ombudsman conversion time, then the person who is, immediately before that time, acting as the Private Health Insurance Ombudsman under section 82ZUA of the National Health Act 1953 is taken, from the Ombudsman conversion time, to have been appointed to act as the Private Health Insurance Ombudsman under section 253-10 of the new Act:

             (a)    during the vacancy or during the period or periods for which the person was appointed to act under the National Health Act 1953; and

             (b)    on the same terms and conditions as applied to the person immediately before the Ombudsman conversion time.

(35)  Clause 38, page 30 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(36)  Clause 38, page 30 (line 17), omit “commencement time”, substitute “Ombudsman conversion time”.

(37)  Clause 38, page 30 (line 21), omit “commencement time”, substitute “Ombudsman conversion time”.

(38)  Clause 38, page 30 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(39)  Clause 39, page 31 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(40)  Clause 39, page 31 (lines 8 and 9), omit “may be paid out of the Consolidated Revenue Fund, which is appropriated accordingly, for the purposes of the”, substitute “is appropriated out of the Consolidated Revenue Fund for the purpose of the performance of the functions of the”.

(41)  Schedule 1, page 43 (after line 17), after item 52, insert:

52A  Section 7

Repeal the section.

(42)  Schedule 2, page 46 (after line 9), before item 3, insert:

2A  Section 195-1 (at the end of the definition of hospital treatment)

Add “(as in force immediately before the commencement of the Private Health Insurance Act 2007)”.

(43)  Schedule 2, item 4, page 47 (line 7), omit “2004”, substitute “2000”.

(44)  Schedule 2, page 47 (after line 30), after item 8, insert:

Australian Securities and Investments Commission Act 2001

8A  Paragraphs 12BAA(7)(d) and (8)(b)

Omit “subsection 67(4) of the National Health Act 1953”, substitute “Division 121 of the Private Health Insurance Act 2007”.

Corporations Act 2001

8B  Paragraph 765A(1)(c)

Omit “subsection 67(4) of the National Health Act 1953”, substitute “Division 121 of the Private Health Insurance Act 2007”.

(45)  Schedule 2, item 75, page 58 (line 15), omit “2004”, substitute “2000”.

(46)  Schedule 3, item 2, page 63 (lines 13 to 16), omit the item, substitute:

2  Subsection 159J(6) (paragraph (aac) of the definition of separate net income)

Omit “Private Health Insurance Incentives Act 1998”, substitute “Division 26 of the Private Health Insurance Act 2007”.

(47)  Schedule 3, item 3, page 63 (lines 17 to 19), omit the item, substitute:

3  Subsection 170(10AA) (table item 25)

Repeal the table item, substitute:

(48)  Schedule 3, page 64 (after line 25), before item 8, insert:

7A  Section 13-1 (table item headed “private health insurance”)

Omit “61-H”, substitute “61-G”.

(49)  Schedule 3, item 8, page 64 (lines 26 to 28), omit the item, substitute:

8  Section 52-125

Omit “Chapter 2 of the Private Health Insurance Incentives Act 1998”, substitute “Division 26 of the Private Health Insurance Act 2007”.

(50)  Schedule 3, item 9, page 64 (lines 29 to 31), omit the item, substitute:

9  Subdivision 61-H of Division 61

Repeal the Subdivision, substitute:

Subdivision 61-G—Private health insurance offset complementary to Part 2-2 of the Private Health Insurance Act 2007

Guide to Subdivision 61-G

You can choose to claim a tax offset for a premium, or an amount in respect of a premium, paid under a private health insurance policy instead of having the premium reduced under Division 23 of the Private Health Insurance Act 2007 or receiving a payment under Division 26 of that Act.

61-200  What this Subdivision is about

Table of sections

Operative provisions

61-205        Entitlement to the private health insurance tax offset

61-210        Amount of the private health insurance tax offset

61-215        Tax offset after a person 65 years or over ceases to be covered by policy

61-220        How to work out the incentive amount

Operative provisions

61-205  Entitlement to the private health insurance tax offset

        (1)    If you are an individual (other than an individual in the capacity of an employer), you are entitled to a ^*tax offset for the 2007-08 income year or a later income year if:

             (a)    a premium, or an amount in respect of a premium, was paid by you, or by your employer as a ^*fringe benefit for you, under a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007), on or after 1 July 2007; and

             (b)    the premium, or amount in respect of a premium, was paid during the income year; and

             (c)    each person insured under the complying health insurance policy during the period covered by the premium or amount is, for the whole of the time that he or she is insured under the policy during that period, an eligible person within the meaning of section 3 of the Health Insurance Act 1973, or treated as such because of section 6, 6A or 7 of that Act.

        (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).

