Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MEDICARE LEVY AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
FRINGE BENEFITS TAX AMENDMENT (DISABILITYCARE AUSTRALIA)
BILL 2013
INCOME TAX RATES AMENDMENT (DISABILITYCARE AUSTRALIA)
BILL 2013
SUPERANNUATION (EXCESS CONCESSIONAL CONTRIBUTIONS TAX)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
SUPERANNUATION (EXCESS NON-CONCESSIONAL CONTRIBUTIONS TAX)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
SUPERANNUATION (EXCESS UNTAXED ROLL-OVER AMOUNTS TAX)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
INCOME TAX (TFN WITHHOLDING TAX (ESS)) AMENDMENT
(DISABILITYCARE AUSTRALIA) BILL 2013
INCOME TAX (FIRST HOME SAVER ACCOUNTS MISUSE TAX)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
FAMILY TRUST DISTRIBUTION TAX (PRIMARY LIABILITY) AMENDMENT
(DISABILITYCARE AUSTRALIA) BILL 2013
TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 1)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 2)
AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Chapter 1 Change to the Medicare levy rate .................................. 5
Chapter 2 Statement of Compatibility with Human Rights ............ 17
Index ..................................................................................................... 19
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
FHSA First Home Saver Account
ITAA 1936 Income Tax Assessment Act 1936
ITAA 1997 Income Tax Assessment Act 1997
TFN tax file number
1
General outline and financial impact
Change to the Medicare levy rate
Schedule 1 to the Medicare Levy Amendment (DisabilityCare Australia)
Bill 2013 amends the Medicare Levy Act 1986 to increase the Medicare
levy rate from 1.5 to 2 per cent of taxable income for the 2014-15 income
year and later income years.
Schedule 1 to each of the Fringe Benefits Tax Amendment
(DisabilityCare Australia) Bill 2013, the Income Tax Rates Amendment
(DisabilityCare Australia) Bill 2013, the Superannuation (Excess
Concessional Contributions Tax) Amendment (DisabilityCare Australia)
Bill 2013, the Superannuation (Excess Non-concessional Contributions
Tax) Amendment (DisabilityCare Australia) Bill 2013, the
Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(DisabilityCare Australia) Bill 2013, the Income Tax (TFN Withholding
Tax (ESS)) Amendment (DisabilityCare Australia) Bill 2013, the Income
Tax (First Home Saver Accounts Misuse Tax) Amendment
(DisabilityCare Australia) Bill 2013, the Family Trust Distribution Tax
(Primary Liability) Amendment (DisabilityCare Australia) Bill 2013, the
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment
(DisabilityCare Australia) Bill 2013 and the Taxation (Trustee Beneficiary
Non-disclosure Tax) (No. 2) Amendment (DisabilityCare Australia)
Bill 2013 incorporate this rate change into other Acts.
Date of effect: This measure applies to the 2014-15 income year and later
income years. The amendments to the Fringe Benefits Tax Act 1986
apply to the fringe benefits tax year beginning on 1 April 2014 and later
fringe benefits tax years.
Proposal announced: This measure was announced in the Prime
Minister's, Deputy Prime Minister and Treasurer's and the Minister for
Disability Reform's joint Media Release No. 057 of 1 May 2013.
Financial impact: This measure has the following revenue implications:
2013-14 2014-15 2015-16 2016-17
Nil $3,300m $3,850m $4,200m
3
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
Human rights implications: These Bills do not raise any human rights
issues. See Statement of Compatibility with Human Rights -- Chapter 2,
paragraphs 2.1 to 2.6.
Compliance cost impact: Low.
4
Chapter 1
Change to the Medicare levy rate
Outline of chapter
1.1 Schedule 1 to the Medicare Levy Amendment (DisabilityCare
Australia) Bill 2013 amends the Medicare Levy Act 1986 to increase the
Medicare levy rate from 1.5 to 2 per cent of taxable income for the
2014-15 income year and later income years.
