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Edited version of your written advice
Authorisation Number: 1012995886956
Date of advice: 8 April 2016
Ruling
Subject: Private Health Insurance Offset
Questions and answers:
Do you have to repay the private health insurance offset that you received in the year end 30 June 20XX because you were ineligible to receive it?
Yes.
Can you repay only the amount of the private health insurance offset that is in relation to your private health insurance coverage for the year end 30 June 20XX tax period since you prepaid for the next tax period and are now eligible to receive the offset?
No.
This ruling applies for the following period
Year ending 30 June 2015
This scheme commences on:
1 July 2014
Relevant facts and circumstances
You and your partner made an advanced payment on your private health insurance for the year end 30 June 20YY.
You received a redundancy payment during the year end 30 June 20XX which made you ineligible to receive the private health insurance tax offset.
You wish to pay back the relevant rebate amount pertaining to the year end 30 June 20XX as you are now able to claim the private health insurance tax offset for the year end 30 June 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 61-G
Private Health Insurance Act 2007
Reasons for decision
As you have incurred the cost of your private health insurance for the year end 30 June 20YY in the year end 30 June 20XX you will have to repay the full amount of the tax offset that you received during that year.
The private health insurance offset works by allowing you to claim amounts paid for private health insurance in the year that you incur the cost as is outlined in ATO ID 2004/713 - Private Health Insurance tax offset: premium for cover in another income year.
You cannot apportion the cost that you have incurred in relation to another tax period based on the period that the private health insurance will cover. In your circumstances you incurred private health insurance costs for both years in the year end 30 June 20XX and so the offset is only applicable in that year.