        (3)    However, you are not entitled to the ^*tax offset in respect of the payment of any premium, or any amount in respect of a premium, if:

             (a)    you have received an amount under Division 26 of the Private Health Insurance Act 2007 in relation to the payment; or

             (b)    the premium, or the amount in respect of a premium, was less than it would otherwise have been because of the operation of Division 23 of that Act.

Note:   In certain circumstances you can get a refund of the tax offset under Division 67.

61-210  Amount of the private health insurance tax offset

        (1)    The amount of the ^*tax offset for an income year is the sum of:

             (a)    30% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a ^*fringe benefit for you, under the policy in respect of days in the income year on which no person covered by the policy was aged 65 years or over; and

             (b)    35% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a fringe benefit for you, under the policy in respect of days in the income year on which:

                   (i)    at least one person covered by the policy was aged 65 years or over; and

                  (ii)    no person covered by the policy was aged 70 years or over; and

             (c)    40% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a fringe benefit for you, under the policy in respect of days in the income year on which at least one person covered by the policy was aged 70 years or over.

        (2)    However, if, before 1 January 1999, a person was registered, or eligible to be registered, under the Private Health Insurance Incentives Act 1997 in respect of the policy for the income year, the amount of the ^*tax offset for the income year is the greater of:

             (a)    the amount worked out under subsection (1); and

             (b)    the ^*incentive amount for the policy for the income year.

        (3)    If, because of the operation of Division 23 of the Private Health Insurance Act 2007, an amount paid by you, or by your employer as a ^*fringe benefit for you, under a policy was less than the amount that would otherwise have been payable, the ^*tax offset in respect of the amount paid is reduced by the amount of the difference.

61-215  Tax offset after a person 65 years or over ceases to be covered by policy

        (1)    If:

             (a)    at any time, the amount of a ^*tax offset in respect of premiums payable under an insurance policy (the original policy) was 35% or 40% of the premiums payable under the policy because a person aged 65 years or over (the entitling person) was insured under the original policy; and

             (b)    at that time, another person (other than a dependent child) was insured under the original policy; and

             (c)    the entitling person subsequently ceases to be insured under the policy;

subsections 61-210(1) and (2) apply in relation to a complying health insurance policy (whether or not the original policy) under which the other person is insured (other than for the purposes of working out the ^*incentive amount) as if:

             (d)    the entitling person were also insured under that policy; and

             (e)    the entitling person were the same age as the age at which he or she ceased to be insured under the original policy.

        (2)    Subsection (1) ceases to apply if a person (other than a dependent child) who was not insured under the original policy at the time the entitling person ceased to be insured under it becomes insured under the complying health insurance policy.

        (3)    Subsection (1) does not apply if its application would result in the amount of the ^*tax offset under subsection 61-210(1) or (2) being less than it would otherwise have been.

        (4)    Paragraph (1)(a) applies in relation to an amount of a ^*tax offset that is 35% or 40% of the premiums payable under an insurance policy whether the tax offset was available under this Subdivision or Subdivision 61-H as in force before 1 July 2007.

        (5)    In this section:

complying health insurance policy has the same meaning as in the Private Health Insurance Act 2007.

dependent child:

             (a)    has the meaning given in the Private Health Insurance Act 2007; and

             (b)    in paragraph (1)(b), in relation to a time before 1 July 2007, includes a dependent child within the meaning of the Private Health Insurance Incentives Act 1998.

61-220  How to work out the incentive amount

• (1)The incentive amount for a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007) for an income year is the amount worked out under this table:

        (2)    If the amount of the premium, or the amount in respect of a premium, paid by you, or by your employer as a ^*fringe benefit for you, under the policy is for part only of the income year, the incentive amount is worked out using this formula:

9A  Application of item 9

The repeal of Subdivision 61-H of the Income Tax Assessment Act 1997 and the substitution of Subdivision 61-G by this Schedule apply in relation to the 2007-2008 income year and later income years.

9B  Subsection 67-25(2)

Repeal the subsection (including the note), substitute:

Private health insurance

        (2)    Private health insurance tax offsets under Subdivision 61-G, except those arising under subsection 61-205(2), are subject to the refundable tax offset rules.

Note:   Subsection 61-205(2) deals with tax offsets for trustees who are assessed and liable to pay tax under section 98 of the Income Tax Assessment Act 1936.

9C  Subsection 995-1(1) (definition of incentive amount)

Omit “section 61-345”, substitute “section 61-220”.

Private Health Insurance Act 2007

9D  Section 20-1 (note)

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

9E  Subsection 26-1(4)

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

(51)  Schedule 3, page 66 (after line 8), at the end of the Schedule, add:

Taxation Administration Act 1953

17  Section 45-340 of Schedule 1 (method statement, step 1, paragraph (a))

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

18  Section 45-375 of Schedule 1 (method statement, step 1, paragraph (a))

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.