{"id":"C2004A00412","name":"A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999","slug":"a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"18 of 1999","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":6033,"registerId":"commonwealth-C2004A00412-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"## Part 1—Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.","sortOrder":1},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.","sortOrder":2},{"sectionNumber":"3","sectionType":"section","heading":"Definitions","content":"#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.","sortOrder":3},{"sectionNumber":"4","sectionType":"section","heading":"When does a person have private patient hospital cover?","content":"#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.","sortOrder":4},{"sectionNumber":"5","sectionType":"section","heading":"Who is a dependant of a person?","content":"#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.","sortOrder":5},{"sectionNumber":"6","sectionType":"section","heading":"What is a tier 2 earner and tier 3 earner","content":"#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):","sortOrder":6},{"sectionNumber":"7","sectionType":"section","heading":"When are people married?","content":"#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.","sortOrder":7},{"sectionNumber":"8","sectionType":"section","heading":"Who is a prescribed person?","content":"#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.","sortOrder":8},{"sectionNumber":"9","sectionType":"section","heading":"Application","content":"#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.","sortOrder":9},{"sectionNumber":"Part 2","sectionType":"part","heading":"Imposition of surcharge","content":"## Part 2—Imposition of surcharge","sortOrder":10},{"sectionNumber":"10","sectionType":"section","heading":"Imposition of Medicare levy surcharge","content":"#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.","sortOrder":11},{"sectionNumber":"Part 3","sectionType":"part","heading":"Amount of surcharge payable","content":"An Act to implement A New Tax System by imposing Medicare levy surcharge on reportable fringe benefits totals of some employees without private hospital insurance\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.\n\n#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.\n\n#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.\n\n#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.\n\n#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.\n\n#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):\n\n#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.\n\n#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.\n\n#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.\n\n## Part 2—Imposition of surcharge\n\n#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.\n\n## Part 3—Amount of surcharge payable\n\n### Division 1—General rule\n\n#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.\n\n### Division 2—Amount of surcharge for single person without dependants\n\n#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 3—Amount of surcharge for single person with dependants\n\n#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 4—Amount of surcharge for married person\n\n#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":12},{"sectionNumber":"Division 1","sectionType":"division","heading":"General rule","content":"An Act to implement A New Tax System by imposing Medicare levy surcharge on reportable fringe benefits totals of some employees without private hospital insurance\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.\n\n#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.\n\n#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.\n\n#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.\n\n#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.\n\n#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):\n\n#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.\n\n#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.\n\n#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.\n\n## Part 2—Imposition of surcharge\n\n#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.\n\n## Part 3—Amount of surcharge payable\n\n### Division 1—General rule\n\n#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.\n\n### Division 2—Amount of surcharge for single person without dependants\n\n#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 3—Amount of surcharge for single person with dependants\n\n#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 4—Amount of surcharge for married person\n\n#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":13},{"sectionNumber":"11","sectionType":"section","heading":"Amount of surcharge payable","content":"#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.","sortOrder":14},{"sectionNumber":"Division 2","sectionType":"division","heading":"Amount of surcharge for single person without dependants","content":"An Act to implement A New Tax System by imposing Medicare levy surcharge on reportable fringe benefits totals of some employees without private hospital insurance\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.\n\n#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.\n\n#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.\n\n#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.\n\n#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.\n\n#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):\n\n#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.\n\n#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.\n\n#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.\n\n## Part 2—Imposition of surcharge\n\n#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.\n\n## Part 3—Amount of surcharge payable\n\n### Division 1—General rule\n\n#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.