1.2 Schedule 1 to each of the following Bills incorporates this rate
change into other Acts:
· Fringe Benefits Tax Amendment (DisabilityCare Australia)
Bill 2013;
· Income Tax Rates Amendment (DisabilityCare Australia)
Bill 2013;
· Superannuation (Excess Concessional Contributions Tax)
Amendment (DisabilityCare Australia) Bill 2013;
· Superannuation (Excess Non-concessional Contributions
Tax) Amendment (DisabilityCare Australia) Bill 2013;
· Superannuation (Excess Untaxed Roll-over Amounts Tax)
Amendment (DisabilityCare Australia) Bill 2013;
· Income Tax (TFN Withholding Tax (ESS)) Amendment
(DisabilityCare Australia) Bill 2013;
· Income Tax (First Home Saver Accounts Misuse Tax)
Amendment (DisabilityCare Australia) Bill 2013;
· Family Trust Distribution Tax (Primary Liability)
Amendment (DisabilityCare Australia) Bill 2013;
· Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1)
Amendment (DisabilityCare Australia) Bill 2013; and
· Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2)
Amendment (DisabilityCare Australia) Bill 2013.
5
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
Context of amendments
1.3 The National Disability Insurance Scheme Act 2013 established
the National Disability Insurance Scheme, known as DisabilityCare
Australia. The establishment of DisabilityCare Australia is Australia's
most fundamental social reform since the creation of Medicare.
1.4 DisabilityCare Australia will ensure that Australians with
significant and permanent disabilities get the support they need, and will
allow them to live with choice and dignity.
1.5 To provide a strong and stable revenue stream for DisabilityCare
Australia, the Government is increasing the Medicare levy by half a
percentage point. This will provide certainty to people with a disability,
their families and carers, that DisabilityCare Australia will be funded in
the long term.
1.6 All revenue raised from increasing the Medicare levy will be
placed in a special fund, the DisabilityCare Australia Fund, which is being
established by the DisabilityCare Australia Fund Bill 2013. The Fund will
operate for a fixed period of ten years from 2014 to 2024, and will be
managed by the Future Fund Board of Guardians. The Fund will hold and
invest the additional revenue from increasing the Medicare levy for the
purpose of reimbursing the Commonwealth and States for expenditure on
DisabilityCare Australia.
1.7 The Medicare levy was introduced in 1984 at a rate of 1 per cent
of taxable income to offset the cost of establishing Medicare Australia. It
was last permanently increased over 18 years ago.
1.8 The Medicare levy currently applies at a rate of 1.5 per cent of a
person's taxable income. Low income earners receive relief from the
Medicare levy through the low income thresholds for singles, families,
seniors and pensioners. A number of people are also exempt from the
Medicare levy, including blind pensioners and sickness allowance
recipients.
1.9 From 1 July 2014, the Medicare levy will increase by half a
percentage point from 1.5 per cent to 2 per cent of a person's taxable
income. Low income earners will continue to receive relief through the
low income thresholds and the current exemptions from the Medicare levy
will remain in place.
1.10 Increasing the Medicare levy also requires a number of
consequential amendments to other tax rates that are linked to the top
marginal rate and the Medicare levy. Consequential amendments include
changes to fringe benefits tax, excess contributions tax and the tax
6
Change to the Medicare levy rate
withheld on bank accounts when the account holder has not provided their
tax file number.
1.11 Increasing the Medicare levy will raise an estimated $3.3 billion
in 2014-15 and $20.4 billion between 2014-15 and 2018-19.
Summary of new law
1.12 Schedule 1 to the Medicare Levy Amendment (DisabilityCare
Australia) Bill 2013 amends the Medicare Levy Act 1986 to increase the
Medicare levy rate from 1.5 to 2 per cent for the 2014-15 income year and
later income years. Schedule 1 to each of the following Bills amends each
Act to incorporate this rate change, as listed in table 1.1.
