Fringe Benefits Tax Exemption - Are You Still Entitled?
Fringe Benefits Tax Exemption - Are You Still Entitled?

20 Sep 2018

Plus... Family and Domestic Leave Entitlements and Reducing Red Tape for Charities at ACNC

Religious charities that employ religious practitioners may be entitled to an exemption from fringe benefits tax on benefits to employees who are religious practitioners. To be entitled, the religious charity must be registered with the ACNC as a charity with the subtype of advancing religion.

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The Constitution for a Charitable Company

On Friday 14 September, Emil Ford’s Joseph O’Mara presented at Legalwise’s annual Not-For-Profits and Charities Symposium on the topic of “The Constitution for a Charitable Company”.  Also present was the ACNC’s Assistant Commissioner and General Counsel, Murray Baird, who gave an update of the ACNC’s response to its five-year review and the ACNC’s current activities. A copy of Joseph’s paper can be found here.

ACNC Legislation Review proposes major changes for the not-for-profit sector

The Australian Charities and Not-for-profits Commission (ACNC) Legislation Review for 2018 was tabled in Federal Parliament on 22 August 2018 and contains a number of recommendations aimed at reducing red tape for charities and not-for-profits. The review proposes a three-step process to achieve this.  Read more...

Family and domestic violence leave now part of employee awards

Many employees of charities and not-for-profit organisations will now be able to access five days of unpaid leave per annum to deal with family and domestic violence. As of 1 August 2018, employees covered by an award are eligible for family and domestic violence leave following a Fair Work Commission ruling. However, this does not apply to staff who are covered by enterprise agreements or who are award and agreement-free.

Here are some of the key points:

  • Family and domestic violence means violent, threatening or other abusive behaviour by a family member of an employee that seeks to coerce or control the employee and that causes them harm or to be fearful.
  • The employee may take unpaid leave if they themselves are experiencing family and domestic violence or if the employee needs to do something to deal with the impact of the family and domestic violence and it is impractical for the employee to do that thing outside their ordinary hours of work. Examples include attending appointments, urgent court hearings or accessing police services, or assisting a family member to do one of those things. 
  • The unpaid leave is available to the employee in full at the start of each 12 month period of the employee’s employment.  Unlike most other forms of leave, it does not accrue.
  • It is available to full-time, part-time and casual employees if they are under the award.
  • The employee will be under certain obligations too. They must give their employer notice of the taking of leave as soon as practicable (which may be a time after the leave has started) and must advise the employer of the period or expected period of leave.
  • The employee may be asked to provide evidence that would satisfy a reasonable person that the leave was for family and domestic violence.
  • Employers must take steps to ensure that the information they collect from the employee about the family and domestic violence leave is treated confidentially, as far as it is reasonably practicable to do so.
  • However, an employer may disclose information provided by an employee if the disclosure is required by an Australian law or is necessary to protect the life, health or safety of the employee or another person.

For any employment issues, contact David Ford, Nathan Croot or Joseph O’Mara.

The dream of national fundraising legislation

At a recent charities and not-for-profits law conference, one senior lawyer described Australia’s charitable fundraising regime as “a national disgrace”, with different schemes applying in each state and territory. We have previously written about some of the issues facing charities when they try to fundraise (see here and here). Unless an exemption applies, charities must apply for an authority or licence in each state or territory if they receive donations from someone living there. For example, a New South Wales based charity appealing for donations over the internet would have to register as a charity in Queensland if just one of its donors was from Queensland.

Charities and practitioners alike have been advocating for years for national charitable fundraising legislation and there have been positive steps forward with South Australia and the ACT legislating exemptions in favour of registered charities. The hope of a national system is still alive after the Senate earlier this year agreed to establish a Committee to review the current charitable fundraising regime.

In June and July of 2018, charities and other interested parties were encouraged to make submissions to the Committee about their experiences with the fundraising legislation. They were also asked to propose some options for reform. Although the deadline for making a submission has now passed, charities should watch this space or monitor this link for updates. The Committee is expected to report in February 2019.

For more updates or for help in navigating the minefield that is charitable fundraising, get in touch with David FordJoseph O’Mara or Matt Van Arkel.

Is your religious organisation still entitled to a fringe benefits tax exemption?

Religious charities that employ religious practitioners may be entitled to an exemption from fringe benefits tax on benefits to employees who are religious practitioners. While this is not new, the ATO has now issued a new ruling giving its view of the provisions in the legislation.  The previous ruling about this has been withdrawn.

To be entitled to the exemption, the religious charity must be registered with the ACNC as a charity with the subtype of advancing religion.

Also the religious charity must employ at least one religious practitioner. A religious practitioner may be a minister of religion but also may be a student at a religious institution or a full-time member of a religious institution.

Finally, the benefit provided to the religious practitioner must be provided in respect of the practitioner’s pastoral duties or directly related religious activities. A minister or pastor who teaches and counsels a congregation or other members of the community, provides members of the community with spiritual guidance and support and meets with the sick or poor or others who need emotional and spiritual support will almost certainly meet this requirement.  However, a benefit provided to a minister who only performs accounting or administrative duties would not be exempt.

Religious charities do not have to provide the benefit directly to the religious practitioner. For example, if the religious institution were to pay the school fees of the religious practitioner’s child, that benefit would be exempt provided all other conditions were met.

You can read a copy of the ruling here. Please get in touch with David Ford or Matt Van Arkel if you have any questions about it.