{"id":"C2010A00031","name":"Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010","slug":"midwife-professional-indemnity-run-off-cover-support-payment-act-2010","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"31 of 2010","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":43653,"registerId":"commonwealth-C2010A00031-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Short title [see Note 1]","content":"#### 1 Short title \\[see Note 1\\]\n\n  This Act may be cited as the Midwife Professional Indemnity (Run‑off Cover Support Payment) Act 2010.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  This Act commences, or is taken to have commenced, on 1 July 2010.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Definitions","content":"#### 3 Definitions\n\n  In this Act, unless the contrary intention appears:\n\n> contribution year has the meaning given by section 5.\n\n> eligible insurer has the same meaning as in the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.\n\n> premium income, for a contribution year, has the meaning given by section 7.\n\n> run‑off cover support payment means a payment that is payable under Part 3 of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Imposition of run‑off cover support payment","content":"#### 4 Imposition of run‑off cover support payment\n\n  For each contribution year, a run‑off cover support payment is imposed as a tax on each eligible insurer.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Contribution year","content":"#### 5 Contribution year\n\n  (1) Subject to subsection (2), each:\n    (a) financial year; or\n    (b) other period of 12 months specified in the Rules;\n  that starts on or after 1 July 2010 is a contribution year.\n  (2) The Rules may declare that a financial year specified in the Rules is the last contribution year. If they do so, no subsequent financial year, or period of 12 months specified in the Rules for the purposes of paragraph (1)(b), is a contribution year.\n  (3) Rules made for the purposes of paragraph (1)(b) may specify a different period for a particular eligible insurer or class of eligible insurers. If they do so, the reference in subsection (1) to the period is taken, in its application to that insurer or to an insurer of that class, to be a reference to that period for that insurer or class.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Amount of run‑off cover support payment","content":"#### 6 Amount of run‑off cover support payment\n\n  (1) The amount of the run‑off cover support payment imposed on an eligible insurer for a contribution year is the applicable percentage of the insurer’s premium income for:\n    (a) the period of 12 months ending on 31 May in the contribution year; or\n    (b) such other period as is specified in the Rules.\n  (2) The applicable percentage is:\n    (a) 15%; or\n    (b) such lower percentage as is specified in the Rules for the contribution year.\n  (3) Rules made for the purposes of paragraph (1)(b) may specify a different period for a particular eligible insurer or class of eligible insurers. If they do so, the reference in subsection (1) to the period is taken, in its application to that insurer or to an insurer of that class, to be a reference to that period for that insurer or class.\n  (4) Rules made for the purposes of paragraph (2)(b) may specify a different applicable percentage for a particular eligible insurer or class of eligible insurers. If they do so, the reference in subsection (1) to the applicable percentage is taken, in its application to that insurer or to an insurer of that class, to be a reference to that percentage for that insurer or class.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Premium income","content":"#### 7 Premium income\n\n  (1) An eligible insurer’s premium income for a period is the sum of all of the premiums paid during the period to the insurer for midwife professional indemnity cover provided for eligible midwives by contracts of insurance with the insurer, and includes the sum of all amounts paid to the insurer during the period that are amounts of a kind specified in the Rules for the purposes of this subsection.\n  (2) However, the amount of an eligible insurer’s premium income for a period under subsection (1) is reduced by:\n    (a) any amount of GST payable during the period for any supply made by the insurer for which premiums and other amounts referred to in subsection (1) are consideration; and\n    (b) the sum of all amounts of stamp duty payable during the period, under a law of a State or Territory, in connection with midwife professional indemnity cover, or contracts of insurance, referred to in subsection (1); and\n    (c) the sum of all amounts payable during the period that are amounts of a kind specified in the Rules for the purposes of this subsection; and\n    (d) the amount worked out under subsection (3).\n  (3) The amount referred to in paragraph (2)(d) is worked out as follows:\n\n![](image.002.png)\n\n  where:\n\n> applicable rate is the applicable percentage under subsection 6(2) for the insurer, expressed as a decimal fraction.\n\n> net premium is the sum of all the premiums referred to in subsection (1) reduced by the amounts referred to in paragraphs (2)(a), (b) and (c) in relation to those premiums.