REMUNERATION TRIBUNAL...

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What’s New?

� No limit on salary sacrifice for superannuation contributions to a complying fund. Pages 6 to 11

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LLIISSTT OOFF AABBBBRREEVVIIAATTIIOONNSS

ATO Australian Taxation OfficeDIY Do it YourselfFBT Fringe Benefits TaxGST Goods and Services TaxPAYE Pay As You Earn TaxPBI Public Benevolent InstitutionSSA Salary Sacrifice Agreement and/or Salary

Sacrifice ArrangementWorkCover (SA) Worker’s Rehabilitation and Compensation

system in South Australia

Definitions:

Terms used herein have the meaning given in the Determination of theRemuneration Tribunal made on the 17th day of July 2007.

“Determination” is the Determination of the Remuneration Tribunal No. 6 of 2007;

“nominee” means the Panel Member selected by the office holder where need be toadminister his or her Salary Sacrifice Arrangement;

“office holders” means officers within the terms and provisions of the Determination;

“paying authority” means a paying authority within the terms and provisions of theDetermination;

DDIISSCCLLAAIIMMEERR

This publication has been prepared without consideration of the particular investmentobjectives or financial situation of office holders (also referred to in this booklet as “officeholder” as appropriate). In all cases, office holders should conduct their own investigationand analysis of the information contained in this publication. No office holder should act onthe basis of any matter contained in this publication without obtaining, considering and takingappropriate independent legal, financial or other professional advice in respect of the officeholder’s own particular and personal circumstances. It is strongly recommended that eachoffice holder who wishes to take advantage of Salary Sacrifice seek appropriate independentlegal, financial or other professional advice regarding entry into Salary Sacrifice and theirSalary Sacrifice arrangement.

The State of South Australia and its agencies, instrumentalities, the paying authorities onbehalf of the office holders, the State Courts Administrator, the Chief Executive, Departmentfor Administrative and Information Services, the Chief Executive, Attorney General’sDepartment, the Chief Executive, Auditor General’s Department, the Chief Executive, StateElectoral Office, and the Remuneration Tribunal (referred to in this booklet as the “Tribunal”)and each of their respective employees and every person associated or connected with thepreparation of this publication expressly disclaims all liability for any loss or damage of anykind whatsoever (whether foreseeable or not) which may arise from any person/s acting uponor in reliance in respect of any statement contained in this publication.

This disclaimer does not limit or alter those statutory rights, which cannot be abrogated.

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1. Introduction..............................................................................................5What is the Salary Sacrifice?...................................................................5

2. Office Holders only sacrificing into Triple S Scheme...............................6Principles of the Salary Sacrifice Arrangement .......................................6

3. How the Salary Sacrifice Arrangement Works.........................................84. Salary Matters .........................................................................................8

Offer to Participate in Salary Sacrifice.....................................................9Salary For the Purposes of Salary Sacrifice............................................9Change in Salary Sacrifice Agreement....................................................9

5. Superannuation .......................................................................................9State Pension Scheme..........................................................................10State Lump Sum Scheme .....................................................................10Southern State Superannuation Scheme (Triple S Scheme) ................11

6. Administration of the Salary Sacrifice Arrangement ..............................11 Role of the Nominee..............................................................................11Forms and Information ..........................................................................13List of Approved Nominees ...................................................................13Approved Services to be Provided by Nominee ....................................14Reports to Office Holder by Nominee....................................................15Customer Service Standards of Nominee .............................................15Dispute Resolution Process ..................................................................16Customer Focus Group .........................................................................17

7. Officer holders Terms and Conditions of the Salary SacrificeAgreement.............................................................................................17Terms and Conditions ...........................................................................17Methods of Payment .............................................................................18Costs Incurred Prior to Commencement of Salary Sacrifice..................18Reimbursement of Payments in Respect to Salary Sacrifice Benefits...18Allocating Money to Salary Sacrifice Benefits .......................................18No Funds = No Payment .......................................................................19Annual Reconciliation............................................................................19

8. Taxation Implications.............................................................................19Fringe Benefit Tax Reporting Requirements .........................................19

9. Salary Sacrifice: Approved Benefits .....................................................19Contributions to Complying Private Superannuation Fund....................22

10. Where to from Here...............................................................................22Establishing a salary sacrifice arrangement (except where an officeholders’ salary sacrifice arrangement only involves sacrifice of salaryinto the triple s scheme) ........................................................................22Establishing a salary sacrifice arrangement where an office holders’salary sacrifice arrangement only involves sacrifice of salary into thetriple s scheme ......................................................................................23

APPENDIX A - BENEFITS.............................................................................24

DESCRIPTION OF BENEFIT ITEMS ............................................................25

A1 Additional Superannuation Contributions ..............................................25A2 Home Office Expenses..........................................................................27

