Changes to Reportable Fringe Benefits
19 December 2016 at 11:47 am
Not for profit employees receiving family assistance or youth income support payments are being warned of upcoming changes to reportable fringe benefits.
The Department of Social Services has advised that from 1 January 2017, 100 per cent of fringe benefits, will be counted as income, instead of the current 51 per cent when calculating eligibility for family assistance and youth income support payments.
Fringe benefits are an extra benefit supplementing an employee’s wage or salary, for example a company car or private health care.
Employees do not pay income tax or Medicare levy on fringe benefits, but the department looks at reportable fringe benefits to assess:
- Family Tax Benefit Part A and Part B
- Child Care Benefit, Child Care Rebate, Child Care Subsidy, and Jobs, Education and Training Fee Assistance
- Youth Allowance
- Special Benefit
- Stillborn Baby Payment
- Paid Parental Leave
- Dad and Partner Pay
- Assistance for Isolated Children Additional Boarding Allowance
The latest changes mean some staff members may need to update their income estimates.
A departmental spokesperson said anyone who received a reportable fringe benefit amount as part of their annual adjusted taxable income from the 2016/17 financial year onwards may be affected by the changes.
“However, it is estimated that 65 per cent of people receiving a family assistance or youth payment with reportable fringe benefits will not be affected because they work for an exempt employer (certain not-for-profit organisations),” they said.
People who work for certain not-for-profit organisations, including public benevolent institutions or health promotion charities that qualify for a $30,000 cap per employee or some hospital and ambulance services that qualify for a $17,000 cap per employee, will be exempt from this change.
However, employees who fall into this category still need to contact the Department of Human Services before 1 January 2017, to avoid a reduction in their payments.
Employees are being advised to check with payroll staff to confirm whether their income is exempt from this change.
“The best way for a person to establish whether their employer is an exempt organisation is to speak with their employer’s payroll area,” the departmental spokesperson said.
For more information about how the changes to reportable fringe benefits see here.