\n\n  (4) In this section:\n\n> consideration has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.\n\n> eligible midwife has the same meaning as in the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.\n\n> GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.\n\n> midwife professional indemnity cover has the same meaning as in the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010.\n\n> supply has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Rules","content":"#### 8 Rules\n\n  The Minister may, by legislative instrument, make Rules providing for matters:\n    (a) required or permitted by this Act to be provided in the Rules; or\n    (b) necessary or convenient to be provided in order to carry out or give effect to this Act.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Regulations","content":"#### 9 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.","sortOrder":8}],"analysis":{"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"},"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The Act appears to remain tightly focused on its original purpose: imposing a levy on eligible midwife insurers to fund the Commonwealth's run-off cover obligations. There are no provisions suggesting scope creep beyond that narrow funding mechanism."},"complexity_factors":["Cross-references to a companion Act (Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010) for key definitions, requiring readers to consult multiple pieces of legislation","Premium income calculation involves a mathematical formula (rendered as an image) designed to prevent the tax from compounding on itself — this circular calculation is conceptually tricky","Multiple layers of adjustment to premium income (GST exclusion, stamp duty exclusion, formula reduction), each with their own definitions drawn from other Acts","Ministerial Rules can override or modify almost every key parameter (rate, periods, applicable insurers), creating uncertainty about the operative figures at any given time","Flexible contribution year definition allows periods other than standard financial years, with possible variation by insurer class","Definitions imported from both the companion Act and the GST Act, fragmenting the legal framework across three statutes"],"plain_english_summary":"This Act levies a tax on insurers who sell professional indemnity cover to midwives to fund the Commonwealth’s scheme that meets “run‑off” liabilities when midwives stop practising. The tax is charged annually (up to 15% of relevant premium income) with adjustments to avoid double‑counting.\n\nIt primarily affects eligible insurers (and indirectly midwife premiums) and ensures patients can still pursue compensation for past care even after a midwife retires."},"issue_detection":{"absurdities":[{"type":"impossible_compliance","section":"7(3)","severity":"high","reasoning":"The Act imposes a tax obligation with a quantum determined in part by a formula that is literally invisible. An eligible insurer cannot calculate their own liability, a court cannot adjudicate disputes, and the ATO cannot assess compliance. A taxing statute must be certain as to the amount of tax imposed — this violates that foundational principle. The formula's absence is not a minor drafting gap; it is central to the computation of premium income under s7(2)(d), which feeds directly into s6(1).","confidence":0.98,"description":"The formula referenced in subsection 7(3) is displayed as a missing image placeholder '[image.002.png]', rendering the calculation of the deduction amount under paragraph 2(d) entirely unknowable from the face of the legislation."},{"type":"self_contradicting","section":"6(4)","severity":"medium","reasoning":"Section 6(1) sets out the formula as 'the applicable percentage of the insurer's premium income' but the cross-reference in s6(4) says the modification applies to 'the reference in subsection (1) to the applicable percentage.' This is a misdirected cross-reference; it should logically point to subsection (2), not (1). While the intent is clear, the operative legal mechanism is technically misdirected, creating potential ambiguity about which provision is modified by the Rules.","confidence":0.75,"description":"Subsection 6(4) states that Rules specifying a different applicable percentage cause 'the reference in subsection (1) to the applicable percentage' to be taken as a reference to the different percentage — but subsection 6(1) contains no reference to the applicable percentage at all. The applicable percentage appears only in subsection 6(2)."},{"type":"other","section":"5(3)","severity":"medium","reasoning":"The contribution year is a foundational concept used in sections 4, 5, 6, and 7. If it can differ per insurer, then the single imposition mechanism in s4 ('for each contribution year') operates on a fragmented, insurer-specific timeline. This is legally operable but internally incoherent — there is no singular 'contribution year' for the scheme as a whole, only a family of them, which the drafting does not clearly accommodate.","confidence":0.65,"description":"Subsection 5(3) allows Rules to specify a different 12-month period for a particular insurer, but when that power is exercised, the Act deems 'the reference in subsection (1) to the period is taken... to be a reference to that period.' This creates a situation where the definition of 'contribution year' itself varies insurer-by-insurer, potentially meaning two insurers are in different 'contribution years' simultaneously, undermining the coherence of s4 which imposes tax 'for each contribution year.'"