\n\n### Division 2—Amount of surcharge for single person without dependants\n\n#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 3—Amount of surcharge for single person with dependants\n\n#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 4—Amount of surcharge for married person\n\n#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":15},{"sectionNumber":"12","sectionType":"section","heading":"Amount of surcharge for single person without dependants","content":"#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.","sortOrder":16},{"sectionNumber":"Division 3","sectionType":"division","heading":"Amount of surcharge for single person with dependants","content":"An Act to implement A New Tax System by imposing Medicare levy surcharge on reportable fringe benefits totals of some employees without private hospital insurance\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.\n\n#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.\n\n#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.\n\n#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.\n\n#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.\n\n#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):\n\n#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.\n\n#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.\n\n#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.\n\n## Part 2—Imposition of surcharge\n\n#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.\n\n## Part 3—Amount of surcharge payable\n\n### Division 1—General rule\n\n#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.\n\n### Division 2—Amount of surcharge for single person without dependants\n\n#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 3—Amount of surcharge for single person with dependants\n\n#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 4—Amount of surcharge for married person\n\n#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":17},{"sectionNumber":"13","sectionType":"section","heading":"Amount of surcharge for single person with dependants","content":"#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.","sortOrder":18},{"sectionNumber":"Division 4","sectionType":"division","heading":"Amount of surcharge for married person","content":"An Act to implement A New Tax System by imposing Medicare levy surcharge on reportable fringe benefits totals of some employees without private hospital insurance\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.\n\n#### 2 Commencement\n\n  This Act commences on the day on which the A New Tax System (Fringe Benefits Reporting) Act 1999 receives the Royal Assent.\n\n#### 3 Definitions\n\n  (1) In this Act, unless the contrary intention appears:\n\n> Assessment Act means the Income Tax Assessment Act 1936.\n\n> Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.\n\n> covered by an insurance policy that provides private patient hospital cover has a meaning affected by section 4.\n\n> Note: For limited purposes, sections 12, 13 and 14 also treat certain persons as being covered by an insurance policy that provides private patient hospital cover.\n\n> dependant of a person has the meaning given by section 5.\n\n> family tier 1 threshold, of a person for a year of income, means the family tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> income for surcharge purposes has the same meaning as in the Income Tax Assessment Act 1997.\n\n> married has a meaning affected by section 7.\n\n> prescribed person has the meaning given by section 8.\n\n> reportable fringe benefits total has the same meaning as in the Fringe Benefits Tax Assessment Act 1986.\n\n> resident of Australia has the meaning given by section 10.\n\n> singles tier 1 threshold, of a person for a year of income, means the singles tier 1 threshold (within the meaning of the Private Health Insurance Act 2007) of the person for the financial year corresponding to the year of income.\n\n> surcharge means Medicare levy surcharge imposed by section 10.\n\n> tier 2 earner has the meaning given by section 6.\n\n> tier 3 earner has the meaning given by section 6.\n\n  (2) Subject to subsection (1) and any other contrary intention, an expression used in both this Act and Part VIIB of the Assessment Act has the same meaning in this Act as it has in that Part.\n\n#### 4 When does a person have private patient hospital cover?\n\n  For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if:\n    (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007) that covers hospital treatment (within the meaning of that Act); and\n    (b) any excess payable in respect of benefits under the policy is no more than the applicable amount set out in section 45‑1 of that Act in any 12 month period.\n\n#### 5 Who is a dependant of a person?\n\n  A person is a dependant of another person for a period if the person would be a dependant of the other person for the period for the purposes of Part VIIB of the Assessment Act, disregarding subsections 251R(4), (5), (6B), (6C) and (6D) of that Act.\n\n#### 6 What is a tier 2 earner and tier 3 earner\n\n  (1) Subject to this section, for the purposes of this Act:\n    (a) tier 2 earner, for a year of income, means a tier 2 earner (within the meaning of the Private Health Insurance Act 2007) for the financial year corresponding to the year of income; and\n    (b) tier 3 earner, for a year of income, means a tier 3 earner (within the meaning of that Act) for the financial year corresponding to the year of income.\n  (2) In determining whether a person is a tier 2 earner or tier 3 earner for a year of income for the purposes of this Act, section 22‑30 of the Private Health Insurance Act 2007 operates with the modification set out in subsection (3).\n  (3) Replace paragraph 22‑30(1)(b) of the Private Health Insurance Act 2007 with the following paragraph:\n    (b) on any day in the year, the person has one or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999), other than a dependant to whom the person is married (within the meaning of that Act):\n\n#### 7 When are people married?\n\n  De facto couples treated as if married\n  (1) This Act applies to 2 persons (whether of the same sex or different sexes) as if they were married to each other for a period if:\n    (a) their relationship is registered for the period under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or\n    (b) they lived together in a relationship as a couple on a genuine domestic basis for the period, although not legally married to each other.