Table 1.1: Consequential amendments
Bill Act being amended Provisions
Fringe Benefits Tax Fringe Benefits Tax Section 6
Amendment Act 1986
(DisabilityCare
Australia) Bill 2013
Income Tax Rates Income Tax Rates Act Paragraph 29(2)(a)
Amendment 1986
(DisabilityCare
Australia) Bill 2013
Superannuation Superannuation Section 5
(Excess Concessional (Excess Concessional
Contributions Tax) Contributions Tax)
Amendment Act 2007
(DisabilityCare
Australia) Bill 2013
Superannuation Superannuation Section 5
(Excess (Excess
Non-concessional Non-concessional
Contributions Tax) Contributions Tax)
Amendment Act 2007
(DisabilityCare
Australia) Bill 2013
7
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
Bill Act being amended Provisions
Superannuation Superannuation Paragraph 5(2)(b)
(Excess Untaxed (Excess Untaxed
Roll-over Amounts Roll-over Amounts
Tax) Amendment Tax) Act 2007
(DisabilityCare
Australia) Bill 2013
Income Tax (TFN Income Tax (TFN Section 4
Withholding Tax Withholding Tax
(ESS)) Amendment (ESS)) Act 2009
(DisabilityCare
Australia) Bill 2013
Income Tax (First Income Tax (First Section 3
Home Saver Accounts Home Saver Accounts
Misuse Tax) Misuse Tax) Act 2008
Amendment
(DisabilityCare
Australia) Bill 2013
Family Trust Family Trust Section 4
Distribution Tax Distribution Tax
(Primary Liability) (Primary Liability)
Amendment Act 1998
(DisabilityCare
Australia) Bill 2013
Taxation (Trustee Taxation (Trustee Section 4
Beneficiary Beneficiary
Non-disclosure Tax) Non-disclosure Tax)
(No. 1) Amendment Act (No. 1) 2007
(DisabilityCare
Australia) Bill 2013
Taxation (Trustee Taxation (Trustee Section 4
Beneficiary Beneficiary
Non-disclosure Tax) Non-disclosure Tax)
(No. 2) Amendment Act (No. 2) 2007
(DisabilityCare
Australia) Bill 2013
8
Change to the Medicare levy rate
Comparison of key features of new law and current law
New law Current law
The Medicare levy rate is 2 per cent The Medicare levy rate is
for the 2014-15 income year and later 1.5 per cent.
income years.
The Medicare levy rate incorporated The Medicare levy rate incorporated
into other Acts is 2 per cent. into other Acts is 1.5 per cent.
Detailed explanation of new law
Change to the Medicare levy rate
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013
1.13 The Medicare levy is imposed by section 5 of the Medicare Levy
Act 1986.
1.14 Section 6 of the Medicare Levy Act 1986 specifies the rate of the
Medicare levy. The rate of the Medicare levy payable by a person, a
person who is liable to be assessed on a share of the net income of a trust
estate as a trustee under section 98 of the Income Tax Assessment
Act 1936 (ITAA 1936), and a person who is liable to be assessed on the
share of the net income of a trust estate as a beneficiary under section 99
or 99A of the ITAA 1936, will increase from 1.5 per cent to 2 per cent.
[Schedule 1 to the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013,
items 1 to 3, subsections 6(1) to 6(3) of the Medicare Levy Act 1986]
1.15 Section 7 of the Medicare Levy Act 1986 provides that the
Medicare levy phases-in at a rate of 10 cents in the dollar for particular
taxpayers with income between certain amounts.
1.16 The upper phase-in amount for the net income or part of the net
income of a trust estate, where a person in the capacity of trustee of a trust
is liable to assessment under section 99 of the ITAA 1936, will increase
from $490 to $520 to reflect the new Medicare levy rate. [Schedule 1 to the
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013, item 4, subsection 7(4)
of the Medicare Levy Act 1986]
1.17 Section 8 of the Medicare Levy Act 1986 specifies the formula
for calculating the amount of a person's Medicare levy liability where that
person has a spouse or dependants. The Medicare levy rate components
of the formula specified in subsection 8(2) will be amended to reflect the
increased rate. [Schedule 1 to the Medicare Levy Amendment (DisabilityCare
Australia) Bill 2013, items 5 and 6, subsection 8(2) of the Medicare Levy Act 1986]
9
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
Application and transitional provisions
1.18 The amendments apply to assessments for the 2014-15 income
year and later income years. [Schedule 1 to the Medicare Levy Amendment
(DisabilityCare Australia) Bill 2013, item 7]
Consequential amendments
Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013
1.19 Section 5 of the Fringe Benefits Tax Act 1986 imposes tax on
the fringe benefits taxable amount of an employer for each year of tax,
and sets the rate of that tax.