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A3 Membership Fees and Subscriptions to Professional Associations.......28A4 Financial Counselling Fees ...................................................................29A5 Disability/Income Protection Insurance Premiums ................................30A6 Self Education Expenses ......................................................................30A7 Own Home Mortgage Payments ...........................................................31A8 Personal Loan Servicing from Registered Financial Institutions............32A9 Private Home Rental .............................................................................33A10 School Fees Including Higher Education Contribution Scheme

Payments ..........................................................................................34A11 Private Travel ........................................................................................34A12 Trauma/Life Insurance Premiums .........................................................35A13 Childcare Expenses by a Registered Provider ......................................36A14 Aged or Disabled Care Expenses .........................................................37A15 Private Health Insurance Contributions .................................................37A16 Own Motor Vehicle through a Novated Lease.......................................38A17 Household Utilities.................................................................................39A18 Household Rates...................................................................................40A19 Car Parking ...........................................................................................40A20 Taxi Travel to and from Work ................................................................41A21 Staff Fitness/Gym Facility (In House) ....................................................41

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The Tribunal in its Determination regarding Salary Sacrifice, No. 6 of 2007for Judges, Court Officers and Statutory Officers provides that a salarysacrifice arrangement is to be made available to these office holders, pursuantto the terms and conditions of the Determination.

The Information Booklet gives information regarding the Salary SacrificeArrangement that is available to office holders.

Note: All of the documentation for the Tribunal’s Salary SacrificeArrangements has been drawn up to conform with ATOguidelines.

What is the Salary Sacrifice? Office holders can choose to take their remuneration either by way of:

• Cash salary; or

• A combination of cash salary and the receipt of selected salary based non-cash benefits.

The salary based non-cash benefits (referred to in this booklet as “SalarySacrifice benefits”) are chosen by the office holder in lieu of salary andwages.

The Salary Sacrifice benefits selected by an office holder participating in theSalary Sacrifice Arrangement are paid for by the paying authority offering theSalary Sacrifice Arrangement to the office holders.

The payment of Salary Sacrifice benefits by the paying authority is madethrough the office holder’s nominee for distribution to the providers of theSalary Sacrifice benefits, except where the office holder is sacrificing only intothe Triple S Scheme the paying authority will administer the Salary SacrificeArrangement and make the appropriate payments into the Triple S Schemewithout the need for the office holder to appoint a Nominee.

Selection of Salary Sacrifice benefits is designed to suit the individual andpersonal needs of office holders participating in the Salary SacrificeArrangement.

The Fringe Benefits Tax Assessment Act 1986 and the Income TaxAssessment Act(s) 1936 regulate and define:

• The type of Salary Sacrifice benefits that:

� Are available to office holders; and

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� Can be packaged by office holders; and

• How Salary Sacrifice benefits are to be treated for tax purposes.

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All office holders who sacrifice only into the Triple S Scheme need to note thefollowing:

• these office holders do not need to nominate a Nominee and allcomments in the Booklet relating to a Nominee do not concernthem;

• these office holders need only pay the Administration Fee payableto the paying authority; no Administration Fee is payable to aNominee;

• office holders may obtain all documents needed to effect sacrificedsalary into the Triple S Scheme from the paying authority;

• the paying authority will pay the sacrificed amount into the Triple SScheme and administer the office holder’s Salary SacrificeArrangement without the need for an office holder to appoint aNominee;

• as with all salary sacrifice, it is strongly recommended that anOffice Holder who wishes to take advantage of this benefit seeksappropriate independent legal, financial or other professionaladvice to ensure that the benefit arrangements comply withrelevant taxation legislation and rulings.

Principles of the Salary Sacrifice Arrangement The Salary Sacrifice Arrangement is provided to office holders, by theRemuneration Tribunal in its Determination on Salary Sacrifice No. 6 of 2007with the following provisos:

• That it is introduced at no additional cost to the paying authority:

� Office holders entering into a salary sacrifice arrangement will berequired to pay all costs associated with providing the salary sacrificearrangement, including:

• Any Fringe Benefits Tax (FBT) liability incurred by the payingauthority as a result of the office holder entering into a salarysacrifice;

• The costs incurred by the paying authority in setting up eachindividual salary sacrifice arrangement; and

• The administration fee charged by the office holder’s nominee.

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• A maximum of 50%, of the office holder’s pre-tax salary prescribed in theDetermination, may be sacrificed and applied to non-cash benefits(referred to in this booklet as the “sacrificed amount”) – with theexception of Superannuation. There is no limit on salary sacrifice forsuperannuation contributions to a complying fund.

• Participating office holders are required to appoint a nominee from a list ofpanel members approved by the paying authority for the day to dayadministration of the office holder’s Salary Sacrifice arrangements (eg. thedistribution of the Salary Sacrifice benefits to intended recipients), exceptwhere sacrificing to the Triple S Scheme only. Where no nominee has tobe appointed; the paying authority will pay directly into the Triple SScheme. For details of the approved nominees, see page 14.

• Salary packaging is to be cost neutral to the Government. There are costsassociated with setting up and maintaining Salary Sacrifice arrangementsfor office holders particularly in payroll areas.

