Senate Community Affairs Legislation Committee [Part 2], , 1:44:48 to 1:50:02
Senator Ruston questions how the Private Health Insurance (PHI) rebate is monitored and enforced, focusing on the roles of Services Australia and the ATO in reconciling income tiers.
Topics: Health, Government spending
Speakers: Senator Anne Ruston, Paul McBride, Ross Hawkins, Unknown Speaker, Senator Ellie Whiteaker, Celia Street
>> Hello. Um just wanted to ask a few questions about uh they all relate to close the gap. Um the department's PBS shows the share of IHP funding going to Ainal.
>> Sorry. Um that's outcome one which is tomorrow
>> That's her bad. [laughter]
>> Blaming her. We'll we'll come to outcome one in an hour or so. >> Um okay, Senator Ruston.
>> Oh, great. Sorry. Now that's right. Um so I'm just keen in terms of um the the current way um the the rebate a person receives on their PHI, how that's monitored and enforced.
Sorry, Senator, can you repeat the question for me?
>> Okay. Um, currently, um, in terms of the rebate, not not the the, um, over 65, it's just the general PHI rebate. Um, how does a person receive receive it in terms of, so how is it monitored and how it's how it's enforced? I mean, [clears throat] I know the process of how they determine the rebate, but how is it monitored and how is it enforced? Senator Ross, I might start and then look at the way the rebate works, um it's an engagement with an individual and the insurer. >> Yeah. No, sorry. Just to save you time, I understand how the rebate is like how how somebody applies for a rebate when they join up to a private health insurance. I'm just interested how you or who who monitors um whether the rebate that's been claimed is the correct amount and how it's enforced that it's correct.
>> So that that goes in from the insurer to services Australia. Y >> um you know that obviously some of this sits through tax returns in terms of what's through through there. Um we've got a small compliance team as well that sits within within um Mr. McBride's
So, is it likely that it's the um the ATO that would identify if somebody had paid who had received too much rebate or too little rebate? Is that how it normally is identified?
um that processing each year to to look at faults and and whether what is passed through from insurers is is accurate, but most of the compliance is the
backend process Australia.
>> Yeah. So, Service Australia process most of the rebates. Some people claim straight from ATO, but Services Australia claim most of the rebates and we do a rebate audit at the end of the year just to see how that is working and make sure there's integrity in the process. But most of the compliance at an individual level is done by the tax
>> So, the compliance is done by the tax office. So, I'm just trying to understand the services Australia
component of what we're talking about here. pay that that actually that's already you a less amount and claims the money through service will
>> charge you a less amount. Yeah. >> Yeah. >> Yeah. So I'm just trying to understand. So I turn up and I buy a product from a private health insurer in there. I'm assuming they're going to say to me um you know um check your eligibility as to whether you can get a a a rebate. Um and it will ask you a series of questions. you know, is your income above this or below this? And you'll say, "My income is below $100,000. So therefore, I'm eligible for the base tier of the rebate." So when the private health insurer then gives me a bill for my um health insurance, it will have already had the rebate component that I'm eligible for deducted off that. I'm sort of keen to understand what happens after that to reconcile either do so is it only reconciled at the end of the year or is it reconciled monthly for those people that actually see like depending on how you pay your rebate?
>> End of the year. Senator
>> sorry
>> end of the year.
>> Okay. And is that so I'm try I understand the tax office. So if you put in your tax return and your tax return said you earned $120,000 and you told the thing you earned 100, they'll say you obviously owe into the tier one of the rebate. So therefore you need to refund blah to for that. Where's the service Australia component of this come in? Because if I'm a well say if it was won't be me but say if it was somebody who was had no involvement with services Australia how would service Australia become involved >> or could somebody only be interact with the tax office and your department?
>> The rebot order looks mostly at the way the insuranceers process claims. So do they record information correctly and and and is that pass through? So the rebate they claim through service Australia has that gone appropriately.
>> So services Australia are the one that delivers the rebate not the department of health.
>> Yes correct.