},{"type":"retroactive_impossibility","section":"2","severity":"medium","reasoning":"An eligible insurer could not have known, prior to the Act's actual enactment, that a tax was being imposed on their premium income from 1 July 2010 onward. While retrospective taxation is not constitutionally prohibited in Australia, it is logically contradictory to impose a compliance obligation (paying a tax) on a period during which no legal obligation yet existed. The phrase 'taken to have commenced' is a legal fiction that papers over a genuine retroactivity problem.","confidence":0.7,"description":"The Act uses the phrase 'commences, or is taken to have commenced, on 1 July 2010.' The disjunctive 'or is taken to have commenced' implies the Act may have been enacted after 1 July 2010 and applies retrospectively. The Act imposes a tax obligation under s4 from that date, meaning tax liability may be imposed on conduct that occurred before the Act was legally in force."},{"type":"circular_definition","section":"7(3) and 7(1)","severity":"low","reasoning":"The structure of s7 creates a layered calculation where the s7(2)(d) deduction is computed from net premium (which excludes s7(2)(d)), avoiding strict circularity. However, this is not made explicit on the face of the provision — a reader could reasonably ask whether 'net premium' should include the s7(2)(d) reduction, which would make the formula genuinely circular and unsolvable. The drafting relies on an implicit interpretation to avoid logical collapse.","confidence":0.6,"description":"The definition of 'net premium' in s7(3) is self-referential in a potentially circular way: it is defined as 'the sum of all the premiums referred to in subsection (1) reduced by the amounts referred to in paragraphs (2)(a), (b) and (c).' The 'net premium' is then used in the (missing) formula to calculate the amount under s7(2)(d), which is itself one of the reductions applied to arrive at premium income. Premium income thus depends on a deduction that depends on net premium, which depends on other deductions from gross premium — not circular per se, but only non-circular because s7(2)(d) is explicitly excluded from the net premium calculation. This near-circularity is fragile and the exclusion is implicit rather than express."}],"contradictions":[{"severity":"medium","section_a":"6(1)","section_b":"6(4)","confidence":0.75,"description":"Section 6(4) purports to modify 'the reference in subsection (1) to the applicable percentage' when Rules specify a different percentage for a class of insurers. However, s6(1) refers to 'the applicable percentage' only as a component of the formula, while s6(2) is the provision that actually defines what the applicable percentage is. The modification power in s6(4) is directed at the wrong subsection, creating a contradiction between the identified locus of modification and the actual location of the defined term."},{"severity":"medium","section_a":"5(1)","section_b":"5(3)","confidence":0.68,"description":"Section 5(1) defines a contribution year as a single uniform period (financial year or specified 12-month period) applicable generally. Section 5(3) allows the Rules to specify a different period for particular insurers, with the result that the 'contribution year' is simultaneously different things for different insurers. This contradicts the singular and universal nature of 'contribution year' as used in s4, which imposes the tax liability uniformly 'for each contribution year.'"},{"severity":"medium","section_a":"6(1)(a)","section_b":"5(1)(a)","confidence":0.82,"description":"Section 5(1)(a) defines a contribution year as a financial year (1 July to 30 June). Section 6(1)(a) calculates the payment based on the 12-month period ending 31 May within the contribution year. This means the assessment period for calculating the tax amount (ending 31 May) does not align with and ends one month before the close of the contribution year for which the tax is imposed (30 June). The tax for a full contribution year is therefore calculated on income earned in a period that predates and does not correspond to that year."},{"severity":"low","section_a":"8","section_b":"9","confidence":0.72,"description":"The Act provides two separate law-making powers: the Minister may make 'Rules' under s8, and the Governor-General may make 'Regulations' under s9. However, no provision in the Act expressly requires anything to be prescribed by Regulations specifically — all operative delegations throughout the Act refer exclusively to 'the Rules.' Section 9 therefore confers a regulation-making power with no identified subject matter within this Act, rendering it either redundant or of uncertain scope relative to s8."}]},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose: imposing a specific tax on insurers to fund run-off cover for midwives. The scope has not expanded beyond this narrow funding mechanism."