Private Health Insurance Incentives Act 1997

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Act No. No. 55 of 1997 as amended

[This Act is repealed by Act No. 127 of 1998]

Consolidated as in force on 1 July 2000

(includes amendments up to Act No. 127 of 1998)

This Act has uncommenced amendments. For uncommenced amendments, see the endnotes.

Prepared by the Office of Legislative Drafting, Attorney-General’s Department, Canberra

Contents

Part 1—Preliminary 1

Division 1—Preliminary 1

1-1 Short title [see Notes 1 and 2]......................1

1-2 Commencement [see Note 1].......................1

1-3 Definitions.................................1

Part 2—The incentives scheme 1

Division 2—Introduction 1

2-1 What this Part is about...........................1

Division 3—Who is eligible to participate in the scheme? 2

3-1 Eligibility to participate in the scheme.................2

3-2 Appropriate private health insurance cover...............2

3-3 Income test—policies covering only one person............3

3-4 Income test—policies covering more than one person........4

3-5 Meaning of taxable income........................6

Division 4—How do people participate in the scheme? 6

4-1 Registration by Health Insurance Commission.............6

4-2 Eligibility to apply for registration....................6

4-3 Applications for registration.......................7

4-4 Notifying the Health Insurance Commission..............8

4-5 Refusal to register............................10

4-6 Revocation of registration........................10

4-7 Notification requirements—registered persons............11

4-8 Notification requirements—health funds...............11

4-9 Variation of registration.........................12

4-10 Retention of applications by health funds...............12

Division 5—What effect does the scheme have on insurance premiums? 12

5-1 Reduction in premiums.........................12

5-2 Participant in the incentives scheme..................13

5-3 Annual incentive amounts........................14

5-4 Policies that cease to be dependent child policies..........15

5-5 Persons who are not eligible persons for part of a financial year..16

5-6 Premiums paid in respect of certain periods around 1 July 1997..16

Part 3—Reimbursement of health funds 17

Division 6—Introduction 17

6-1 What this Part is about..........................17

Division 7—How do health funds become participating funds? 17

7-1 Becoming a participating fund.....................17

7-2 Requirements for applications.....................17

7-3 Consideration of applications......................18

7-4 Notice of Minister’s decision......................19

Division 8—How are participating funds reimbursed? 19

8-1 Health funds may claim reimbursement................19

8-2 Requirements for claims.........................19

8-3 Amounts payable to the health fund..................20

8-4 Adjustments to amounts.........................21

8-5 Notifying health funds if amount is not payable...........22

8-6 Reconsideration of decisions......................22

8-7 Appropriation...............................23

Part 4—Administering the incentives scheme 23

Division 9—Introduction 23

9-1 What this Part is about..........................23

Division 10—How is the scheme administered? 24

10-1 General administration of this Act...................24

10-2 Audits by Commission..........................24

10-3 Commission may require production of applications........25

10-4 Information to be provided to the Commissioner of Taxation...25

Division 11—When and how does the government recover payments? 26

11-1 Recovery of payments..........................26

11-2 Interest on amounts recoverable....................27

11-3 Write off and waiver...........................27

Division 12—How is information protected? 28

12-1 Principles relating to personal information..............28

12-2 Use etc. of information relating to another person..........29

Part 5—Miscellaneous 29

Division 13—Miscellaneous 29

13-1 Review by Administrative Appeals Tribunal.............29

13-2 Exclusion of certain State insurance..................30

13-3 False or misleading information in applications...........30

13-4 Application of the Criminal Code...................30

13-5 Regulations................................30

Schedule 1—Dictionary 31

1 Definitions.................................31

An Act to provide incentives for private health insurance, and for related purposes

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Part 1—Preliminary

Division 1—Preliminary

1-1 Short title [see Notes 1 and 2]

This Act may be cited as the Private Health Insurance Incentives Act 1997.

1-2 Commencement [see Note 1]

This Act commences on the day on which it receives the Royal Assent.

1-3 Definitions

Expressions used in this Act (or in a particular provision of this Act) that are defined in the Dictionary in Schedule 1 have the meanings given to them in the Dictionary.

Part 2—The incentives scheme

Division 2—Introduction

2-1 What this Part is about

This Part is about how people who are covered by private health insurance policies providing hospital cover, ancillary cover or combined cover can participate in a scheme under which the premiums payable under those policies are reduced.

Table of Divisions

2 Introduction

3 Who is eligible to participate in the scheme?

4 How do people participate in the scheme?

5 What effect does the scheme have on insurance premiums?

Note: The incentives scheme is complemented by the private health insurance tax offset, provided for by Subdivision 61-G of the Income Tax Assessment Act 1997. People can choose to claim the tax offset instead of having their premiums reduced.

Division 3—Who is eligible to participate in the scheme?

3-1 Eligibility to participate in the scheme

A person is eligible, in respect of a financial year, to participate in the incentives scheme in respect of a private health insurance policy if:

(a) the health fund that issued the policy is, for the year, a participating fund (see Division 7); and

(b) the person is eligible to apply under Division 4 for registration in respect of the policy for that year (see section 4-2); and

(d) the income test under section 3-3 or 3-4 (whichever is applicable) is satisfied in respect of that year; and

(e) the person is, at any time during that year, an eligible person within the meaning of section 3 of the Health Insurance Act 1973, or is treated as such a person because of section 6 of that Act.