\n  (1A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (1)(a) with another person, this Act applies as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (1)(a) with, the other person.\n  Persons living separately taken not to be married\n  (2) A person is taken not to be married to another person if they are living separately and apart.\n  New widows and widowers taken to be married until end of year\n  (3) If:\n    (a) the last person (the deceased) to whom another person was married during a year of income died during the year of income; and\n    (b) the death occurred while they were married;\n  the living person is taken to be married to the deceased during the period starting on the day the deceased died and ending on 30 June of the year of income.\n\n#### 8 Who is a prescribed person?\n\n  A person is a prescribed person for a period if the person would be a prescribed person for the purposes of Part VIIB of the Assessment Act during the period, disregarding subsection 251U(3) of that Act.\n\n#### 9 Application\n\n  This Act extends to every external Territory referred to in the definition of Australia.\n\n## Part 2—Imposition of surcharge\n\n#### 10 Imposition of Medicare levy surcharge\n\n  Surcharge imposed on reportable fringe benefits total\n  (1) Medicare levy surcharge is imposed on the reportable fringe benefits total for a year of income of a person who is a resident of Australia at any time during the year of income.\n\n> Note: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge is payable by the person.\n\n  Who is a resident of Australia—general rule\n  (2) A person is a resident of Australia if he or she is a resident of Australia as defined in subsection 6(1) of the Assessment Act.\n  Application: 1999‑2000 year of income onwards\n  (4) Subsection (1) applies to the 1999‑2000 year of income and later years of income.\n\n## Part 3—Amount of surcharge payable\n\n### Division 1—General rule\n\n#### 11 Amount of surcharge payable\n\n  General rule\n  The amount of surcharge payable by a person on the person’s reportable fringe benefits total for a year of income is the total of the amounts worked out under whichever of Divisions 2, 3 and 4 apply to the person for a period in the year of income.\n\n### Division 2—Amount of surcharge for single person without dependants\n\n#### 12 Amount of surcharge for single person without dependants\n\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s singles tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person does not have any dependants; and\n    (iii) the person is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  (2) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  (3) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.002.png)\n  (4) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (5) Increase the amount of each percentage mentioned in subsections (2) and (3) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 3—Amount of surcharge for single person with dependants\n\n#### 13 Amount of surcharge for single person with dependants\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if:\n    (a) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (b) during the whole of the period:\n    (i) the person is not a married person; and\n    (ii) the person has one or more dependants; and\n    (iii) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (iv) the person is not a prescribed person.\n  Special rules for applying subparagraph (1)(b)(iii)\n  (2) For the purposes of subparagraph (1)(b)(iii):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n  Amount of surcharge payable for whole year\n  (3) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if this Division applies to the person for the whole of the year of income.\n  Amount of surcharge payable for part of year\n  (4) If this Division applies to the person for only some of the days of the year of income, the amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of those days over Number of days in the year of income end fraction end formula](image.003.png)\n  (5) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (6) Increase the amount of each percentage mentioned in subsections (3) and (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n### Division 4—Amount of surcharge for married person\n\n#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.\n\n#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n\n#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":19},{"sectionNumber":"14","sectionType":"section","heading":"Who does this Division apply to?","content":"#### 14 Who does this Division apply to?\n\n  Application\n  (1) This Division applies to a person for a period in a year of income if, during the whole of the period:\n    (a) the person is a married person; and\n    (b) the person, or at least one of the person’s dependants, is not covered by an insurance policy that provides private patient hospital cover; and\n    (c) the person is not a prescribed person.\n  Special rules for applying paragraph (1)(b)\n  (2) For the purposes of paragraph (1)(b):\n    (a) the person is taken to be covered during the whole of the period by an insurance policy that provides private patient hospital cover if, apart from subsection 251U(2) of the Assessment Act, the person would be a prescribed person for the period because of paragraph 251U(1)(a), (b), (ca), (caa) or (cb) of that Act; and\n    (b) disregard each of the person’s dependants who:\n    (i) is a prescribed person for the period; or\n    (ii) would be a prescribed person for the period apart from subsection 251U(2) of the Assessment Act.\n\n> Note: Paragraphs 251U(1)(a), (b), (ca), (caa) and (cb) of the Assessment Act provide that the following are prescribed persons:\n\n> Note: defence personnel and members of their families who can get free medical treatment;\n\n> Note: people who can get free medical treatment under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019;\n\n> Note: people who receive certain payments under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.