Commonwealth of Australia Explanatory Memoranda

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FAIRER PRIVATE HEALTH INSURANCE INCENTIVES (MEDICARE LEVY SURCHARGE-FRINGE BENEFITS) BILL 2012

                                2010-2011-2012


      THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                       HOUSE OF REPRESENTATIVES




      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



            SUPPLEMENTARY EXPLANATORY MEMORANDUM
          CORRECTION TO THE EXPLANATORY MEMORANDUM


              Amendments to be moved on behalf of the Government




                        (Circulated by the authority of the
Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP, and the Minister for
                      Health, the Hon Tanya Plibersek MP)
Table of contents
General outline and financial impact ....................................................... 3

Chapter 1           Amendments to the Fairer Private Health
                    Insurance Incentives Bills ............................................. 5

Chapter 2           Correction to the combined explanatory
                    memorandum ................................................................ 7




                                                                                               1
General outline and financial impact
Amendments to the Fairer Private Health Insurance Incentives
Bill 2011, the Fairer Private Health Insurance Incentives
(Medicare Levy Surcharge) Bill 2011 and the Fairer
Private Health Insurance Incentives (Medicare Levy
Surcharge--Fringe Benefits) Bill 2011
        These amendments update relevant provisions in: the Fairer Private
        Health Insurance Incentives Bill 2011; the Fairer Private Health Insurance
        Incentives (Medicare Levy Surcharge) Bill 2011; and the Fairer Private
        Health Insurance Incentives (Medicare Levy Surcharge--Fringe Benefits
        Bill 2011 to give effect to a revised commencement date of 1 July 2012
        for the Government's reforms to private health insurance.
        Date of effect: The amendments apply from 1 July 2012.
        Proposal announced: The revised date of effect of these Bills was
        announced as part of the 2011-12 Mid-Year Economic and Fiscal
        Outlook, on 29 November 2011.
        Financial impact: The amendments will have the following budgetary
        implications:

           2011-12        2012-13        2013-14         2014-15
           $369.6m         $22.1m         $15.4m         $15.4m

        Compliance cost impact: Low.




                                                                                 3
Chapter 1
Amendments to the Fairer Private Health
Insurance Incentives Bills

Amendments 1 to 4 to the Fairer Private Health Insurance
Incentives Bill 2011
         1.1       Amendment 1 updates the commencement provisions so that the
         legislation to introduce the Private Health Insurance Incentives Tiers
         commences from 1 July 2012.
         1.2       Amendment 2 ensures that the provisions to change a person's
         entitlement to the private health insurance tax offset contained in the
         Fairer Private Health Insurance Incentives Bill 2011 only apply from the
         2012-13 income year.
         1.3        Amendments 3 and 4 update the application provisions so that
         the legislation to means test the private health insurance rebate contained
         in the Fairer Private Health Insurance Incentives Bill 2011 only applies
         from the 2012-13 income year.


Amendments 1 and 2 to the Fairer Private Health Insurance
Incentives (Medicare Levy Surcharge) Bill 2011
         1.4       Amendment 1 updates the application provisions so that the
         legislation to change the operation of the Medicare levy surcharge
         contained in the Fairer Private Health Insurance Incentives (Medicare
         Levy Surcharge) Bill 2011 only applies from the 2012-13 income year.
         1.5       Amendment 2 repeals transitional provisions that would have
         applied for the 2011-12 income year. These provisions determined the
         amount of Medicare levy surcharge payable for the 2011-12 income year.
         With the amendments to the operation of the Medicare levy surcharge
         applying from 1 July 2012, these transitional provisions are no longer
         necessary.


Amendments 1 and 2 to the Fairer Private Health Insurance
Incentives (Medicare Levy Surcharge--Fringe Benefits) Bill
2011
         1.6       Amendment 1 updates the application provisions so that the
         legislation to change the operation of the Medicare levy surcharge
         contained in the Fairer Private Health Insurance Incentives (Medicare


                                                                                       5
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
             Levy Surcharge--Fringe Benefits) Bill 2011 only applies from the
             2012-13 income year.
             1.7       Amendment 2 repeals transitional provisions that would have
             applied for the 2011-12 income year. These provisions determined the
             amount of Medicare levy surcharge payable for the 2011-12 income year.
             With the amendments to the operation of the Medicare levy surcharge
             applying from 1 July 2012, these transitional provisions are no longer
             necessary.




6
Chapter 2
Correction to the combined explanatory
memorandum

Correction
        2.1        A correction is made to the combined explanatory memorandum
        for the Fairer Private Health Insurance Incentives package of Bills to
        clarify the income testing treatment for multiple adults covered by the
        same policy that is within Chapter 1, Table 1.3.
        2.2         In Chapter 1, Table 1.3, 4th row, last column -- omit the words:
              `Each adult is income tested separately with respect to the single tier
              thresholds',
              and substitute:
              `Each adult is income tested separately with respect to their own tier
              (which may be a single tier or couple/family tier as appropriate).'




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