3-2 Appropriate private health insurance cover

(1) The policy provides appropriate private health insurance cover if:

(a) it provides hospital cover (see subsection (2)); or

(b) it provides ancillary cover (see subsection (3)); or

(2) The policy provides hospital cover if:

(a) it is an applicable benefits arrangement, within the meaning of section 5A of the National Health Act 1953, to which paragraph 5A(1)(a) of that Act applies; and

(b) the annual premium payable for the policy is not less than:

(i) if the policy covers only one person—$250, or such other amount as the Minister determines in writing; or

(ii) if the policy covers more than one person—$500, or such other amount as the Minister determines in writing.

(3) The policy provides ancillary cover if:

(a) persons covered by the policy are covered (wholly or partly) for liability to pay fees and charges in respect of ancillary health benefits within the meaning of section 67 of the National Health Act 1953; and

(b) the annual premium payable for the policy is not less than:

(i) if the policy covers only one person—$125, or such other amount as the Minister determines in writing; or

(ii) if the policy covers more than one person—$250, or such other amount as the Minister determines in writing.

(4) In subsections (2) and (3):

annual premium means the amount of premium payable if the policy were to apply for one year, whether or not the policy applies, in the particular case in question, for that period.

(5) Determinations made for the purposes of subparagraph (2)(b)(i) or (ii) or (3)(b)(i) or (ii) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

(6) The policy provides combined cover if it provides both hospital cover and ancillary cover.

3-3 Income test—policies covering only one person

(1) If the policy covers only one person, the income test is satisfied in respect of the financial year in question if the sum of the taxable incomes of all of the persons whose incomes are required by subsection (2) to be taken into account is less than the maximum amount under subsection (4).

Note: For taxable income, see section 3-5.

(2) The persons whose incomes are to be taken into account are:

(a) if the person covered by the policy is not a dependent child during the financial year—that person and the partner (if any) of that person; or

(b) if the person covered by the policy is a dependent child at any time during that year—any parent of that person, and the partner (if any) of the parent, but only if, in respect of that year:

(i) the parent, or his or her partner, made one or more payments of premiums in respect of the policy; or

(ii) a person (other than a parent of the dependent child or the partner (if any) of that parent) made one or more such payments, under an arrangement entered into with the parent or partner.

(3) For the purposes of subsection (2), a person is the partner of another person only if, on the last day of the financial year, the person is the partner of that person.

(4) The maximum amount is:

(a) if at all times during the financial year the person covered by the policy is not a dependent child and is not the partner of another person—$35,000; or

(b) if at any time during the financial year the person covered by the policy is not a dependent child and is the partner of another person—$70,000; or

Note: For dependent child, parent and partner, see the Dictionary.

3-4 Income test—policies covering more than one person

(1) If the policy covers more than one person, the income test is satisfied in respect of the financial year in question if the sum of the taxable incomes of all of the persons whose incomes are required by subsection (2) to be taken into account is less than the maximum amount under subsection (4).

Note: For taxable income, see section 3-5.

(2) The persons whose incomes are to be taken into account are:

(a) each person covered by the policy who is not a dependent child during the financial year; and

(b) the partner (if any) of each such person; and

(c) if all of the persons covered by the policy are dependent children at any time during that year—any parent of any of the persons covered, and the partner (if any) of the parent, but only if, in respect of that year:

(i) the parent, or his or her partner, made one or more payments of premiums in respect of the policy; or

(ii) a person (other than a parent of the dependent child or the partner (if any) of that parent) made one or more such payments, under an arrangement entered into with the parent or partner.

(3) For the purposes of subsection (2), a person is the partner of another person only if, on the last day of the financial year, the person is the partner of that person.

(4) The maximum amount is:

(a) if the persons covered by the policy do not include 2 or more dependent children at any time during the financial year concerned—$70,000; or

(b) if, at any time during the financial year, 2 or more dependent children are covered by the policy—the amount worked out as follows:

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Example: If the policy covers the members of a family that has 3 dependent children, the maximum amount under subsection (4) is:

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Note: For dependent child, parent and partner, see the Dictionary.

3-5 Meaning of taxable income

In section 3-3 or 3-4:

taxable income, in relation to a person, means the person’s taxable income, within the meaning of the Income Tax Assessment Act 1936, for the financial year in question, and includes any share in the net income of a trust estate:

(a) to which the person is presently entitled as a beneficiary; and

(b) in respect of which the trustee of the trust estate in that capacity is liable to be assessed under section 98 of that Act; and

Division 4—How do people participate in the scheme?

4-1 Registration by Health Insurance Commission

(1) A person who is eligible to apply for registration in respect of a private health insurance policy for a financial year (see section 4‑2) may apply under section 4-3, to the health fund that issued the policy, to be registered by the Commission in respect of the policy for that year.

(2) If the health fund receives such an application, it must notify the Commission of the application (see section 4-4).

