Fringe Benefits Tax
Fringe Benefits Tax (FBT) is a necessity for those who receive benefits from an employer. It can affect your taxation obligations, child support payments and eligibility for Government benefits.
FBT is reportable under the legislation for the Defence Home Ownership Assistance Scheme (DHOAS). This means that Defence will pay the FBT on your behalf at a rate of 48.5% on the grossed up value of the benefit.
The amount of money which will appear on your group certificate will be the 'grossed up' amount, as Defence is obliged to report it in this way.
The grossed up amount is simply the value of the benefit in pre-tax dollars. In other words, it is how much you would have to earn in order to purchase the fringe benefit yourself.
Reportable fringe benefits may be included in income tests for government benefits such as the Medicare levy, HECS and child support obligations.
In addition, the non grossed up value of the fringe benefit may be used to determine certain income tested government benefits such as the family tax benefit and the parental income test for the youth allowance. It may also have an effect on childcare payment arrangements.
As tax matters are complicated, we urge members to seek independent financial advice on their individual circumstances before accessing DHOAS.