\n\n> Note: Subsection 251U(2) of the Assessment Act provides that a person who would otherwise be a prescribed person is not a prescribed person if one or more of his or her dependants are not prescribed persons.","sortOrder":20},{"sectionNumber":"15","sectionType":"section","heading":"Amount of surcharge if this Division applies for whole year","content":"#### 15 Amount of surcharge if this Division applies for whole year\n\n  When this section applies\n  (1) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income is 1% of that total if:\n    (a) this Division applies to the person for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (2) In working out whether subsection (1) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.\n  (3) Increase the amount of the percentage mentioned in subsection (1) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4) Increase the amount of the percentage mentioned in subsection (1) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.","sortOrder":21},{"sectionNumber":"16","sectionType":"section","heading":"Amount of surcharge if this Division applies for part of the year","content":"#### 16 Amount of surcharge if this Division applies for part of the year\n\n  When this section applies\n  (1) The amount of surcharge payable on a person’s reportable fringe benefits total for a year of income includes the amount worked out using the formula in subsection (4) if:\n    (a) this Division applies to the person for only part of the year of income; and\n    (b) either subsection (2) or (3) applies to the person.\n  Person married for whole year of income\n  (2) This subsection applies to the person if:\n    (a) the person is married for the whole of the year of income; and\n    (b) the sum of the person’s income for surcharge purposes, and the person’s spouse’s income for surcharge purposes, for the year of income exceeds the person’s family tier 1 threshold for the year of income; and\n    (c) the person’s income for surcharge purposes for the year of income exceeds $27,222.\n  Person married for part of the year of income\n  (3) This subsection applies to the person if:\n    (a) the person is married for only part of the year of income; and\n    (b) the person’s income for surcharge purposes for the year of income exceeds the person’s family tier 1 threshold for the year of income.\n  Amount of surcharge\n  (4) The amount of surcharge payable on the person’s reportable fringe benefits total for the year of income includes the amount worked out using the formula:\n  ![Start formula open bracket 1% of the person's reportable fringe benefits total for the year of income close bracket times start fraction Number of applicable days over Number of days in the year of income end fraction end formula](image.004.png)\n  where:\n\n> number of applicable days is the number of days in the year of income for which this Division applies to the person.\n\n  (4A) Increase the amount of the percentage mentioned in subsection (4) by 0.25 of a percentage point if the person is a tier 2 earner for the year of income.\n  (4B) Increase the amount of the percentage mentioned in subsection (4) by 0.5 of a percentage point if the person is a tier 3 earner for the year of income.\n  Special rule if person’s spouse is a presently entitled beneficiary in a trust estate\n  (5) In working out whether subsection (2) applies to a person whose spouse is a beneficiary presently entitled to a share in the net income of a trust estate in respect of which the trustee is liable to be assessed under section 98 of the Assessment Act, assume that:\n    (a) the spouse’s income for surcharge purposes included that share; and\n    (b) subsection 271‑105(1) in Schedule 2F to that Act did not apply in working out the net income of the trust estate.","sortOrder":22}],"analysis":{"kimi_summary":{"_metrics":{"completionTokens":703},"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"The legislation remains focused on its original purpose: imposing Medicare levy surcharge on reportable fringe benefits for high-income earners without private hospital insurance. While amendments have added tiered rates and refined definitions (particularly around de facto relationships and prescribed persons), these are evolutionary refinements rather than scope expansion. The core mechanism — taxing fringe benefits to parallel salary-based surcharge rules — remains unchanged."},"complexity_factors":["Multiple cross-references to other Acts (Income Tax Assessment Act 1936, 1997; Private Health Insurance Act 2007; Fringe Benefits Tax Assessment Act 1986)","Three separate calculation methods depending on family status (single without dependants, single with dependants, married)","Tiered surcharge rates (1%, 1.25%, 1.5%) based on income brackets defined in another Act","Complex definition of 'married' including de facto relationships, registered relationships, and special rules for widows/widowers","Modification of external Act provisions (section 22-30 of Private Health Insurance Act 2007) with substituted paragraphs","Multiple defined terms (12 in section 3 alone) that rely on definitions from other legislation","Pro-rata calculations for part-year applicability with fraction-based formulas","Special rules for trust beneficiaries and prescribed persons involving nested exceptions"],"plain_english_summary":"This Act imposes an extra tax called the **Medicare levy surcharge** on certain employees who receive fringe benefits (non-cash perks from their employer, like a company car) but don't have private hospital insurance.