(3) On receiving a notice under subsection (2), the Commission must register the person in respect of the policy for that financial year, unless the Commission is satisfied that:

(a) the person is not eligible to participate in the incentives scheme; or

(b) the notice contains information that is incorrect.

Note: Refusals to register are reviewable under section 13-1.

4-2 Eligibility to apply for registration

(1) Any person who is covered by the policy (other than a dependent child) is eligible to apply for registration in respect of the policy for the financial year. If every person covered by the policy is a dependent child at any time during that year, any parent of any of them is eligible to apply.

Note: For dependent child and parent, see the Dictionary.

(2) A person is not eligible to apply for registration in respect of the policy for the financial year if:

(a) another person has already applied for registration in respect of the policy for that year; and

(b) the Commission:

(i) has not refused to register that person; or

(ii) has not revoked that person’s registration.

4-3 Applications for registration

(1) An application under this section must be in a form approved by the Minister, and must include a declaration by the applicant to the effect that:

(a) the applicant has estimated the sum of the taxable incomes, for the financial year in question, of each person whose income must be taken into account under section 3-3 or 3‑4 in respect of the policy for that financial year; and

(b) the applicant believes that he or she will be eligible to participate in the incentives scheme for that financial year.

(2) An estimate under paragraph (1)(a) must be made in the way determined by the Minister in writing.

(3) The application must state the following details:

(a) the applicant’s full name;

(b) the applicant’s date of birth;

(d) the applicant’s Medicare card number;

(e) whether the policy in respect of which the applicant has applied to be registered covers only one person or covers more than one person;

(f) the full name and date of birth of each person covered by the policy (other than the applicant);

(g) whether any of those persons are dependent children;

(h) the full name and date of birth of each person (other than a person covered by the policy) whose income must be taken into account under section 3-3 or 3-4 in respect of the policy for the financial year in question;

(i) any other information determined in writing by the Minister.

(4) For the purposes of paragraph (3)(i), the Minister must not determine that an applicant must provide:

(a) the tax file number of any person; or

(b) any information about the applicant’s income, or the income of any other person, other than that the applicant believes that the income test is satisfied in respect of the policy for the financial year in question.

(5) Determinations under subsections (2) and (3) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

(6) An application under this section may be made:

(a) if the application is for registration in respect of a policy for the financial year that began on 1 July 1997—not later than 31 December 1998; or

(b) if the application is for registration in respect of a policy for the financial year that began on 1 July 1998—not later than 31 December 1999.

(7) A declaration referred to in subsection (1) must be in a form approved by the Minister.

4-4 Notifying the Health Insurance Commission

(1) A health fund must notify the Commission of an application given to the health fund under section 4-3 no later than whichever of the following days is applicable:

(a) if the health fund receives the application on a day that is on or before the 21st day of a month—the last day of the notification period for the following month; or

(b) if the health fund receives the application on a day that is on or after the 22nd day of a month—the last day of the notification period for the second month after that day.

Note: For notification period, see the Dictionary.

(2) The notice must be in such a form, and contain such details, as the Managing Director determines in writing.

(3) The details referred to in subsection (2) may include, but are not limited to, the following:

(a) the applicant’s full name;

(b) the applicant’s date of birth;

(d) the applicant’s Medicare card number;

(e) whether the policy in respect of which the applicant has applied to be registered covers only one person or covers more than one person;

(f) the full name and date of birth of any person covered by the policy (other than the applicant);

(g) whether any of those persons are dependent children;

(h) the full name and date of birth of any person (other than a person covered by the policy) whose income must be taken into account under section 3-3 or 3-4 in respect of the policy for the financial year in question;

(i) whether the policy provides hospital cover, ancillary cover or combined cover.

(4) For the purposes of subsection (2), the Managing Director must not determine that the participating fund must provide:

(a) the tax file number of any person; or

(b) any information about the applicant’s income, or the income of any other person, other than that the applicant believes the income test is satisfied in respect of the policy for the financial year in question; or

(5) The details determined by the Managing Director for the purposes of subsection (2) must not relate to any person other than:

(a) the applicant; or

(b) persons covered by the policy; or

(c) persons whose income must be taken into account under section 3-3 or 3-4 in respect of the policy for the financial year in question.

(6) Determinations under subsection (2) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

4-5 Refusal to register

(1) If the Commission refuses to register the applicant, it must give written notice of the refusal, together with reasons for the refusal, to:

(a) the applicant; and

(b) the health fund that issued the policy.

(2) The applicant is taken, for the purposes of this Act, to be registered in respect of the policy for the financial year in question if the Commission does not give notice of refusal within 14 days after being notified under section 4-4 of the application in question.

4-6 Revocation of registration

(1) The Commission must revoke a person’s registration in respect of a private health insurance policy for a financial year if:

(a) the person becomes registered in respect of another policy and:

(i) the 2 policies both provide hospital cover; or

(ii) the 2 policies both provide ancillary cover; or

(iii) either or both of the policies provide combined cover; or

(b) the Commission is given a notice under section 4‑8 in respect of the person; or

(2) Revocation of registration under subsection (1) does not affect a person’s right to make another application for registration under section 4-3.