As a result, the paying authority will charge anadministration/participation fee of $25.00 + GST to partially offset thesecosts. The fee will be payable by office holders participating in SalarySacrifice arrangements and will be paid to the relevant paying authority.This fee will be charged for each SSA entered into by an office holder andwill be in addition to any fees charged to the office holder by the officeholder’s nominee.

Fee Structure:

Please note, the administration fee may be subject to change from timeto time as permitted by the paying authority.

The administration fee is payable to the nominee by equal fortnightlyinstalments in arrears.

The fee structure for the respective nominees may be determined byenquiry to the contacts listed on page 14.

An Administration charge of $27.50 including GST is payable to thepaying authority by the office holder at the commencement of eachsalary sacrifice arrangement.

Note: Office holders who participate in the SSA are stronglyrecommended to seek independent financial advice with regard totheir decision as to whether to Salary Sacrifice and their SalarySacrifice Arrangement. It is the sole responsibility of officeholders to seek and obtain such advice and it is not a matter thathas anything to do with the paying authority.

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The major processes of the Salary Sacrifice Arrangement, as set out in thecontract between the Government and the nominee, are as follows:

(a) the office holder to select Salary Sacrifice benefits in respect of theirSalary Sacrifice arrangements except where the office holder issacrificing only into the Triple S Scheme;

(b) the office holder must seek their own independent advice from afinancial adviser;

(c) the office holder to elect to enter into an SSA;(d) the nominee where appointed is to confirm the office holder’s Salary

Sacrifice arrangement details and to notify the employer or payingauthority of individual and total:(i) payroll deductions in respect of the sacrificed amount; and(ii) the estimated FBT liability;

(e) the nominee where appointed to commence and continue theperformance of administrative duties, functions and obligations withregard to the carrying on of the business and the provision of servicesincluding the distribution and/or transfer associated with SalarySacrifice arrangements;

(f) the paying authority to remit sacrificed amounts (including anybudgeted FBT amount) to the nominee in each payroll period unlessthe office holder’s only sacrifice is into the Triple S Scheme;

(g) the nominee where appointed to prepare reconciliations and advice tothe paying authority of actual expenses and FBT liabilities incurred;

(h) the paying authority to make FBT payments to Australian TaxationOffice; and

(i) the nominee where appointed to provide appropriate reporting to officeholders and the paying authority.

Note: If there is an outstanding FBT liability to the paying authorityoccasioned by the office holder’s Salary Sacrifice arrangements(i.e. the failure on the part of the office holder to provide orbudget for the right amount), then the paying authority willrecover this from the office holder.

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Office holders electing to Salary Sacrifice have the option of sacrificing up to50% of their salary each financial year in which they participate in SalarySacrifice, with the exception of Superannuation. There is no limit on salarysacrifice for superannuation contributions to a complying fund.

Salary is defined in the Determination of the Tribunal.

Each pay period the paying authority’s pay office will transfer the amount ofthe office holder’s salary sacrificed to the office holder’s nominee where

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appointed for distribution in respect of selected Salary Sacrifice benefits andany resulting FBT liability.

At the time of entering into the Salary Sacrifice Arrangement, the payingauthority will require the office holder to complete certain forms and providecertain information to his or her nominee to ensure the proper and orderlydistribution of the amount of the office holder’s sacrificed salary to providers ofselected Salary Sacrificed benefits.

Offer to Participate in Salary Sacrifice The following forms will be obtainable from the nominee, not your payrolloffice, except that office holders who are only sacrificing into the Triple SScheme may obtain the necessary forms from the payroll office of the payingauthority.

Each office holder intending to participate will receive from their payingauthority (supplied by the nominee) a SALARY SACRIFICE AGREEMENT (“SSA”),which sets out the terms and conditions of Salary Sacrifice. Attached to theSALARY SACRIFICE AGREEMENT, the ACCEPTANCE OF OFFER OF SALARYSACRIFICE will include a statement of salary of the office holder.

Salary For the Purposes of Salary Sacrifice The maximum percentage of salary that can be sacrificed by an office holderwill be as determined by the Remuneration Tribunal from time to time.

Change in Salary Sacrifice Agreement Where an office holder is required to enter into a new Salary SacrificeAgreement, the office holder will bear any costs incurred with this process.

It is the responsibility of an office holder participating in Salary Sacrifice tonotify the nominee or if a nominee has not been appointed the payingauthority, immediately upon the time he/she ceases to hold a public officespecified in his/her Salary Sacrifice Agreement.

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The following brief overview of the superannuation implications for officeholders, and other employees1 who elect to Salary Sacrifice, has beenprovided by Super SA.

1 subject to the definition of employees for superannuation purposes under theSuperannuation Act, 1988, and subject to the definition of member under the Southern StateSuperannuation Act, 1994.

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The superannuation implications are shown for each State superannuationscheme separately.

Salary Sacrificed amounts will be acceptable by Super SA from StatePension, Lump Sum and Triple S scheme members.