1.20 The Fringe Benefits Tax Amendment (DisabilityCare Australia)
Bill 2013 will increase the rate of tax in respect of the fringe benefits
taxable amount of an employer for a year of tax from 46.5 to 47 per cent
(which is the sum of the maximum income tax rate under Part I of
Schedule 7 to the Income Tax Rates Act 1986 (currently 45 per cent) and
the increased rate of the Medicare levy (2 per cent)). [Schedule 1 to the
Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013, item 1, section 6
of the Fringe Benefits Tax Act 1986]
1.21 This amendment applies to the year of tax beginning on
1 April 2014 and later years of tax. [Schedule 1 to the Fringe Benefits Tax
Amendment (DisabilityCare Australia) Bill 2013, item 2]
Income Tax Rates Amendment (DisabilityCare Australia) Bill 2013
1.22 Section 29 of the Income Tax Rates Act 1986 specifies the rate
of tax payable by trustees of complying and non-complying
superannuation funds, and retirement savings account providers in respect
of no-TFN contributions income.
1.23 The rate of tax is calculated in accordance with subsection 29(2)
of the Income Tax Rates Act 1986. The Income Tax Rates Amendment
(DisabilityCare Australia) Bill 2013 will increase the component of the
rate of tax calculation, which incorporates the Medicare levy rate, from
1.5 to 2 per cent. [Schedule 1 to the Income Tax Rates Amendment (DisabilityCare
Australia) Bill 2013, item 1, paragraph 29(2)(a) of the Income Tax Rates Act 1986]
1.24 This amendment applies to assessments for the 2014-15 income
year and later income years. [Schedule 1 to the Income Tax Rates Amendment
(DisabilityCare Australia) Bill 2013, item 2]
10
Change to the Medicare levy rate
Superannuation (Excess Concessional Contributions Tax) Amendment
(DisabilityCare Australia) Bill 2013
1.25 Section 4 of the Superannuation (Excess Concessional
Contributions Tax) Act 2007 imposes excess concessional contributions
tax, which is payable under section 292-15 of the Income Tax Assessment
Act 1997 (ITAA 1997).
1.26 Section 292-15 of the ITAA 1997 provides that this tax is
payable by an individual if they make excess concessional contributions in
a financial year. Subdivision 292-B of the ITAA 1997 sets out the
thresholds where concessional contributions become excess concessional
contributions, and also how to work out the amount of an individual's
concessional contributions.
1.27 The Superannuation (Excess Concessional Contributions Tax)
Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at
which excess concessional contributions tax is payable from 31.5 to
32 per cent of an individual's excess concessional contributions for a
financial year (which is the sum of the maximum income tax rate under
Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent) and the increased Medicare levy rate (2 per cent), less the
general rate of tax paid by most superannuation funds (15 per cent)).
[Schedule 1 to the Superannuation (Excess Concessional Contributions Tax)
Amendment (DisabilityCare Australia) Bill 2013, item 1, section 5 of the
Superannuation (Excess Concessional Contributions Tax) Act 2007]
1.28 This amendment applies to assessments for the 2014-15
financial year and later financial years. [Schedule 1 to the Superannuation
(Excess Concessional Contributions Tax) Amendment (DisabilityCare Australia)
Bill 2013, item 2]
Superannuation (Excess Non-concessional Contributions Tax)
Amendment (DisabilityCare Australia) Bill 2013
1.29 Section 4 of the Superannuation (Excess Non-concessional
Contributions Tax) Act 2007 imposes excess non-concessional
contributions tax, which is payable under section 292-80 of the
ITAA 1997.
1.30 Section 292-80 of the ITAA 1997 provides that this tax is
payable by an individual if they make excess non-concessional
contributions in a financial year. Subdivision 292-C of the ITAA 1997
sets out the thresholds where non-concessional contributions become
excess non-concessional contributions, and also how to work out the
amount of an individual's non-concessional contributions.
