Commonwealth Consolidated Acts

TAX LAWS AMENDMENT (2012 MEASURES NO. 6) ACT 2013 - SCHEDULE 5

Income Tax Assessment Act 1936

1   Subsection   6(1)

Insert:

"adjusted taxable income for rebates" means adjusted taxable income (within the meaning of the A New Tax System (Family Assistance) Act 1999 , disregarding clauses   3 and 3A of Schedule   3 to that Act).

2   Subsection   6(1)

Insert:

"family tier 1 threshold" has the meaning given by the A New Tax System (Medicare Levy Surcharge--Fringe Benefits) Act 1999 .

3   Subsection   6(1)

Insert:

"medical expense rebate higher phase-in limit" has the meaning given by subsection   159Q( 5 ).

4   Subsection   6(1)

Insert:

"medical expense rebate lower phase-in limit" has the meaning given by subsection   159Q( 6 ).

5   Subsection   6(1)

Insert:

"rebatable medical expense amount" has the meaning given by subsections   159P(1) and (3).

6   Subsection   6(1)

Insert:

"singles tier 1 threshold" has the meaning given by the A New Tax System (Medicare Levy Surcharge--Fringe Benefits) Act 1999 .

7   Section   159HA (heading)

Omit " sections   159J, 159L and 159P ", substitute " this Subdivision ".

8   Subsection   159HA(1)

Omit "159P", substitute "159Q".

9   Subsection   159HA(7) (definition of indexable amount )

Repeal the definition, substitute:

"indexable amount" means:

  (a)   an amount mentioned in column 1 of an item of the following table; or

  (b)   if that amount has been altered under this section in relation to the year of income mentioned in column 2 of the item, or a later year of income--the altered amount:

10   Paragraphs 159J(1AB)(a) and (1AC)(a) and (b)

Omit "adjusted taxable income", substitute "adjusted taxable income for rebates".

11   Paragraph 159J(1AC)(c) (formula)

Repeal the formula, substitute:

12   Subsection   159J(1AC) (note)

Omit "adjusted taxable income", substitute "adjusted taxable income for rebates".

13   Subsections   159J(4) and (5)

Omit "adjusted taxable income", substitute "adjusted taxable income for rebates".

14   Subsection   159J(6) (definition of adjusted taxable income )

Repeal the definition.

15   Before subsection   159P(1)

Insert:

Definition of rebatable medical expense amount

16   Subsections   159P(1) and (3)

Omit "shall, for the purposes of this section, be treated as a rebatable amount", substitute "is a rebatable medical expense amount ".

17   Subsection   159P(3A)

Repeal the subsection, substitute:

Rebate

  (3A)   A taxpayer is entitled to a rebate of tax in the taxpayer's assessment in respect of income of a year of income if one or more rebatable medical expense amounts are applicable to the taxpayer in respect of the year.

  (3AA)   The amount of the rebate is:

  (a)   if the medical expense rebate higher phase - in limit applies--10% of the amount by which the total of the rebatable medical expense amounts exceeds the medical expense rebate higher phase - in limit; or

  (b)   otherwise--20% of the amount by which the total of the rebatable medical expense amounts exceeds the medical expense rebate lower phase - in limit.

Note:   For the phase - in limits, see section   159Q.

18   Subsection   159P(3B)

Omit "treated, for the purposes of this section, as a rebatable amount", substitute "a rebatable medical expense amount".

19   Before subsection   159P(4)

Insert:

Other definitions

20   At the end of Subdivision A of Division   17 of Part   III

Add:

159Q   Rebate for medical expenses--phase - in limits

When medical expense rebate higher phase - in limit applies

  (1)   The medical expense rebate higher phase - in limit applies if:

  (a)   an item of the following table applies to the following individual (the principal individual ) for the year of income:

  (i)   other than in a case to which subparagraph   ( ii) applies--the taxpayer;

  (ii)   in the case of an assessment mentioned in paragraph   159P(3)(a)--the beneficiary; and

  (b)   the amount mentioned in column 2 of the item exceeds the threshold mentioned in column 3 of the item.

  (2)   The reference in item   1 of the table in subsection   ( 1) to the last day of the year is treated as being a reference to the day the principal individual dies, if the principal individual dies during the year.

  (3)   Despite section   5 of the A New Tax System (Medicare Levy Surcharge--Fringe Benefits) Act 1999 , for the purposes of item   2 of the table in subsection   ( 1) of this section, an individual is treated as not being a dependant of the principal individual on a day if the individual is married (within the meaning of that Act) to the principal individual on that day.

  ( 4 )   In the case of an assessment mentioned in paragraph   159P(3)(a), treat a reference in the table in subsection   ( 1) to the principal individual's adjusted taxable income for rebates for the year as being a reference to the amount in respect of which the trustee is liable to be assessed, as mentioned in that paragraph.

Phase - in limits

  ( 5 )   The medical expense rebate higher phase - in limit is $5,000.

Note:   This amount is indexed annually: see section   159HA.

  ( 6 )   The medical expense rebate lower phase - in limit is $2,000.

Note:   This amount is indexed annually: see section   159HA.

21   Application of amendments

The amendments made by this Schedule apply to assessments for the 2012 - 13 year of income and later years of income.