Note: Revocations of registration are reviewable under section 13-1.

4-7 Notification requirements—registered persons

(1) A person who is registered in respect of a private health insurance policy for a financial year (the registered person) must give written notice to the health fund in question if:

(a) the estimated sum of the taxable incomes of persons whose income must be taken into account under section 3-3 or 3-4 in respect of the policy for that year changes; and

(b) the sum changes in such a way that the registered person knows or ought reasonably to expect that the income test in respect of the policy will not be satisfied for that year.

(2) The registered person must also give written notice to the health fund if a detail:

(a) stated in the person’s application under section 4-3; and

(b) relating to the number of people covered by the policy or to whether any of those people are dependent children;

changes in such a way that the person ought reasonably to expect that the annual incentive amount for the policy for the year will change.

(3) The registered person may notify the health fund in writing if he or she no longer wishes to be registered in respect of the policy for that year.

4-8 Notification requirements—health funds

(1) A health fund must notify the Commission, in a form determined by the Managing Director, of each notice given to the health fund under section 4-7.

(2) The health fund must so notify the Commission on or before whichever of the following days is applicable:

(a) if the health fund receives the notice on a day that is on or before the 21st day of a month—the last day of the notification period for the following month; or

(b) if the health fund receives the notice on a day that is on or after the 22nd day of a month—the last day of the notification period for the second month after that day.

Note: For notification period, see the Dictionary.

4-9 Variation of registration

(1) A health fund must notify the Commission if the type of cover provided by a private health insurance policy, issued by the health fund and in respect of which a person is registered, is varied.

Note: For type of cover, see the Dictionary.

(2) On receiving such a notice, the Commission must vary the details of the registration accordingly.

4-10 Retention of applications by health funds

(1) A health fund must retain an application made to it under section 4-3 for the period of 5 years beginning on the day the application was made.

(2) The health fund may retain the application in any form (including an electronic form) approved in writing by the Managing Director.

(3) An application retained in such a form must be received in all courts and tribunals as evidence as if it were the original.

Division 5—What effect does the scheme have on insurance premiums?

5-1 Reduction in premiums

(1) Subject to subsection (1A), the amount of premium that, apart from this section, would be payable under a private health insurance policy in respect of which a person is a participant in the incentives scheme for a financial year (see section 5‑2) is to be reduced by the amount (the reduction amount) worked out under whichever of the following paragraphs is applicable:

(a) if the premium is paid in respect of the whole of the financial year—the annual incentive amount for the policy under section 5-3; or

(b) if the premium is paid in respect of a part of the financial year—the amount worked out using the formula:

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(1A) If the person has received a tax offset under Subdivision 61‑G of the Income Tax Assessment Act 1997 in respect of the amount of premium:

(a) where the amount of the offset is less than the reduction amount—the reduction amount is to be reduced by the amount of the offset; or

(b) otherwise—the amount of the premium is not to be reduced under subsection (1).

(2) Subsection (1) does not apply to:

(a) the payment of a premium that is made after the policy has ceased, during the financial year in question, to be a dependent child policy (see section 5-4); or

(b) the payment of a premium that is made in respect of a period that ends before 1 July 1997; or

(c) if the payment of a premium is made in respect of a period that starts before 1 July 1997 and ends on or after that day but on or before 31 July 1997—the part of the payment that relates to the part of the period before 1 July 1997; or

(d) the payment of a premium that is made in respect of a period that starts on or before 1 July 1997 and ends after 31 July 1997; or

(e) the payment on or before 31 December 1998 of a part of a premium that relates to a period after 30 June 1999; or

(f) the payment of a premium that is made after 31 December 1998.

5-2 Participant in the incentives scheme

(1) A person is a participant in the incentives scheme for a financial year in respect of a private health insurance policy if:

(a) the person is registered under Division 4 in respect of the policy for the year; or

(b) the person has applied to be registered in respect of the policy for the year and the registration has not been refused.

(2) For the purposes of this Act, a person is taken, in respect of a payment of premium during July in a financial year, to be a participant in the incentives scheme if:

(a) the person has not, at the time the payment is made, applied to be registered in respect of the private health insurance policy in question; and

(b) on 30 June in the previous financial year, the person was registered under Division 4 in respect of the policy for that year.

5-3 Annual incentive amounts

(1) The annual incentive amount for a private health insurance policy is:

(a) the amount set out in the following table; or

(b) such other amount as is determined in writing by the Minister.

Annual Incentive Amounts
Item Number and kind of persons covered by the policy Policy provides combined cover Policy provides hospital cover but not ancillary cover Policy provides ancillary cover but not hospital cover
1 Policy covers 3 or more people $450 $350 $100
2 Policy covers one dependent child and one other person $450 $350 $100
3 Policy covers 2 people neither of whom are dependent children $250 $200 $50
4 Policy covers one person $125 $100 $25

Note: For combined cover, hospital cover and ancillary cover, see section 3-2.