11
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
1.31 The Superannuation (Excess Non-concessional Contributions
Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the
rate at which excess non-concessional contributions tax is payable from
46.5 to 47 per cent of an individual's excess non-concessional
contributions for a financial year (which is the sum of the maximum
income tax rate under Part I of Schedule 7 to the Income Tax Rates
Act 1986 (currently 45 per cent) and the increased Medicare levy rate
(2 per cent). [Schedule 1 to the Superannuation (Excess Non-concessional
Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013, item 1, section 5 of
the Superannuation (Excess Non-concessional Contributions Tax) Act 2007]
1.32 This amendment applies to assessments for the
2014-15 financial year and later financial years. [Schedule 1 to the
Superannuation (Excess Non-concessional Contributions Tax) Amendment
(DisabilityCare Australia) Bill 2013, item 2]
Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(DisabilityCare Australia) Bill 2013
1.33 Section 4 of the Superannuation (Excess Untaxed Roll-over
Amounts Tax) Act 2007 imposes tax on an excess untaxed roll-over
amount, which is payable under section 306-15 of the ITAA 1997.
1.34 The amount of the tax is a percentage of the excess untaxed
roll-over amount. The Superannuation (Excess Untaxed Roll-over
Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 will
increase the amount of the tax from 46.5 to 47 per cent (which is the sum
of the maximum income tax rate under Part I of Schedule 7 to the Income
Tax Rates Act 1936 (currently 45 per cent) and the increased Medicare
Levy rate (2 per cent)). [Schedule 1 to the Superannuation (Excess Untaxed
Roll-over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013, item 1,
paragraph 5(2)(a) of the Superannuation (Excess Untaxed Roll-over Amounts Tax)
Act 2007]
1.35 This amendment applies to excess untaxed roll-over amounts
paid on or after 1 July 2014. [Schedule 1 to the Superannuation (Excess Untaxed
Roll-over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013, item 2]
Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare
Australia) Bill 2013
1.36 Section 3 of the Income Tax (TFN Withholding Tax (ESS))
Act 2009 imposes income tax on amounts that are included in an
individual's assessable income under Division 83A of the ITAA 1997 as a
result of a company providing one or more ESS interests under an
employee share scheme, and the individual has not quoted an ABN or a
tax file number (TFN).
12
Change to the Medicare levy rate
1.37 The Income Tax (TFN Withholding Tax (ESS)) Amendment
(DisabilityCare Australia) Bill 2013 will increase the rate of tax from
46.5 to 47 per cent (which is the sum of the maximum income tax rate
under Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent), and the increased Medicare levy rate (2 per cent)). [Schedule 1
to the Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare
Australia) Bill 2013, item 1, section 4 of the Income Tax (TFN Withholding Tax (ESS))
Act 2009]
1.38 This amendment applies to ESS interests (within the meaning of
the ITAA 1997) provided on or after 1 July 2014. [Schedule 1 to the Income
Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare Australia) Bill 2013,
item 2]
Income Tax (First Home Saver Accounts Misuse Tax) Amendment
(DisabilityCare Australia) Bill 2013
1.39 Section 4 of the Income Tax (First Home Saver Accounts Misuse
Tax) Act 2008 imposes income tax on payments from a First Home Saver
Account (FHSA) held by an individual, to the extent that it is payable
where an account holder improperly uses an FHSA and money is paid
from the FHSA for the purchase of a first home, in accordance with
section 345-100 of the ITAA 1997.
1.40 The amount of tax is calculated by reference to the `adjusted
maximum tax rate', which is the sum of the maximum income tax rate
under Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent) and the Medicare levy rate. The Income Tax (First Home
Saver Accounts Misuse Tax) Amendment (DisabilityCare Australia)
Bill 2013 will increase the Medicare levy rate to 2 per cent. [Schedule 1 to
the Income Tax (First Home Saver Accounts Misuse Tax) Amendment (DisabilityCare
Australia) Bill 2013, item 1, definition of adjusted maximum tax rate in section 3 of the
Income Tax (First Home Saver Accounts Misuse Tax) Act 2008]
1.41 This amendment applies to payments from a FHSA (within the
meaning of the ITAA 1997) made on or after 1 July 2014. [Schedule 1 to the
Income Tax (First Home Saver Accounts Misuse Tax) Amendment (DisabilityCare
Amendment) Bill 2013, item 2]
Family Trust Distribution Tax (Primary Liability) Amendment
(DisabilityCare Australia) Bill 2013
1.42 Section 3 of the Family Trust Distribution Tax (Primary
Liability) Act 1998 imposes tax payable under section 271-15, 271-20,
271-25, 271-30 or 271-55 in Schedule 2F to the ITAA 1936 (trust losses
and other deductions), on the amount or value of income or capital.