It is important to note that employee contributions required to be paid into theState Pension and Lump Sum schemes cannot be directed to these schemesby way of Salary Sacrifice. Employee contributions to be paid to either ofthese schemes, must continue to be deducted from after tax income.

Where an office holder elects to Salary Sacrifice superannuationamounts to Super SA, the Salary Sacrifice amounts will be for paymentinto the Triple S Scheme. Office holders also have the option ofsacrificing into a complying private superannuation fund.

Where an application to join the Triple S Scheme is required for salary-sacrificed amounts (i.e., State Pension and Lump Sum scheme members),forms can be obtained from your paying authority.

As with all salary sacrifice, it is strongly recommended that an Office Holderwho wishes to take advantage of this benefit seeks appropriate independentlegal, financial or other professional advice to ensure that the benefitarrangements comply with relevant taxation legislation and rulings.

Note: Should any office holder wish to discuss their own personalsituation regarding sacrificing into the Triple S Scheme pleasecontact Super SA, Member Services, telephone 1300 369 315.

State Pension Scheme Under the Superannuation Act 1988, office holders who elect to have a SalarySacrifice component will have their total2 salary before any Salary Sacrificecomponent is deducted recognised for superannuation contribution andbenefit purposes.

Contributions will be based on an office holder’s salary as fixed by theRemuneration Tribunal but paid for out of after tax earnings.

Salary Sacrifice superannuation amounts cannot be paid to the State PensionScheme, but are paid into the Triple S Scheme, or a private complyingsuperannuation fund.

State Lump Sum Scheme Exactly the same as for State Pension Scheme members.

2 subject to the definition of salary for superannuation purposes under the SuperannuationAct, 1988.

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Southern State Superannuation Scheme (Triple S Scheme) Under the Southern State Superannuation Act 1994, office holders who electto Salary Sacrifice will have their employer and elected employeecontributions based on their salary3 as determined by the RemunerationTribunal, from time to time, and determined before any Salary Sacrificecomponent is deducted.

Elected employee contributions will be based on their salary according to theRemuneration Tribunal Determination, but paid for out of after tax earnings.

Office holders who are members of the Triple S Scheme, excluding StatePension and Lump Sum scheme members who have joined for SalarySacrifice purposes, have the option to contribute from after tax salary, by wayof a Salary Sacrifice amount, or a combination of both.

Office holders who are only sacrificing into the Triple S Scheme do not haveto appoint a nominee and only have to pay the Administration Fee payable tothe paying authority, which will administer the Salary Sacrifice Arrangement.

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Please note that a nominee need not be appointed by an office holderwho is only sacrificing into the Triple S Scheme and all references in thisBooklet to a nominee need not concern such an office holder. Thepaying authority will administer the Salary Sacrifice Arrangement ofoffice holders sacrificing solely into the Triple S Scheme withoutinvolving a nominee.

Role of the Nominee The nominee is appointed by the office holder to conduct the administration ofthe office holder’s Salary Sacrifice arrangement.

The office holder shall appoint a member of the panel appointed by the payingauthority for the purpose of the administration of their Salary SacrificeAgreements as their nominee.

The administration of the Salary Sacrifice arrangement will be theresponsibility of the nominee appointed and authorised by the office holder.

It is the responsibility of the office holder to advise the paying authority of theidentity of their nominee for the purpose of Salary Sacrifice.

3 subject to the definition of salary for superannuation purposes under the Southern StateSuperannuation Act, 1994.

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It is the responsibility of the office holder to ensure that adequate qualitycontrol mechanisms are in place and that the nominee has secured adequateinsurance to avoid against any loss by the office holder.

All costs, charges, disbursements, fees or other similar expenses charged bythe nominee associated or connected with the establishment, administration,delivery, and provision of the services pursuant to the Salary Sacrificearrangements will be a cost to be charged to the office holder.

The nominee’s major functions are:

• To be solely responsible for the administration of the Salary Sacrificearrangements and that all disputes regarding the administration of theSalary Sacrifice arrangements for paying authorities will be a matter forand resolved between the office holder and his or her nominee;

• To make distributions and/or transfers of the sacrificed amount towardsSalary Sacrifice benefits;

• To provide reports both to office holders and paying authorities;

• To store all information for audit by the ATO and compliance purposes withregard to the Auditor-General of South Australia and/or the externalauditor; and

• To respond to office holder inquiries relating to their Salary Sacrificearrangements.

The nominee must keep all details regarding any aspect of the sacrificedamounts and the Salary Sacrifice benefits for office holders participating in theSalary Sacrifice Arrangement strictly confidential and accessible only to thoseoffice holders of the nominee responsible for the administration of the SalarySacrifice Arrangement and to the office holder’s paying authority.

Each office holder has the option to ‘restructure’ their Salary Sacrifice benefitsat a predetermined annual review date. The review date is at the anniversaryof the individual’s SSA.

