Section CX 16 — Income Tax Act 2007: Contributions to life or health insurance

CX 16 Contributions to life or health insurance When fringe benefit arises (1) A fringe benefit arises when an employer pays a specified insurance premium or makes a contribution to the insurance fund of a friendly society for the benefit of an employee. Exclusion (2) This section does not apply to a premium or contribution described in section CZ 15 (Accident insurance contracts before 1 July 2000). Meaning of specified insurance premium (3) In this section, specified insurance premium means a premium paid for the benefit of an employee, their spouse, civil union partner or de facto partner, or their child on a policy described in any of subsections (4) to (6). Life insurance (4) The first kind of policy referred to in subsection (3) is a policy of insurance on the life of the employee or their spouse, civil union partner or de facto partner, or on their joint lives, or on the life of their child, to which all the following apply: (a) for policies other than whole of life policies, the minimum term is— (i) 10 years; or (ii) 5 years, for a policy whose maturity date is no earlier than the date on which a life assured reaches 60 years of age; and (b) the only benefits payable earlier than 10 years from the start of the policy or its maturity date, whichever is earlier, are— (i) benefits payable for the death of a life assured; or (ii) additional benefits payable for an accident to a life assured or disease or sickness of a life assured; and (c) the policy— (i) provides for a payment on the death of a life assured of a benefit that is not a return of premiums, is substantially capital, and is not materially less than the total benefit payable under the policy otherwise than for death; or (ii) is a policy on the life of a person who, because of ill health or physical disability, is unable to effect a policy of the kind described in subparagraph (i) at ordinary rates; or (iii) is a deferred life assurance policy on the life of a child. Life insurance: pension benefit (5) The second kind of policy referred to in subsection (3) is a policy described in subsection (4), or that would be described if it met the requirements of subsection (4)(c)(i), and under which the only benefits payable are for a life assured and by way of— (a) a pension starting on or after the date on which the life assured reaches 60 years of age and continuing for the life of the employee, their spouse, civil union partner or de facto partner, or their child; or (b) on the death of the life assured,— (i) the return of the part of the premiums paid for the assurance to secure the payment of a pension dependent on the life of the employee, their spouse, civil union partner or de facto partner, or their child; and (ii) the payment of the part of each bonus declared on the policy attributable to the part of the premiums described in subparagraph (i). Health insurance (6) The third kind of policy referred to in subsection (3) is a policy of insurance under which the benefits are payable only for— (a) an accident, whether fatal or not, to the employee, their spouse, civil union partner or de facto partner, or their child; or (b) disease or sickness of the employee, their spouse, civil union partner or de facto partner, or their child. Defined in this Act: contribution , employee , employer , friendly society , fringe benefit , life insurance , pay , specified insurance premium , year Compare: 2004 No 35 s CX 15