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Changes to Fringe Benefit Payments
Do you receive Reportable Fringe Benefits from your employer? Do you also receive Family Assistance Payments?
Changes to Income Tax Tests for From 1 January 2017 for Reportable Fringe Benefits from January 1 2017 may affect you.
All of the reportable fringe benefits now count as income for anyone who receives family assistance and youth income support payments, including:
Family tax benefit part A and part B
Child care benefit
Youth allowance
ABSTUDY
Stillborn baby payment
Parental leave pay
Dad and partner pay
Assistance for isolated children additional boarding allowance.
Exemptions apply only if you work for organisations defined under section 57A of the Fringe Benefits Tax Assessment Act 1986, which are:
public benevolent institutions or health promotion charities that qualify for a $30,000 cap per employee
some hospital and ambulance services that qualify for a $17,000 cap per employee
Fringe Benefits Change and Adjusted Taxable Income
The Government has changed the treatment of fringe benefits which impacts the way adjusted taxable income (ATI) is calculated for family assistance payments, and for parental income tests which apply to youth income support payments. The ATI is also used in income tax tests such as net medical expenses tax offset, dependant tax offsets, and seniors and pensioners tax offset.
To understand what ATI – Adjusted Taxable Income exactly is please go here
Under the change, the grossed-up value of fringe benefits will be used for the purposes of calculating ATI. The grossed-up value of fringe benefits is already reported as reportable fringe benefits amount by the employer on their employee's pay as you go payment summary.
Currently, the reportable fringe benefits amount is adjusted down for the purposes of calculating ATI for those benefits.
The change will not apply to fringe benefits sourced from certain not-for-profit institutions that are eligible for exemption from fringe benefits tax, which includes:
registered health promotion charities
registered public benevolent institutions
some hospitals and
public ambulance services
These employees will continue to be assessed under the current arrangements where the reportable fringe benefits amount is adjusted down.
The measure, which received royal assent on 16 September 2016, takes effect from 1 January 2017 for family assistance payments and applies to income tax tests from 1 July 2017.
The Australian Government of Human Services has also released information on this subject, you can read this here