\n\n**Who it affects:**\n- Australian residents who receive **reportable fringe benefits** (benefits that must be declared on tax returns)\n- People who earn above income thresholds and don't have **private patient hospital cover** (hospital insurance from a private health insurer)\n\n**How it works:**\n- The surcharge is calculated as a percentage of your **reportable fringe benefits total** — the value of perks your employer gives you\n- The base rate is **1%**, but this increases to **1.25%** if you're a \"tier 2 earner\" or **1.5%** if you're a \"tier 3 earner\" (higher income brackets)\n\n**Different rules apply depending on your situation:**\n- **Single people without dependants** — pay if your income exceeds the singles threshold\n- **Single people with dependants** — pay if your income exceeds the family threshold and you or your dependants lack cover\n- **Married people** — pay based on combined income with your spouse, with special rules if you're only married part of the year\n\n**Key definitions:**\n- \"**Married**\" includes de facto couples (same-sex or opposite-sex) who live together on a genuine domestic basis, or registered relationships\n- \"**Prescribed persons**\" — mostly defence force members and veterans who get free medical treatment, who are exempt from the surcharge\n- \"**Private patient hospital cover**\" — insurance that covers hospital treatment with limited excess (out-of-pocket costs)\n\n**Why it matters:** This closes a loophole where high-income earners could avoid the Medicare levy surcharge by receiving income as fringe benefits rather than salary. It encourages people to take out private health insurance, reducing pressure on the public hospital system."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The Act remains narrowly focused on extending the Medicare levy surcharge to a taxpayer’s reportable fringe benefits total. Its provisions (liability categories, percentage rates, proration, and cross‑references to other Acts for definitions and thresholds) are consistent with that original purpose. The few modifications it makes to how definitions operate (for example, instructing a specific modification to a paragraph of the Private Health Insurance Act for determining tier status — section 6(3)) are technical adjustments to implement the same core policy, not an expansion beyond the Act’s original scope."},"complexity_factors":["Extensive cross‑references to other Acts (Income Tax Assessment Acts 1936 & 1997, Private Health Insurance Act 2007, Fringe Benefits Tax Assessment Act 1986) — key terms and thresholds are defined elsewhere (see section 3(2), sections 4 and 6).","Multiple defined terms with interdependencies (e.g. reportable fringe benefits total, income for surcharge purposes, singles/family tier 1 thresholds, tier 2/3 earner) — increases interpretive load (section 3).","Three separate liability Divisions (single without dependants, single with dependants, married) each with distinct entry conditions and pro‑rata mechanics (Divisions 2–4; sections 12–16).","Part‑year and day‑count proration formulas that require day‑by‑day status tracking (sections 12(3), 13(4), 16(4)).","Tiered percentage adjustments (base 1% with +0.25% and +0.5% increases for tier 2 and tier 3 earners) that require separately determining tier status under the Private Health Insurance Act (sections 12–16 and section 6).","Multiple exceptions and special rules (prescribed persons exclusions; special rules for dependants; spouse trust‑income assumption for threshold tests) that create nested conditions (sections 8, 13(2), 14(2), 15(2), 16(5)).","Marriage and de facto relationship rules with special treatments (registration, living together, separations, widower rule) — affect which Division applies (section 7).","Reliance on external numeric thresholds (singles/family tier 1 thresholds, section 45‑1 excess cap) that change annually or by regulation, meaning the Act’s operation varies over time (section 3 and section 4).","Overlapping reporting/admin responsibilities across employers, taxpayers and the ATO — practical complexity in matching RFBT records to private health insurance coverage and family status (sections 4, 10–11)."],"plain_english_summary":"**What this law does (mechanics)**\n\n- The Act makes the Medicare levy surcharge (MLS) apply to a person’s reportable fringe benefits total (RFBT) — that is, certain non‑cash benefits reported by employers (section 10 and section 11).  In plain terms: some employees who receive fringe benefits (company cars, employer‑paid health insurance, etc., to the extent those benefits are reportable) can be charged an extra levy based on the value of those benefits.\n\n- The base rate applied to the RFBT is 1% of the RFBT for each applicable person or period (sections 12–16).  That base percentage is increased by 0.25 percentage points for “tier 2” earners and by 0.5 percentage points for “tier 3” earners (sections 12(4)–(5), 13(5)–(6), 15(3)–(4), 16(4A)–(4B)).\n\n- Which of the three calculation rules applies depends on the taxpayer’s family/marital/dependant situation and income:\n  - Single person without dependants (Division 2 — section 12).\n  - Single person with dependants (Division 3 — section 13).\n  - Married person (Division 4 — sections 14–16).  For married people the household income (person + spouse) is compared to the family threshold and the person must also exceed a small individual floor to attract the surcharge (see section 15(1)(b)–(c)).\n\n- The Act uses thresholds defined in the Private Health Insurance Act 2007 (called the singles/family tier 1 thresholds) to decide who is liable (definitions in section 3 and the cross‑references in sections 6 and 12–16).  The Act also contains rules for proration when a person is in an applying category for only part of the year (the pro‑rata formulas in sections 12(3), 13(4) and 16(4)).\n\n- A person is only liable for the surcharge on RFBT if they (or, in some cases, their dependants) are not covered by an approved private patient hospital insurance policy (section 4 and the special rules in sections 13(2) and 14(2)).  Certain people (called “prescribed persons”) who receive free or other specified medical treatment are excluded (section 8 and notes to sections 13 and 14).\n\n- The Act is tightly cross‑linked to other tax and health‑insurance laws for key definitions and thresholds: the Income Tax Assessment Acts (1936 and 1997) and the Private Health Insurance Act 2007, and the Fringe Benefits Tax Assessment Act 1986 (section 3(2) and many notes).\n\n**Who this affects**\n\n- Australian residents (as defined by the Income Tax Assessment Act) who receive reportable fringe benefits and who do not have qualifying private patient hospital cover (sections 10 and 4).