The nominee will, upon written request of the paying authority provide to thepaying authority all books and records associated or related to SalarySacrifice and the Salary Sacrifice arrangement including the Salary Sacrificebenefits selected by the office holder.

This is to ensure on the part of the paying authority that, among other things,all sacrificed amounts that are distributed and/or transferred by the payingauthority to the nominee are subsequently distributed and/or transferred bythe nominee to the intended providers of Salary Sacrifice benefits (referred toin this document as the “recipient”). Documents ordinarily required by thepaying authority would include documentary evidence substantiating payment

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of amounts to recipients. Such documents may be utilised by the payingauthority for internal administration and for the purpose of:

• compliance with relevant taxation legislation and rulings; and

• any audit by the ATO or the Auditor-General of South Australia.

Forms and Information Relevant application forms and information regarding salary sacrifice asapproved by the Remuneration Tribunal will be available from the nomineeappointed by the office holder (see following paragraphs). That is, the officeholder's paying authority will not hold any printed material and all initialcontact is to be made directly to the nominee.

Office holders sacrificing solely into the Triple S Scheme may obtain therelevant forms and information from the contact person in the paying authoritynoted in the Offer (Schedule 1 to the Determination at the paying authority).

The following forms will be able to be down loaded from the South AustralianGovernment Intranet Site, (URL: http://intra.sa.gov.au/index.htm)

• The South Australian Government Salary Sacrifice ArrangementInformation Booklet for office holders (this booklet);

• Service Agreement (sample only);• Salary Sacrifice Agreement and relevant forms; and• Salary Confirmation Form.

List of Approved Nominees Office holders may only appoint their nominee from the list of approvednominees.

The approved nominees are:• Remunerator (Aust.) Pty Ltd.• McMillan Shakespeare Ltd.

Contact Details Remunerator (Aust) Pty Ltd

Address: Level 8 ANZ House13 Grenfell Street GPO Box 2954Adelaide Adelaide SA 5001

Phone for: New customers &/or appointments 1300 130 325

OR Established customer inquiries (03) 9805 5672SA Govt. Customers Relations team 1800 055 522

http://intra.sa.gov.au/index.htm

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Facsimile: (03) 9882 5522

E-mail: Direct to SA Government Customer Relations [email protected]

URL: http://www.remunerator.com.au

To access the part of the Remunerator website specifically tailored for eligible office holders:1. Click on the “Client Area” icon on Remunerator’s home page2. Use the following user name and password:

• User Name: sagov; and Password: benefits.

McMillan Shakespeare Ltd

Address: Level 10, 60 Waymouth StreetAdelaide SA 5001

Phone for: New customers &/or appointments (08) 8407 3555

Facsimile: (08) 8407 3585

Email: Direct to Office Holders Customer Relations Manager:[email protected]

FOR: Established customer inquiries/Account queries 1300 735 363

Facsimile: (03) 9635 0011

URL: www.msa-online.com.au

To access the part of the McMillan Shakespeare website specifically tailored foreligible office holders, log on to above URL web site address and use the followinguser name and password:

• User Name: sagov; and Password: office holders

Approved Services to be Provided by Nominee The office holder’s nominee conducts the day-to-day administration of theoffice holder’s Salary Sacrifice arrangement. Such administration includes:

• Vetting all of the office holder’s documentation associated with the officeholder’s sacrificed amount including Salary Sacrifice benefits selected bythe office holder;

• Arranging with the paying authority for the office holder’s sacrificed amountto be distributed and/or transferred by the paying authority to the providersof Salary Sacrifice benefits;

http://www.remunerator.com.au/

mailto:[email protected]

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• Making all distributions and/or transfers of sacrificed amounts to theproviders of Salary Sacrifice benefits; and

• Maintaining all record keeping functions associated with the office holder’sSalary Sacrifice arrangement, providing accounting data and otherinformation to the paying authority and office holder regarding the SalarySacrifice arrangements and arranging for annual audit of the SalarySacrifice arrangements.

These are the services for which the nominee has been approved byGovernment to provide.

Reports to Office Holder by Nominee It is the responsibility of each office holder participating in Salary Sacrifice tomake separate and private arrangements with the nominee for the receipt ofreports and the regularity of reports detailing information relevant to SalarySacrifice, such as:

• A list of all payments made on behalf of the office holder as part of theSalary Sacrifice arrangement, including the creditor’s name and theamount paid including FBT payments made by the paying authority; and

• The account balance.

Customer Service Standards of Nominee As part of the approval process, nominees were contracted to commit tocertain performance standards. The nominee is the office holder’s legal agentby virtue of the Service Agreement and an office holder has the right to expectan appropriate level of performance. The Service Agreement contains thename and phone number of the nominee’s contact person. In addition, bothnominees have a local (Adelaide) manager.

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Dispute Resolution Process In most cases the administrative arrangements for salary sacrifice will proceedsmoothly. However, in some cases there may be delays or problems in the process.The Dispute Resolution process below is provided to assist the Office Holder andtheir Nominee in resolving such issues expediently. It is not a process fordetermining any actual or opportunity costs or losses of either party.