13
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
1.43 The Family Trust Distribution Tax (Primary Liability)
Amendment (DisabilityCare Australia) Bill 2013 will increase the rate of
tax payable from 46.5 to 47 per cent (which is the sum of the maximum
income tax rate under Part I of Schedule 7 to the Income Tax Rates
Act 1986 (currently 45 per cent), and the increased rate of the Medicare
levy (2 per cent)). [Schedule 1 to the Family Trust Distribution Tax (Primary
Liability) Amendment (DisabilityCare Australia) Bill 2013, item 1, section 4 of the
Family Trust Distribution Tax (Primary Liability) Act 1998]
1.44 This amendment applies to tax payable under section 271-55 in
Schedule 2F to the ITAA 1936 for notices mentioned in that section that
are given by the Commissioner on or after 1 July 2014. Otherwise, the
amendment applies to present entitlements conferred, or distributions
made, on or after 1 July 2014. [Schedule 1 to the Family Trust Distribution Tax
(Primary Liability) Amendment (DisabilityCare Australia) Bill 2013, item 2]
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment
(DisabilityCare Australia) Bill 2013
1.45 The Taxation (Trustee Beneficiary Non-disclosure Tax)
Act (No. 1) 2007 imposes the tax payable under paragraph 102UK(2)(a) of
the ITAA 1936. Section 102UK of the ITAA 1936 concerns trustee
beneficiary non-disclosure tax where a share of the net income of the trust
is distributed to the trustee of a closely held trust and there is no correct
trustee beneficiary statement.
1.46 The Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1)
Amendment (DisabilityCare Australia) Bill 2013 will increase the rate of
the tax from 46.5 to 47 per cent (which is the sum of the maximum
income tax rate payable under the Part I of Schedule 7 to the Income Tax
Rates Act 1986 (currently 45 per cent) and the increased Medicare levy
rate (2 per cent)). [Schedule 1 to the Taxation (Trustee Beneficiary Non-disclosure
Tax) (No. 1) Amendment (DisabilityCare Australia) Bill 2013, item 1, section 4 of the
Taxation (Trustee Beneficiary Non-disclosure Tax) Act (No. 1) 2007]
1.47 This amendment applies to the 2014-15 income year and later
income years. [Schedule 1 to the Taxation (Trustee Beneficiary Non-disclosure Tax)
(No. 1) Amendment (DisabilityCare Australia) Bill 2013, item 2]
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment
(DisabilityCare Australia) Bill 2013
1.48 The Taxation (Trustee Beneficiary Non-disclosure Tax)
Act (No. 2) 2007 imposes the tax payable under paragraph 102UM(2)(a)
of the ITAA 1936. Section 102UM of the ITAA 1936 concerns trustee
beneficiary non-disclosure tax where a share of the net income of the trust
14
Change to the Medicare levy rate
is distributed to the trustee of a closely held trust, and section 102UK does
not apply.