\n- Employers and payroll/reporting systems, because RFBTs must be reported under the fringe benefits framework (the surcharge is calculated from the reportable fringe benefits total — section 11).\n- Married couples and households where combined incomes are used to test thresholds (sections 14–16).\n- People in special categories (defence personnel, veterans, certain social security recipients) who are treated as “prescribed persons” and may be excluded (notes to sections 13 and 14).\n\n**Why it matters (official rationale and practical implications)**\n\n- The Act’s stated purpose is to extend the Medicare levy surcharge regime so that RFBTs are also subject to the surcharge (short title and long title; section 10).  That is, it treats some non‑cash employee benefits as part of the base on which the MLS can be levied.\n\n- Practical effects and the incentives the law creates:\n  - Who pays: the surcharge is payable by the individual taxpayer on their RFBT (sections 10 and 11).  This increases the after‑tax cost of receiving reportable fringe benefits for people who do not have qualifying private hospital cover.\n  - Behavioural incentives: by making RFBTs liable to the MLS unless the person (or household) has private hospital cover, the law creates a financial incentive for affected taxpayers to obtain qualifying private patient hospital cover (section 4) or to restructure remuneration to reduce reportable fringe benefits.\n  - Administrative chain: the Australian Taxation Office (ATO) applies the test, using RFBT as reported under fringe benefits rules and cross‑referencing private health insurance status and the thresholds from the Private Health Insurance Act (see sections 3, 4, 10–16).  Employers’ reporting and recordkeeping therefore affect tax administration.\n\n**Costs, trade‑offs and implementation risks (mechanics, not judgement)**\n\n- Compliance and administrative cost: the rule requires matching fringe‑benefit reports with individuals’ private health insurance status, family/marital/dependant status, and income thresholds drawn from other Acts (sections 3–6, 12–16). That increases administrative complexity for taxpayers, employers and the ATO.\n\n- Cross‑Act dependency risk: the measure relies on definitions and thresholds in at least three other Acts (Income Tax Assessment Acts, Private Health Insurance Act, Fringe Benefits Tax Act). Any change in those external definitions or thresholds alters how this surcharge operates (section 3(2); sections 6 and 12–16).\n\n- Targeting and distribution of burden: the revenue from the surcharge is paid by a relatively identifiable group (people with reportable fringe benefits and without qualifying private hospital cover). The costs (higher effective tax on fringe benefits) are concentrated on those people; administrative costs are borne by employers and the tax administration.\n\n- Implementation edge cases: the Act contains multiple special‑case rules — e.g. proration for part‑year coverage, spouse trust‑income adjustments, and disregarding certain dependants when applying the prescribed person rules (sections 12(3), 13(2), 15(2), 16(5)). These produce complexity and some room for disputes over facts and timing.\n\n**Key sections to check in practice**\n- Start here for liability and base mechanism: section 10 (imposition) and section 11 (general rule for amount).\n- Liability categories and percentages: sections 12–16 (Divisions 2–4).\n- Private hospital cover test: section 4.  Definitions and cross‑references in section 3.\n\n(References in parentheses are to the sections of the Act cited above.)"},"issue_detection":{"absurdities":[{"type":"circular_definition","section":"3 (definition of 'resident of Australia') and 10(2)","severity":"low","reasoning":"The definition of 'resident of Australia' in section 3 says to look at section 10, but section 10(2) merely adopts the ITAA 1936 definition wholesale. The internal cross-reference adds no content and creates a two-step loop before arriving at the substantive definition. While ultimately resolvable, it is an unnecessary circularity that could confuse interpretation.","confidence":0.72,"description":"Circular definition: 'resident of Australia' is defined in section 3 as having 'the meaning given by section 10', but section 10(2) defines it as a person who 'is a resident of Australia as defined in subsection 6(1) of the Assessment Act'. The definition in section 3 points to section 10, which simply re-routes to another Act without adding anything, making the internal definitional reference redundant and potentially circular if read in isolation."},{"type":"other","section":"7(3)","severity":"medium","reasoning":"Section 15(1)(b) and 16(2)(b) require adding the spouse's income for surcharge purposes to determine whether the family threshold is exceeded. Where the spouse died mid-year, their income for surcharge purposes will be a partial-year figure. While this is workable in practice, the fiction of ongoing marriage to a deceased person interacts awkwardly with provisions that contemplate a living spouse's financial position, and the deceased cannot hold insurance cover, creating potential absurdity in the insurance coverage test in s.14(1)(b) for the post-death period.","confidence":0.75,"description":"A living person is legally treated as 'married to the deceased' for the period from the date of death to 30 June of the income year. This creates the logical absurdity of imposing a legal marital status on a relationship between a living person and a dead person, potentially triggering surcharge obligations calculated by reference to the 'spouse's income for surcharge purposes' of a person who can no longer earn income, receive assessments, or comply with any obligation."