STEP PROCESS1. Office Holder contacts Nominee ServiceDesk - Free call to dedicated 1800 number.

If enquiry unresolved go to Step 2.

⇓

Nominee’s Service Desk logs receipt of call andissues a job number e.g. SAG #123.

Enquiry resolved – end of process

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2. Office Holder contacts Nominee AccountManager quoting job number.


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Account Manager (AM) notes escalation againstoriginal job number and facilitates response.

Enquiry resolved – end of process

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3. Office Holder follows up with writtencommunication to Nominee AccountManager giving details of enquiry andquoting job number.


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AM notes written communication against original jobNo.

AM acknowledges communication in writing.

Enquiry resolved within agreed timeframe – end ofprocess

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4. Office Holder provides copy of writtencomplaint with supporting documentation toContract Manager (DAIS) and requestsassistance to resolve matter.

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Contract Manager communicates with AM.AM may provide ‘Statement of Fact’ detailingNominee’s actions to CM. Enquiry resolvedwithin agreed timeframe – end of process

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5. Contract Manager issues Notice toManaging Director of the Nominee.

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Enquiry resolved within 5 clear business days or asagreed by the Contract Manager and AM – end ofprocess

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6. Contract Manager continues disputemanagement process in accordance withContract provisions.

Enquiry resolved within 15 clear business days oras agreed by the Contract Manager and AM – endof process.At any stage the Office Holder has the option ofenlisting the assistance of Office of ConsumerBusiness Affairs OCBAAt any stage the Office Holder has the option ofinitiating legal action against the Nominee.

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Contact Details: Contract Manager (DTF, Contract Services)

Address: Level 10, Wakefield House30 Wakefield HouseAdelaide SA 5000

Phone: (08) 8226 5666Facsimile: (08) 8226 5667

Customer Focus Group The nominee will be required to provide information on the nature and numberof problems arising with customers or complaints received from customersregarding the operation of the salary sacrifice arrangements.

In addition, the nominee shall establish and maintain a Customer FocusGroup whose role it will be to liaise with their customers and representativesfor the Government for the purpose of:

(a) receiving, analysing and evaluating feedback on customer servicelevels and standards;

(b) working with the nominee to develop strategies to rectify deficienciesand to develop and implement improvements to customer service andstandards;

(c) encouraging a continuous improvement approach to the operation ofthe salary sacrifice arrangements;

(d) making recommendations to the paying authority for theimplementation of improvements to the salary sacrifice arrangements;and

(e) providing feedback on the effectiveness of implemented improvements.

The Customer Focus Group is to comprise of customers and aGovernment representative and be established within three months ofthe commencement of operations by the nominee.

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Terms and Conditions

The Tribunal’s Determination No. 6 of 2007 sets out the terms and conditionsof the Salary Sacrifice Arrangement for officer holders.

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Methods of Payment It is the responsibility of the office holder to ensure that the nominee paysSalary Sacrifice benefits using:

• Direct bank transfers for those benefits requiring regular payment; or

• Cheque payments or electronic fund transfers for those Salary Sacrificebenefits that are not paid on a regular basis. The nominee must makethese payments directly to the third party or as reimbursement to theemployee.

Costs Incurred Prior to Commencement of Salary Sacrifice • Costs incurred and paid prior to the commencement of Salary Sacrifice

arrangements for any Salary Sacrifice benefits will not be reimbursed bythe nominee.

• The nominee will, however, reimburse costs associated with SalarySacrifice arrangements and incurred but not paid for prior tocommencement of the Salary Sacrifice arrangement.

• The nominee’s fees in respect of the Salary Sacrifice arrangements cannotbe claimed by the participating office holder as a Salary Sacrifice benefititem.

Reimbursement of Payments in Respect to Salary Sacrifice Benefits • Office holder will receive reimbursement for any payments already made in

respect of Salary Sacrifice benefits once there are sufficient sacrificedamounts available to the nominee to reimburse that office holder.

• Office holder may incur the expense and hold their claim back until theyhave accumulated sufficient sacrificed amounts.

• Office holder should notify the nominee of a reimbursement accountnumber, if applicable. This will result in funds being electronicallytransferred to the nominated bank account within 48 hours of the claimbeing received, provided there are sufficient funds available.

Allocating Money to Salary Sacrifice Benefits When deciding to allocate money to a particular Salary Sacrifice benefit, anoffice holder may wish to provide an additional amount to meet any increasesin the cost of that benefit during the term of the Salary Sacrifice arrangement.

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No Funds = No Payment IF, FOR WHATEVER REASON, insufficient funds are held in any officeholder’s account to make a payment, the nominee WILL NOT make any suchpayment.

Note: Payments will not be made until your nominee has reconciledyour individual account.

Annual Reconciliation At the pre-determined annual review date for the SSA, or at the termination ofan Agreement, the nominee will return to the paying authority anyunexpended amount held in the office holder’s account. This could be forbenefits not taken up, for budgeted FBT or a combination of both. Thisamount will then be (income) taxed accordingly by the paying authority.