1.49 The Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2)
Amendment (DisabilityCare Australia) Bill 2013 will increase the rate of
the tax to 47 per cent (which is the sum of the maximum income tax rate
payable under the Part I of Schedule 7 to the Income Tax Rates Act 1986
(currently 45 per cent) plus the Medicare levy (2 per cent)). [Schedule 1 to
the Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment
(DisabilityCare Australia) Bill 2013, item 1, section 4 of the Taxation (Trustee
Beneficiary Non-disclosure Tax) Act (No. 2) 2007]
1.50 This amendment applies to the 2014-15 income year and later
income years. [Schedule 1 to the Taxation Trustee Beneficiary Non-disclosure Tax)
(No. 2) Amendment (DisabilityCare Australia) Bill 2013, item 2]
15
Chapter 2 Statement of Compatibility
with Human Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013
Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013
Income Tax Rates Amendment (DisabilityCare Australia) Bill 2013
Superannuation (Excess Concessional Contributions Tax) Amendment
(DisabilityCare Australia) Bill 2013
Superannuation (Excess Non-concessional Contributions Tax)
Amendment (DisabilityCare Australia) Bill 2013
Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(DisabilityCare Australia) Bill 2013
Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare
Australia) Bill 2013
Income Tax (First Home Saver Accounts Misuse Tax) Amendment
(DisabilityCare Australia) Bill 2013
Family Trust Distribution Tax (Primary Liability) Amendment
(DisabilityCare Australia) Bill 2013
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment
(DisabilityCare Australia) Bill 2013
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment
(DisabilityCare Australia) Bill 2013
2.1 These Bills are compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
17
Medicare Levy Amendment (DisabilityCare Australia) Bill 2013 and supporting Bills
Overview
2.2 The Medicare Levy Amendment (DisabilityCare Australia)
Bill 2013 amends the Medicare Levy Act 1986 to increase the rate of the
Medicare levy to 2 per cent. The remaining Bills make a number of
consequential amendments, incorporating the rate change into other Acts
that refer to the Medicare levy rate.
2.3 The purpose of increasing the Medicare levy rate is to fund
DisabilityCare Australia, the National Disability Insurance Scheme. The
establishment of DisabilityCare Australia complements existing measures
to remove discrimination against persons with disabilities in Australia,
and to provide them with support and assistance, such as the Disability
Discrimination Act 1992, the Disability Services Act 1986; the provision
of income support through the Disability Support Pension, Carer Payment
and Carer Allowance; and Commonwealth, State and Territory
government programs, the National Disability Strategy, and the National
Disability Agreement.
2.4 For further information regarding the human rights implications
of the National Disability Insurance Scheme, refer to the Statement of
Compatibility which accompanied the National Disability Insurance
Scheme Bill 2012.
Human rights implications
2.5 These Bills do not engage any of the applicable rights or
freedoms.
Conclusion
2.6 These Bills are compatible with human rights as they do not
raise any human rights issues.
Deputy Prime Minister and Treasurer,
the Hon Wayne Swan MP
18
Index
Schedule 1: Medicare Levy Amendment (DisabilityCare
Australia) Bill 2013
Bill reference Paragraph number
Items 1 to 3, subsections 6(1) to 6(3) of the Medicare Levy Act 1986 1.14
Item 1, section 6 of the Fringe Benefits Tax Act 1986 1.20
Item 1, paragraph 29(2)(a) of the Income Tax Rates Act 1986 1.23
Item 1, section 5 of the Superannuation (Excess Concessional 1.27
Contributions Tax) Act 2007
Item 1, section 5 of the Superannuation (Excess Non-concessional 1.31
Contributions Tax) Act 2007
Item 1, paragraph 5(2)(a) of the Superannuation (Excess Untaxed 1.34
Roll-over Amounts Tax) Act 2007
Item 1, section 4 of the Income Tax (TFN Withholding Tax (ESS)) 1.37
Act 2009
Item 1, definition of adjusted maximum tax rate in section 3 of the 1.40
Income Tax (First Home Saver Accounts Misuse Tax) Act 2008
Item 1, section 4 of the Family Trust Distribution Tax (Primary 1.43
Liability) Act 1998
Item 1, section 4 of the Taxation (Trustee Beneficiary Non- 1.46
disclosure Tax) Act (No. 1) 2007
Item 1, section 4 of the Taxation (Trustee Beneficiary Non- 1.49
disclosure Tax) Act (No. 2) 2007
Item 2 1.21, 1.24, 1.28, 1.32,
1.35, 1.38, 1.41, 1.44,
1.47, 1.50
Item 4, subsection 7(4) of the Medicare Levy Act 1986 1.16
Items 5 and 6, subsection 8(2) of the Medicare Levy Act 1986 1.17
Item 7 1.18
19
21