},{"type":"circular_definition","section":"7(1A)","severity":"medium","reasoning":"The Act uses 'married' as a defined term (affected by s.7) but then uses the apparently narrower phrase 'legally married' in s.7(1A) without definition. This creates interpretive uncertainty: if 'legally married' means marriage under the Marriage Act 1961 only, s.7(1A) operates coherently; but if it picks up the Act's broader deeming, it could cancel the very deeming it sits within.","confidence":0.68,"description":"Section 7(1) deems de facto couples to be married for purposes of this Act. Section 7(1A) then provides that if either person was 'legally married to another person' during the period, the Act applies as if they were not legally married to that other person. However, the Act's own definition of 'married' includes de facto relationships under s.7(1). The phrase 'legally married' in s.7(1A) is undefined and ambiguous — it is unclear whether it refers only to formal legal marriage or also captures the deemed marriages created by s.7(1) itself, potentially creating an internal loop where the deeming provision undermines itself."},{"type":"other","section":"10 (missing subsection 3)","severity":"low","reasoning":"The absence of s.10(3) is unexplained on the face of the Act. Without access to legislative history, a reader cannot determine whether the missing subsection contained operative provisions affecting liability. This is a structural defect that undermines interpretive confidence.","confidence":0.8,"description":"Section 10 jumps from subsection (2) to subsection (4), with no subsection (3) present in the text. This creates a structural gap in the legislative numbering. While likely explained by a repealed provision, the gap creates uncertainty about whether subsection (3) was intentionally omitted, accidentally omitted, or contains operative content that has been lost."},{"type":"impossible_compliance","section":"14(1)(b) read with 7(3)","severity":"medium","reasoning":"The s.7(3) fiction extends marriage to the end of the income year. The deceased spouse would, in theory, count as a 'dependant' (or the spouse for s.14 purposes) during the post-death period. Determining whether a deceased person is 'covered by an insurance policy' during that period is practically impossible and logically absurd.","confidence":0.65,"description":"Division 4 applies where the person is a 'married person' AND 'the person, or at least one of the person's dependants, is not covered by an insurance policy'. Where the spouse has died (triggering the s.7(3) fiction), it is impossible to determine whether the deceased 'dependant/spouse' is covered by an active insurance policy, since a deceased person cannot hold or be covered by a health insurance policy. This creates an impossible compliance scenario for the post-death period."},{"type":"circular_definition","section":"6(3) — modification of Private Health Insurance Act 2007 s.22-30","severity":"low","reasoning":"The modified paragraph in s.6(3) explicitly references 'the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999' — i.e., the very Act performing the modification. While not a true logical circle (the definitions are ultimately grounded), it creates an unusual and potentially confusing interpretive structure where an Act modifies another Act using its own definitions.","confidence":0.6,"description":"Section 6(3) purports to modify the operation of a provision of the Private Health Insurance Act 2007 (s.22-30(1)(b)) solely for the purposes of this Act. The modified paragraph itself uses the defined term 'dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999)' — i.e., this very Act. This creates a cross-referential loop: this Act modifies another Act's provision by substituting a definition from this Act, which itself depends on definitions in the Assessment Act (s.5), to determine tier status under the Private Health Insurance Act 2007, which is then fed back into this Act. While technically resolvable, it is an unnecessarily convoluted self-referential structure."},{"type":"other","section":"15(1)(c) and 16(2)(c)","severity":"medium","reasoning":"The asymmetry between dynamically defined thresholds (family tier 1, singles tier 1) and the static $27,222 figure means that over time, as income levels rise due to inflation, the $27,222 threshold will cease to function as a meaningful filter. This is an internal design inconsistency, though not a logical contradiction per se.","confidence":0.82,"description":"The hardcoded threshold of '$27,222' in sections 15(1)(c) and 16(2)(c) appears to be a fixed nominal dollar figure with no indexation mechanism apparent on the face of the Act. All other thresholds (singles tier 1, family tier 1) are defined by reference to the Private Health Insurance Act 2007, which presumably provides for indexation. The hardcoded $27,222 figure will become increasingly irrelevant over time and creates an internal inconsistency in how thresholds are treated."}],"contradictions":[{"severity":"medium","section_a":"7(1) — de facto couples treated as married","section_b":"7(1A) — exclusion where legally married to another","confidence":0.65,"description":"Section 7(1) deems a de facto couple to be married for purposes of this Act. Section 7(1A) then provides that if either person is 'legally married to another person' or in a registered relationship with another person, the Act applies as if they were not legally married to that other person. The contradiction arises because s.7(1A) uses the phrase 'legally married' rather than 'married (within the meaning of this Act)'. If a person is in two simultaneous de facto relationships both triggering s.7(1), it is unclear which, if any, s.7(1A) overrides. The provision does not address the scenario where a person has multiple concurrent de facto relationships both deemed 'marriages' under s.7(1)."},{"severity":"medium","section_a":"12(1)(b)(i) — Division 2 requires person to be 'not a married person'","section_b":"7(3) — widows/widowers taken to be married until 30 June","confidence":0.7,"description":"Division 2 applies only where 'the person is not a married person'. Section 7(3) deems a newly widowed person to remain married until 30 June of the income year. This means a widow/widower who has no dependants (other than the deceased spouse) and no private hospital cover cannot fall into Division 2 (barred by the deemed marriage), but may also struggle to satisfy Division 4 (which requires the married person or a dependant to lack cover — and the deceased cannot hold cover). The interaction potentially leaves a widow/widower in a limbo where they partially fit multiple Divisions or none cleanly."