(2) Determinations under paragraph (1)(b) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

5-4 Policies that cease to be dependent child policies

For the purposes of paragraph 5-1(2)(a), if:

(a) at the time an application was made under section 4-3 for registration of a private health insurance policy for a financial year, the policy did not cover any person who was not a dependent child; and

(b) on any day during that year, the person, or one or more of the persons, who was at that time covered by the policy ceases to be a dependent child but remains covered by the policy;

the policy ceases to be a dependent child policy on that day.

Note: For dependent child, see the Dictionary.

5-5 Persons who are not eligible persons for part of a financial year

If, on one or more days during a financial year, a person:

(a) is not an eligible person within the meaning of section 3 of the Health Insurance Act 1973; or

(b) is not treated as an eligible person under section 6 of that Act;

for the purposes of section 5-1, any premium payable under a private health insurance policy that has been paid (or would, apart from this section, be taken to have been paid) in respect of the whole or part of the financial year by the person is taken not to have been paid in respect of those days.

5-6 Premiums paid in respect of certain periods around 1 July 1997

(1) If:

(a) a person has applied before 1 July 1997 to a health fund for registration under Division 4 in respect of a private health insurance policy for the financial year commencing on that day; and

(b) the person has paid an amount of premium payable under the policy in respect of a period starting on or before 1 July 1997 and ending on a day (the expiry day) after 31 July 1997;

the health fund must, on or before 31 August 1997, either:

(c) pay to the person an amount equal to the amount that is payable to the health fund under Division 8 in respect of the policy during the current policy period; or

(d) offset that amount against amounts of premium that the person would be liable to pay to the health fund after the expiry day if the policy were to continue in force after that day.

(2) In this section:

current policy period means the period starting on 1 July 1997 and ending on the expiry day.

Part 3—Reimbursement of health funds

Division 6—Introduction

6-1 What this Part is about

This Part is about how health funds become part of the incentives scheme, and how the government reimburses them for the reductions to premiums they make under the scheme.

Table of Divisions

6 Introduction

7 How do health funds become participating funds?

8 How are participating funds reimbursed?

Division 7—How do health funds become participating funds?

7-1 Becoming a participating fund

(1) A health fund may apply under section 7-2 to the Minister to become a participating fund for a financial year.

(2) If the Minister approves the application for the financial year (see section 7-3), the health fund is a participating fund for that financial year.

Note: Rejections of applications are reviewable under section 13-1.

7-2 Requirements for applications

(1) The application must:

(a) be in a form approved by the Minister; and

(b) include such information as is determined in writing by the Minister; and

(d) include an undertaking signed by the public officer of the applicant that the applicant will participate in the scheme until the end of the financial year in question.

(2) The application must be made:

(a) no later than 2 months, or such shorter period as the Minister determines in writing, before the start of the financial year in question; or

(b) if the health fund becomes registered under Part VI of the National Health Act 1953 during a financial year—as soon as practicable after its registration.

(3) In this section:

public officer means the person who is appointed the public officer of a health fund for the purposes of the National Health Act 1953.

7-3 Consideration of applications

(1) The Minister must approve the application unless the health fund is subject to Part VIA of the National Health Act 1953. However, even if the health fund is subject to that Part, the Minister may approve the application if the Minister is satisfied that it is in the public interest to do so.

(2) A health fund is subject to Part VIA of the National Health Act 1953 if:

(a) the Minister has served a notice under subsection 82R(1) of that Act on the health fund and the Minister has not decided whether an inspector should be appointed to investigate the affairs of the health fund; or

(b) the Minister has appointed under subsection 82R(2) of that Act an inspector to investigate the affairs of the health fund and the investigation has been neither completed nor terminated; or

(c) the Minister is considering a report in relation to the health fund prepared under paragraph 82W(1)(b) of that Act and the Minister has not decided, having regard to the report, whether to make an application under section 82Z of that Act; or

(d) the Minister has made such an application, and the application has not been finally determined; or

(e) an application has been made by the health fund under section 82ZG of that Act, and the application has not been finally determined; or

(f) an order for judicial management, made on the Minister’s application under section 82Z of that Act, is in force; or

(g) an order for winding up, made on the Minister’s application under section 82Z of that Act or the application of the health fund under section 82ZG of that Act, has been made.

7-4 Notice of Minister’s decision

(1) The Minister must notify the applicant in writing, within 28 days of the decision, whether the application has been approved or rejected.

(2) The notice must set out the Minister’s reasons for rejecting the application if it has been rejected.

Division 8—How are participating funds reimbursed?

8-1 Health funds may claim reimbursement

(1) A health fund may, in accordance with section 8-2, claim reimbursement from the Commission for each month during a financial year for which it is a participating fund.

(2) The Commission must pay to the health fund, in accordance with section 8-3, the amount payable under that section in respect of the month to which the claim relates.

(3) However, the amount must be increased or decreased to take account of any adjustments to the amount under section 8-4.

8-2 Requirements for claims

(1) A claim by a health fund in respect of a month must be made to the Commission on or before the last day of the notification period for that month.

Note: For notification period, see the Dictionary.

(2) The claim must contain such details as the Managing Director determines in writing.

(3) The details may include, but are not limited to, details about any or all of the following private health insurance policies issued by the health fund:

(a) policies that were, on the first day of the month, policies in respect of which persons were participants in the incentives scheme;

(b) policies that had been, at any time before that day, policies in respect of which persons were participants in the incentives scheme.

