ATO Interpretative Decision
ATO ID 2001/624
Income Tax
Private Health Insurance Tax Offset - overseas health fundFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the taxpayer entitled to a Private Health Insurance tax offset under section 61-335 of the Income Tax Assessment Act 1997 (ITAA 1997) for premiums paid to a health fund not registered in Australia?
Decision
No, the taxpayer is not entitled to a Private Health Insurance tax offset under section 61-335 of the ITAA 1997 for premiums paid to a health fund not registered in Australia.
Facts
The taxpayer has private health insurance with an overseas health fund that reimburses the taxpayer for medical expenses in Australia.
The fund has direct agreements with several Australian hospitals and provides coverage equivalent to combined hospital and ancillary cover. The fund is not a registered health fund in Australia. The taxpayer is required to pay monthly premiums and is not entitled to claim any Medicare benefits.
Reasons for Decision
Under section 61-335 of the ITAA 1997 a tax offset will be allowed for private health insurance premiums provided two conditions are met:
- (1)
- the premium must be paid by the taxpayer or their employer in respect of an 'appropriate private health insurance policy' as defined in the Private Health Insurance Incentives Act 1998 (PHIIA 1998)
- (2)
- the premium must be paid in the same income year that it is claimed as a tax offset.
An 'appropriate private health insurance policy' under section 20-5 of the PHIIA 1998, is a 'private health insurance policy' that provides hospital, ancillary or combined cover where every person covered by the policy is eligible to claim benefits under the Medicare system.
A 'private health insurance policy' is a contract of insurance entered into by a registered organisation in the course of carrying on a health insurance business as defined by the National Health Act 1953 (the Health Act).
In accordance with section 73 of Part VI of the Health Act, the Private Health Insurance Administrative Council (PHIAC) keeps a list of health funds classed as registered organisations. No overseas funds are listed by PHIAC as registered organisations.
As the overseas fund is not a registered organisation and the taxpayer is not eligible to claim benefits under the Medicare system, any premiums paid to an overseas fund are not premiums paid in respect of an 'appropriate private health insurance policy'. Therefore the taxpayer has no entitlement to a Private Health Insurance tax offset under section 61-335 of the ITAA 1997.
Date of decision: 25 September 2001
Legislative References:
Income Tax Assessment Act 1997
section 61-335
section 20-5 National Health Act 1953
Part VI
section 73
Keywords
30% Private Health Insurance Rebate
Rebates
Private health insurance offsets
Private health insurance incentives
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 25 September 2001 | Original statement |
| 1 April 2010 | Archived |