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Fringe Benefit Tax Reporting Requirements If the total taxable value of the fringe benefits provided as part of the salarysacrifice during a FBT year (1 April to 31 March) exceeds $1,000.00, thegrossed-up value of those benefits will be recorded on your paymentsummary for the corresponding income year (1 July to 30 June). Other fringebenefits that the paying authority may provide also appear on the groupcertificate. This reporting requirement applies not only to paying authoritiesthat are liable to pay FBT, but also applies to office holders of PBIs.

The amount reported on your group certificate will not be included in yourassessable (or taxable) income and it will not affect the amount of standardMedicare levy you pay. However, it will be used for the following incometests:• Medicare levy surcharge;• Deduction for personal superannuation contributions;• Rebate for personal superannuation contributions;• Rebate for contributions to spouse’s superannuation;• Superannuation surcharge;• HECS repayment;• Child support obligations;• Entitlement to certain income tested government benefits; and• income tax rebates.

99.. SSAALLAARRYY SSAACCRRIIFFIICCEE:: AAPPPPRROOVVEEDD BBEENNEEFFIITTSS

Appendix A, on page 24 of this Information Booklet describes the range ofSalary Sacrifice approved benefits available to office holders participating in

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the Salary Sacrifice Arrangement, their costing methods and thesubstantiation requirements for each optional salary based non-cash benefit.

Note: Participating office holders are strongly recommended to seektheir own independent financial advice with regard to theirdecision as to whether to Salary Sacrifice and their SalarySacrifice arrangements. It is the sole responsibility ofparticipating office holders to seek and obtain such advice and itis not a matter which has anything to do with the paying authority.

• The three broad types of Salary Sacrifice approved benefits available tooffice holders to incorporate into their Salary Sacrifice arrangement are asdetailed below in

• Category A: Benefits that are exempt from FBT for all office holders;• Category B Benefits that attract no FBT if the office holder could have

claimed an income tax reduction; and• Category C Benefits subject to FBT

The paying authority and the office holder’s nominee will require the officeholder to provide documentary evidence substantiating that the office holderwill properly claim a Salary Sacrifice benefit. The paying authority willproperly distribute and/or transfer sacrificed amounts to the nominee fortransferal and/or distribution to providers of Salary Sacrifice approved benefitsselected by the office holder in their Salary Sacrifice arrangement.

The costing method and the documentary material substantiating the properclaim and application of amounts to be transferred in respect of the range ofoptional Salary Sacrifice benefits are detailed in Appendix A, which is on page24 of this Information Booklet:

Category A• Contributions to a private superannuation fund that is complying, in that, it

complies with all the laws regulating superannuation, or the Southern StateSuperannuation Scheme (the Triple S scheme) pursuant to the Southern StateSuperannuation Act, 1994

• 1 notebook/lap top computer per year

• Briefcase

• Electronic diary

• Calculator

• Business software

• Electronic diary

• Taxi travel to and from work

• Staff fitness/gym facility (in-house)

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Category BNo FBT if employee could have claimed an income tax deduction

• Membership fees and subscriptions to professional associations

• Home office expenses

• Financial counselling fees

• .Disability/income protection insurance premiums

• Self education expenses

Category CSubject to FBT

• Own home mortgage payments

• Personal loan servicing from Registered Financial Institutions

• Private home rental

• School fees including HECS payments

• Private travel

• Trauma/life insurance premiums

• Childcare expenses by a registered provider

• Aged or disabled care expenses by a registered provider

• Private health insurance contributions

• Own motor vehicle through a novated lease

• Household utilities (gas and electricity expenses)

• Household rates (water and local council rates expenses)

Car Parking – taxation may vary in accordance with ATO rules

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Contributions to Complying Private Superannuation Fund Note: The paying authority may be required by the nominee to certify for

the superannuation fund, details regarding the pre-tax nature ofthe contribution. In which case the nominee will provide thenecessary form or this form may be specific to the fund itself.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of contributionsmade or to be made toward the private superannuationfund, and any additional tax charges.

Substantiation: The fund must be a superannuation fund that complieswith the Commonwealth superannuation laws. For fundsmanaged by banks or insurance companies the provisionof the fund name and plan number or policy number and,where it is an existing policy, a copy of a recent statementis sufficient.

For DIY funds the office holder must provide a copy of theFund Manager’s Application to become a Regulated Fundand details of the fund bank account into which thepayments are to be made.

1100.. WWHHEERREE TTOO FFRROOMM HHEERREE

-ESTABLISHING A SALARY SACRIFICE ARRANGEMENT (EXCEPT WHERE AN OFFICE HOLDERS’ SALARY SACRIFICE ARRANGEMENT ONLY INVOLVES SACRIFICE OF SALARY INTO THE TRIPLE S SCHEME) An office holder wishing to establish a salary sacrifice arrangement for otherthan sacrifice into the Triple S Scheme only must enter into a ServiceAgreement with a Panel Member (“the Nominee”). An offer in the form set outin Schedule 1 of the Remuneration Tribunal’s Determination on SalarySacrifice is to be duly completed and signed by the office holder andforwarded to the Paying Authority, together with a copy of the ServiceAgreement made between the office holder and the Nominee.