(4) The Managing Director must not determine under subsection (2) that the health fund must provide:

(a) the tax file number of any person; or

(b) any information about the income of a person who is a participant in the incentives scheme, or the income of any other person, other than that each participant in the incentives scheme has made a statutory declaration under section 4-3, and has not given a notice under subsection 4‑7(1); or

(5) Determinations under subsection (1) or (2) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

(6) A claim under this section must be in a form approved by the Managing Director.

8-3 Amounts payable to the health fund

(1) Subject to subsection (2), the amount payable to the health fund in respect of the month is 1/12 of the sum of the annual incentive amount (see section 5-3) for each private health insurance policy that:

(a) was issued by the health fund; and

(b) on the first day of that month, covers a person who is, on that day, a participant in the incentives scheme in respect of that policy (see section 5-2).

(2) Subject to subsection (3), the annual incentive amount for a private health insurance policy in respect of which a person is a participant in the incentives scheme is taken, for the purposes of subsection (1), to be the amount that would be the annual incentive amount if:

(a) the number of persons covered by the policy; and

(b) the number of such persons who are dependent children;

were as stated in the most recent application under section 4‑3 made by the person in respect of the policy.

(3) Subsection (2) only applies if the amount worked out under that subsection is less than the annual incentive amount under section 5-3.

(4) The amount must be paid to the health fund on or before the 15th day of the month (or, if that day is not a business day, the first business day after that day).

(5) The amount must be paid in the way determined, in writing, by the Managing Director.

8-4 Adjustments to amounts

(1) The Commission must, in respect of each amount that would otherwise be payable to a health fund under section 8-3, make such adjustments to take account of:

(a) policies that the health fund issued to participants in the incentives scheme other than on the first day of a month; and

(b) policies that the health fund issued to participants in the incentives scheme that were terminated other than on the first day of a month; and

(i) there was no reduction in premium for the relevant month; or

(ii) the reduction in premium for the relevant month was reduced under subsection 5‑1(1A).

as are required by this section.

(2) Adjustments must be worked out in respect of the periods determined by the Managing Director.

(3) Adjustments must be worked out in accordance with guidelines made, in writing, by the Minister relating to:

(a) the circumstances in which adjustments will be made; and

(b) how the amounts of adjustments will be worked out.

Note: Decisions relating to whether to make adjustments, and the amounts of adjustments that are made, are reviewable under section 13-1.

(4) Guidelines made under subsection (3) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

8-5 Notifying health funds if amount is not payable

(1) The Commission must notify a health fund if it decides that an amount is not payable in respect of a private health insurance policy included in a claim under section 8-2.

(2) A notice under subsection (1) must include reasons for the decision.

(3) The Commission is taken, for the purposes of this Act, to have decided that the amount is payable if the Commission does not give notice of its decision that the amount is not payable on or before the day under subsection 8-3(4) on which, if it had been payable, it would have to have been paid.

8-6 Reconsideration of decisions

(1) A health fund that has been given a notice under subsection 8-5(1) may request the Commission to reconsider the decision.

(2) The request must:

(a) be in writing; and

(b) set out the reasons for the request; and

(c) be made on or before the first day of the month following the month during which the Commission gave the notice (or, if that day is not a business day, the first business day after that day).

(3) As soon as practicable after receiving the request, the Commission must:

(a) reconsider the decision; and

(b) affirm, vary or revoke the decision.

Note: Decisions on reconsideration are reviewable under section 13-1.

(4) If the Commission revokes the decision, revocation is taken to be a decision that the amount in question is payable.

(5) If the Commission varies the decision, the decision has effect, and is taken always to have had effect, accordingly.

(6) The Commission must notify the health fund stating its decision on the reconsideration together with a statement of its reasons for its decision.

(7) The Commission is taken, for the purposes of this Act, to have revoked the decision if the Commission does not notify the health fund of its decision on the reconsideration within 28 days after receiving the request.

8-7 Appropriation

The Consolidated Revenue Fund is appropriated for the purposes of making payments under this Division.

Part 4—Administering the incentives scheme

Division 9—Introduction

9-1 What this Part is about

This Part is about the administration of the incentives scheme. In particular, it deals with how the government checks the way in which the scheme is operating, and when and how it recovers payments.

Table of Divisions

9 Introduction

10 How is the scheme administered?

11 When and how does the government recover payments?

12 How is information protected?

Division 10—How is the scheme administered?

10-1 General administration of this Act

The Commission has the general administration of this Act.

10-2 Audits by Commission

(1) The Commission may, at any time, audit the accounts and records of a health fund that is, or has been, a participating fund.

(2) An audit under subsection (1) must relate only to the accounts and records of the health fund to the extent that they deal with:

(a) participation by persons in the incentives scheme; or

(b) reductions of premium payable under private health insurance policies under the incentives scheme; or

(3) The Commission must give notice in writing to the health fund concerned that an audit is to be carried out.

(4) The health fund must ensure that the Commission has full and free access to all accounts, records, documents and papers of the health fund that are relevant to the audit.