},{"severity":"low","section_a":"14(1) — Division 4 applies where person 'is a married person' without income threshold","section_b":"15(1)(b) and (c) — surcharge only payable if combined income exceeds family threshold AND personal income exceeds $27,222","confidence":0.6,"description":"Division 4 (s.14) triggers on the basis of marital status and lack of cover, with no income threshold at the application stage. However, s.15 and s.16 then impose income thresholds before any surcharge is actually payable. This means the Act first applies Division 4 to determine that it applies, then imposes separate income tests to determine whether surcharge is actually payable. A person can be 'within Division 4' with no surcharge payable because they fail the income tests, yet the Act does not make clear what consequences flow from Division 4 applying but the income tests not being met, particularly for persons who transition between categories mid-year."},{"severity":"high","section_a":"10(1) — surcharge imposed on person who 'is a resident of Australia at any time during the year of income'","section_b":"12(1), 13(1), 14(1) — Divisions require conditions to be met 'during the whole of the period'","confidence":0.72,"description":"Section 10(1) triggers liability for the surcharge if the person is a resident at any time during the year. However, Divisions 2, 3 and 4 require conditions (no marriage, no dependants, no cover) to be satisfied 'during the whole of the period'. A person who is a resident for only one day of the year triggers s.10(1) but may find that none of Divisions 2, 3 or 4 apply to any 'period' because the conditions for each Division cannot be satisfied for a contiguous period. The result is that s.11 (which quantifies the surcharge as the total under whichever Divisions apply) yields zero, leaving a person technically liable under s.10(1) with no mechanism in Part 3 to calculate any amount."},{"severity":"low","section_a":"12(4) and 12(5) — tier 2 increases by 0.25pp, tier 3 increases by 0.5pp","section_b":"No provision addresses cumulative application of both tier increases","confidence":0.55,"description":"Sections 12(4) and 12(5) (and their equivalents in ss.13 and 15-16) provide separate increases for tier 2 earners (0.25pp) and tier 3 earners (0.5pp). The provisions are drafted as separate, independently applicable increases with no exclusion of double application. While a person cannot simultaneously be both a tier 2 and tier 3 earner (as these are mutually exclusive income bands under the Private Health Insurance Act 2007), the drafting does not expressly state this mutual exclusivity within this Act, creating superficial ambiguity about whether both could theoretically apply."}]},"summary":{"complexity_score":7,"scope_assessment":{"changed":true,"description":"The original 1999 Act was designed simply to extend the Medicare Levy Surcharge to fringe benefits for employees without private hospital cover. Over time, the Act was amended to incorporate income-tiered surcharge rates (Tier 2 at 1.25% and Tier 3 at 1.5%), same-sex de facto relationship recognition, and alignment with the Private Health Insurance Act 2007 (including updated definitions of complying policies and excess thresholds). These amendments broadened the surcharge's reach to higher-income earners and modernised relationship definitions well beyond the original flat-rate, heterosexual-marriage-focused scope."},"complexity_factors":["Heavy cross-referencing to multiple other Acts: Income Tax Assessment Act 1936, Income Tax Assessment Act 1997, Fringe Benefits Tax Assessment Act 1986, Private Health Insurance Act 2007, Veterans' Entitlements Act 1986, Military Rehabilitation and Compensation Act 2004, Social Security Act 1991, Acts Interpretation Act 1901","Three separate calculation regimes (single no dependants, single with dependants, married) each with whole-year and part-year variants, creating six distinct calculation pathways","Three income tiers (Tier 1, Tier 2, Tier 3) that each adjust the surcharge rate, requiring external reference to the Private Health Insurance Act 2007 to determine which tier applies","The definition of 'married' has multiple sub-rules covering de facto couples, registered relationships, separated couples, widows/widowers and overlapping marriages","The 'prescribed person' concept and its exceptions require navigating subsections of the Income Tax Assessment Act 1936 (s.251U and s.251R) with deliberate carve-outs from those provisions","Special rules for trust estate beneficiaries (spouse's income calculation) add an additional layer for less common but real-world scenarios","Pro-rata day-counting calculations for part-year scenarios add mathematical complexity on top of the legal eligibility questions","The document itself appears to repeat content multiple times (possible formatting/compilation issue), which significantly impairs readability"],"plain_english_summary":"This Act levies an extra Medicare Levy Surcharge on Australian residents who receive reportable fringe benefits from their employer but do not hold adequate private hospital cover. It hits taxpayers above income thresholds and is charged as 1%–1.5% of the reportable fringe benefits total, calculated pro rata for periods uninsured.\n\nExemptions include having adequate private hospital insurance, being a prescribed person (e.g., certain defence or veteran recipients), or having income below the relevant threshold."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999","history":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999/history","analysis":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999/analysis","conflicts":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999/conflicts","importantCases":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999/important-cases","documents":"/api/acts/a-new-tax-system-medicare-levy-surcharge-fringe-benefits-act-1999/documents"}}