},"complexity_factors":["Mathematical formula in section 7(3) requiring calculation of net premiums and applicable rates","Multiple cross-references to the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 for defined terms","Conditional logic allowing Minister to specify alternative periods, percentages, and end dates via Rules","Nested deductions in section 7(2) requiring subtraction of GST, stamp duty, and other amounts before calculating the tax base","Class-based differentiation allowing different rules for different categories of insurers","Delegated legislative power allowing significant substantive detail to be determined by Minister-made Rules rather than primary legislation"],"plain_english_summary":"This law creates a special tax called a \"run-off cover support payment\" that private health insurers must pay to the government. Here's what it does:\n\n**Who pays:** Private insurers who provide professional indemnity insurance to midwives (called \"eligible insurers\").\n\n**What they pay:** A percentage (normally 15%) of the premiums they've collected from midwives for malpractice insurance, minus certain deductions like GST and stamp duty.\n\n**When they pay:** Every \"contribution year\" (basically each financial year starting from 1 July 2010, though the government can set different 12-month periods or declare an end date).\n\n**Why it exists:** This tax funds a government scheme that helps cover the cost of insurance claims against midwives who have retired, stopped practicing, or otherwise left the workforce (called \"run-off cover\"). When insurance companies stop covering someone, they still need money set aside for future claims that might arise from past work. This payment ensures there's a pool of money to cover those future claims.\n\n**Key features:**\n- The Minister can make rules to adjust the percentage rate, change the time periods, or set different rules for different insurers\n- The tax is calculated on premium income collected up to 31 May each year\n- The government can declare when the scheme will end\n\n**In short:** It's a funding mechanism to ensure retired midwives remain covered for past malpractice claims, with insurers footing the bill through this dedicated tax."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"The Act establishes a tax framework to fund run‑off cover support payments but delegates substantial scope and rate choices to Rules and regulations (ss5, 6, 8, 9). That delegation permits the executive to declare the last contribution year, vary the applicable percentage and accounting period, and treat particular insurers or classes differently without amending the Act, meaning the operational scope can be altered administratively after enactment."},"complexity_factors":["Tax imposed on a defined class (eligible insurers) but key parameters (rate, accounting period, class treatment) are delegated to Rules (ss5, 6, 8) — increases administrative discretion and variability.","Calculation requires detailed premium‑income accounting with permitted reductions for GST, stamp duty and rule‑specified items, plus a formulaic adjustment (s7(1)–(3)) — raises compliance and recordkeeping complexity.","Cross‑references to another Act for defined terms (eligible insurer, eligible midwife, midwife professional indemnity cover) and to the GST Act for 'consideration' and 'supply' — requires reading multiple instruments.","Power for Rules to set different periods/percentages for particular insurers or classes (ss5(3), 6(3)–(4)) — creates bespoke treatment and variance across the sector.","Ministerial Rules (legislative instrument) plus Governor‑General regulations — dual delegated‑law pathway adds procedural complexity (ss8, 9).","Potential interactions with state/territory stamp duties and GST regimes create multijurisdictional calculation issues (s7(2)(a)–(b)).","The Act sets the tax's existence but not administrative collection, timing, enforcement or appeal mechanisms — implementation detail likely in Rules/regulations, increasing operational uncertainty.","Numeric calculation includes an adjustment using the applicable percentage (s7(3)) which can affect netting and rounding — technical accounting detail for insurers."],"plain_english_summary":"This Act imposes a tax on eligible insurers to fund run‑off cover support payments for eligible midwives, calculated as a percentage (15% by default) of an insurer’s midwife indemnity premium income for a specified 12‑month period (s4, s6, s7). The Minister may change the percentage, the accounting period, and treat insurers or classes differently via Rules; the Governor‑General may make regulations (s5, s6, s8, s9). Insurers must report premium income net of GST, stamp duty and other reductions (s7), creating an ongoing compliance and cash‑flow obligation."}},"importantCases":[],"_links":{"self":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010","history":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010/history","analysis":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010/analysis","conflicts":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010/conflicts","importantCases":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010/important-cases","documents":"/api/acts/midwife-professional-indemnity-run-off-cover-support-payment-act-2010/documents"}}