(5) The person carrying out the audit may take copies of, or extracts from, such accounts, records, documents and papers for use in the audit.

(6) In considering whether or not to conduct an audit under this section, the Commission may take into account a report under section 82PA of the National Health Act 1953.

10-3 Commission may require production of applications

(1) The Commission may, by written notice given to a health fund, require the health fund:

(a) to produce to the Commission, within the period and in the manner specified in the notice, applications retained under section 4-10; or

(b) to make copies of any such applications and to give them to the Commission within the period and in the manner specified in the notice.

(2) A period specified under subsection (1) must not be less than one month.

(3) A health fund is entitled to be paid by the Commission reasonable compensation for complying with paragraph (1)(b).

10-4 Information to be provided to the Commissioner of Taxation

The Commission must, within 60 days of the end of each financial year, give the following information to the Commissioner of Taxation:

(a) the name, date of birth and address of each person who was a participant in the incentives scheme for that financial year;

(b) the name of the health fund that issued the health insurance policy in respect of which the person was a participant in the incentives scheme;

(d) the total amount of payments to a health fund in respect of the policy;

(e) the number of months in respect of which those payments were made;

(f) the name and date of birth of any other person covered by the policy in respect of which those payments were made;

(g) whether any person covered by the policy was a dependent child at any time during that financial year;

(h) the name and date of birth of any person whose income was taken into account in determining whether the income test was satisfied in respect of that policy for that financial year.

Division 11—When and how does the government recover payments?

11-1 Recovery of payments

(1) The following amounts are recoverable as debts due to the Commonwealth:

(a) so much of a payment made under section 8-1 as relates to a private health insurance policy that covers a person who was, for the financial year in question:

(i) a participant in the incentives scheme (see section 5-2); and

(ii) not eligible to participate in the incentives scheme (see Division 3);

(b) 150% of so much of a payment made under section 8-1 as:

(i) is not reflected in reductions in premiums payable under private health insurance policies issued by the health fund in question; or

(ii) relates to a financial year and to a person whose application under section 4-3 in respect of that financial year has not been retained by the health fund as required by section 4-10; or

(iii) relates to a financial year and to a person whose application under section 4-3 has been so retained, but has not been produced to the Commission by the health fund in accordance with a requirement by the Commission under section 10-3; or

(2) The amounts are recoverable from:

(a) if paragraph (1)(a) applies—the person referred to in that paragraph, or the estate of that person; or

(b) if paragraph (1)(b) or (c) applies—the health fund to which the payment in question was made.

(3) An amount recoverable under subsection (1) is recoverable whether or not any person has been convicted of an offence relating to the payment.

11-2 Interest on amounts recoverable

(1) If the Managing Director has served a notice on a person from whom an amount is recoverable under subsection 11-1(1), or on the person’s estate, claiming an amount as a debt due to the Commonwealth, and:

(a) within the period referred to in subsection (4), an arrangement has been entered into between the Managing Director and the person or estate for the repayment, and there has been a default in payment of an amount required to pay under the arrangements; or

(b) at the end of that period, such an arrangement has not been entered into and all or part of the amount remains unpaid;

then, from the day after the end of the period, interest becomes payable on so much of the amount as from time to time remains unpaid.

(2) Interest is payable:

(a) at the rate specified in the regulations; or

(b) if the regulations do not specify a rate—at the rate of 15% per annum.

(3) The interest so payable is recoverable as a debt due to the Commonwealth from the person or the person’s estate.

(4) The period for entering into an arrangement under paragraph (1)(a) is a period of 3 months following the service of the notice under subsection (1), or such longer period as the Managing Director allows.

(5) Despite subsections (1) and (3), in any proceedings instituted by the Commonwealth for the recovery of an amount due under subsection (3), the court may order that the interest payable under that subsection is, and is taken to have been, so payable from a day later than the day referred to in subsection (1).

11-3 Write off and waiver

(1) The Managing Director may, on behalf of the Commonwealth, by instrument in writing:

(a) write off an amount that a person has been required to pay to the Commonwealth under section 11-1; or

(b) waive the right of the Commonwealth to recover from a person the whole or part of an amount that the person has been required to pay to the Commonwealth under that section; or

(c) allow a person who has been required to pay an amount to the Commonwealth under that section to pay that amount by such instalments as are specified in the instrument.

(2) A decision under subsection (1) takes effect:

(a) on the day specified in the notice, being the day on which the decision is made or any day before or after that day; or

(b) if no day is so specified—on the day on which the decision is made.

Note: Decisions not to exercise the powers under this section are reviewable under section 13-1.

Division 12—How is information protected?

12-1 Principles relating to personal information

(1) The Minister may, in writing, make principles relating to:

(a) the acquiring of personal information under or for the purposes of this Act; and

(b) the storage of, security of, access to, correction of, use of and disclosure of such personal information.

(2) A health fund must comply with the principles.

(3) The principles are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

(4) In this section:

personal information has the same meaning as in the Privacy Act 1988.

12-2 Use etc. of information relating to another person

(1) A person who uses, makes a record of, or discloses or communicates to any person, any information that relates to the affairs of another person and that was acquired under or for the purposes of this Act is guilty of an offence.

