ATO Interpretative Decision
ATO ID 2002/348 (Withdrawn)
Income Tax
Private Health Insurance Tax Offset - reduction in premiums receivedFOI status: may be released
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This ATO ID is a straight application of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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), when the taxpayer has claimed a 30% reduction in their private health insurance premium through their health fund?
Decision
No. The taxpayer is not entitled to a private health insurance tax offset under section 61-335 of the ITAA 1997. Subsection 61-335(5) provides that a the taxpayer is not entitled to a private health insurance tax offset through their tax return when the taxpayer receives a reduction in premiums because of the operation of Chapter 2 or Chapter 3 of the Private Health Insurance Incentives Act 1998 (PHIIA 1998).
Facts
The taxpayer has an appropriate private health insurance policy.
The taxpayer received the full 30% private health insurance tax offset as a reduction in the premiums paid in respect of their private health insurance policy.
Reasons for Decision
Section 61-335 of the ITAA 1997 provides a tax offset in respect of private health insurance premiums where:
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- The premium was paid by the taxpayer or their employer in respect of an 'appropriate private health insurance policy' as defined in the PHIIA 1998;
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- The premium was paid in the same income year that it is claimed as a tax offset, and
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- The taxpayer has not received a reduction in their private health insurance premiums in respect of the tax offset.
Subsection 61-335(5) of the ITAA 1997 disallows a private health insurance tax offset where a taxpayer has:
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- Received a cash or cheque payment from a Medicare office under Chapter 2 of the PHIIA 1998, the Incentives Payments Scheme, in relation to the payment; or
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- The premium, or the amount in respect of a premium, was less that it would otherwise have been because of the operation of Chapter 3 of the PHIIA 1998, the Reduced Premium Scheme.
The taxpayer has received the full 30% private health insurance tax offset as a reduction in the premiums paid in respect of their private health insurance policy. Subsection 61-335(5) of the ITAA 1997 will operate to prevent the taxpayer claiming a tax offset in their income tax return as the taxpayer has already received their full entitlement. Accordingly, the taxpayer is not entitled to a private health insurance tax offset under section 61-335 of the ITAA 1997.
Legislative References:
Income Tax Assessment Act 1997
section 61-335
subsection 61-335(5)
Chapter 2
Chapter 3
Keywords
30% Private Health Insurance Rebate
ISSN: 1445-2782
| Date: | Version: | |
| 25 February 2002 | Original statement | |
| You are here | 18 November 2005 | Archived |