(1) This section applies to a payment or supply if:
(a) it is a payment or supply made under a * compulsory third party scheme; and
(b) the payment or supply is made in settlement of a claim under an * insurance policy; and
(c) there is only one * operator who issues insurance policies under the scheme; and
(d) assuming the requirements of paragraph 78-10(2)(b) were satisfied, the operator would have a * decreasing adjustment under section 78-10 in respect of the payment or supply; and
(e) an election under subsection (4) is in force during the * financial year in which the payment or supply is made.
(2) For the purposes of section 78-10, the * operator has a * decreasing adjustment under that section in relation to the payment or supply.
(3) Section 78-15 does not apply to the * decreasing adjustment, but its amount is instead worked out using the applicable * average input tax credit fraction (see section 79-95).
(4) The * operator may, in writing, elect that, from the start of a specified * financial year, any * decreasing adjustment in relation to all payments or supplies:
(a) that are made during the financial year; and
(b) to which paragraphs (1)(a), (b), (c) and (d) apply;
are to be worked out using the applicable * average input tax credit fraction.
(5) Subject to subsection (6), the election must be made before the start of the specified * financial year.
(6) Subsection (5) does not apply if the election specifies the * financial year beginning on 1 July 2003 and is made before the end of 30 days after the day on which this section commences.
(7) The election is in force during the specified * financial year and every later financial year, other than one that begins after a financial year in which the election is revoked.