Penalty: 5 penalty units.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

(2) This section does not apply to conduct carried out in the performance of a function or obligation under this Act or the exercise of a power under this Act.

Note: A defendant bears an evidential burden in relation to the matters in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Part 5—Miscellaneous

Division 13—Miscellaneous

13-1 Review by Administrative Appeals Tribunal

Application may be made to the Administrative Appeals Tribunal for review of the following decisions:

(a) a decision by the Commission refusing to register a person under subsection 4-1(3) in respect of a private health insurance policy;

(b) a decision by the Commission under subsection 4-6(1) to revoke a person’s registration in respect of a private health insurance policy;

(c) a decision by the Minister to reject an application under subsection 7-1(1) by a health fund to become a participating fund;

(d) a decision by the Commission relating to whether to make an adjustment under section 8-4, or relating to the amount of an adjustment made under that section;

(e) a decision by the Commission under subsection 8-6(3) on reconsideration of a decision that an amount is not payable in respect of a private health insurance policy included in a claim under section 8-2;

(f) a decision by the Managing Director not to exercise his or her powers under section 11-3 in relation to an amount.

Note: Under section 27A of the Administrative Appeals Tribunal Act 1975, the decision-maker must notify persons whose interests are affected by the making of the decision and of their right to have the decision reviewed. In notifying such persons, the decision-maker must have regard to the Code of Practice determined under section 27B of that Act.

13-2 Exclusion of certain State insurance

This Act does not apply with respect to State insurance that does not extend beyond the limits of the State concerned.

13-3 False or misleading information in applications

A person is guilty of an offence if:

(a) the person makes an application under section 4-3; and

(b) the application contains information that is false or misleading in a material particular.

Penalty: 30 penalty units.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

13-4 Application of the Criminal Code

Chapter 2 of the Criminal Code applies to all offences against this Act.

13-5 Regulations

The Governor-General may make regulations, not inconsistent with this Act, prescribing matters:

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.

Schedule 1—Dictionary

1 Definitions

In this Act, unless the contrary intention appears:

ancillary cover, in relation to a private health insurance policy, has the meaning given in subsection 3-2(3).

business day means a day other than a Saturday, a Sunday or a public holiday in the place concerned.

combined cover, in relation to a private health insurance policy, has the meaning given in subsection 3-2(6).

Commission means the Health Insurance Commission.

dependent child, in relation to a private health insurance policy, means a person:

(a) who is covered by the policy; and

(b) whom the health fund that issued the policy accepts as a dependent child for the purposes of the policy;

but does not include:

(d) a person (other than a full-time student) who is 18 years of age or older; or

(e) a full-time student who is 25 years of age or older.

financial year means the financial year that began on 1 July 1997 or the financial year that began on 1 July 1998.

health fund means a registered organization within the meaning of Part VI of the National Health Act 1953.

hospital cover, in relation to a private health insurance policy, has the meaning given in subsection 3-2(2).

incentives scheme means the scheme provided for under this Act for the reduction of premiums paid in respect of certain private health insurance policies.

Managing Director means the Managing Director of the Health Insurance Commission within the meaning of the Health Insurance Act 1973.

notification period, in relation to a month, means the period starting on the first day of the month and finishing on the seventh day of the month.

parent, in relation to a dependent child, means:

(a) unless the dependent child is a full-time student who is 18 years of age or older—a person who has the right (whether alone or jointly with another person):

(i) to have the daily care and control of the child; and

(ii) to make decisions about the daily care and control of the child; or

(b) if the dependent child is a full-time student who is 18 years of age or older—a person who is primarily responsible (whether alone or jointly with another person) for the maintenance and support of the student.

participant in the incentives scheme has the meaning given by section 5-2.

participating fund, in relation to a financial year, means a health fund referred to in subsection 7-1(2) in respect of that year.

partner, in relation to another person, means:

(a) a person who is legally married to the other person and is not living separately and apart from the other person on a permanent basis; or

(b) a person who, although not legally married to the other person, lives with the other person on a bona fide domestic basis as the husband or wife of the other person.

private health insurance policy means a contract of insurance that was entered into by a health fund in the course of carrying on a health insurance business within the meaning of section 67 of the National Health Act 1953.

tax file number means a tax file number as defined in section 202A of the Income Tax Assessment Act 1936.

type of cover, in relation to a private health insurance policy, means:

(a) combined cover; or

(b) hospital cover; or

NOTES

1. The Private Health Insurance Incentives Act 1997 as shown in this reprint comprises Act No. 55 of 1997 amended as indicated in the Tables below.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Private Health Insurance Incentives Act 1997	55, 1997	30 Apr 1997	30 Apr 1997
Private Health Insurance Incentives Amendment Act 1998	127, 1998	21 Dec 1998	Schedule 2: 1 July 2000 Remainder: Royal Assent	—

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected How affected
S. 4-3................... am. No. 127, 1998
S. 5-1................... am. No. 127, 1998
S. 8-4................... am. No. 127, 1998
Schedule 1............... am. No. 127, 1998

Deep dive

Current sections