The offer is to be checked by the Paying Authority and if acceptable, thePaying Authority must sign and formally issue the offer to the office holder,and notify the Nominee and the office holder in writing accordingly.

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An Authorised Signatory may sign an offer on behalf of the Paying Authority.

An office holder may accept an offer by completing, signing and returning tothe Paying Authority an Acceptance as set out in Schedule 2 of theRemuneration Tribunal’s Determination on Salary Sacrifice and providing asigned copy of the Acceptance to the Nominee.

The issue of an offer, and the making of an Acceptance, in accordance withthis clause operates to establish a Salary Sacrifice Arrangement on the termsand conditions set out by the Remuneration Tribunal in its Determination onSalary Sacrifice made on the 17th day of July 2007.

-ESTABLISHING A SALARY SACRIFICE ARRANGEMENT WHERE AN OFFICE HOLDERS’ SALARY SACRIFICE ARRANGEMENT ONLY INVOLVES SACRIFICE OF SALARY INTO THE TRIPLE S SCHEME

An office holder wishing to establish a salary sacrifice arrangement forsacrifice of salary only into the Triple S Scheme is to duly complete and signan offer in the form set out in Schedule 1 of the Remuneration Tribunal’sDetermination on Salary Sacrifice and forward it to the Paying Authority.

The offer is to be checked by the Paying Authority, and if acceptable thePaying Authority must sign and formally issue the offer to the office holder inwriting accordingly.

An Authorised Signatory may sign an offer on behalf of the Paying Authority.

An office holder may accept an offer by completing, signing and returning tothe Paying Authority an Acceptance in the form set out in Schedule 2 of theRemuneration Tribunal’s Determination on Salary Sacrifice.

The issue of an offer, and the making of an Acceptance, in accordance withthis clause operates to establish a Salary Sacrifice Arrangement on the termsand conditions set out in the Remuneration Tribunal’s Determination on SalarySacrifice made on the 17th of July 2007.

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APPENDIX A - BENEFITS

CONTENTS –

DESCRIPTION OF BENEFIT ITEMS

A1 Additional Superannuation ContributionsA2 Home Office ExpensesA3 Membership Fees and Subscriptions to Professional AssociationsA4 Financial Counselling FeesA5 Disability/Income Protection Insurance PremiumsA6 Self Education ExpensesA7 Own Home Mortgage PaymentsA8 Personal Loan Servicing from Registered Financial InstitutionsA9 Private Home RentalA10 School Fees Including Higher Education Contribution Scheme PaymentsA11 Private TravelA12 Trauma/Life Insurance PremiumsA13 Childcare Expenses by a Registered ProviderA14 Aged or Disabled Care ExpensesA15 Private health Insurance ContributionsA16 Own Vehicle through a Novated LeaseA17 Household Utilities [Gas and Electricity Expenses]A18 Household Rates [Water and Local Council Rates Expenses]A19 Car ParkingA20 Taxi Travel to and from WorkA21 Staff Fitness/Gym Facility (in-house)

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DESCRIPTION OF BENEFIT ITEMS

A1 Additional Superannuation

Contributions

Note: Office Holders to note that direct Superannuation contributions

to the Triple S Scheme may be made without the use of anominee.

If you are considering salary sacrificing to superannuation you shouldconsider the following:

• The contributions are not considered part of your taxable income soyour Pay As You Go (PAYG) tax is reduced;

• Contributions are credited to your paying authority Account and, inmost circumstances, the contributions will be taxed when you withdrawfrom the scheme; and

• Contributions are preserved until you reach the age of 55 or prior deathor permanent disability.

Super SA Salary Sacrificed amounts are acceptable by Super SA from State Pension,Lump Sum and Triple S Scheme members.

However, all salary sacrificed amounts will be for payment into the TripleS Scheme only.

It is also important to note that office holder contributions required to be paidinto the State Pension and Lump Sum schemes cannot be directed to theseschemes by way of Salary Sacrifice Contributions to be paid to either of theseschemes, but must continue to be deducted from after tax income.

Eligible earnings used for the purpose of calculating paying authority andelected office holder contributions are calculated before any salary sacrificecomponent is deducted. For example, a member with a salary of $50,000

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who elects to salary sacrifice 50% will have a taxable income of $25,000 butthe paying authority contribution will be 9% of the eligible earnings (9% x$50,000 = $4,500).

If you contribute 4.5% or more from your after tax salary, you get an extra 1%paying authority contribution in Triple S (employer rate increases from 9% to10%). This does not apply to salary sacrifice contributions, as these are notafter tax office holder contributions.

The following brief overview of the superannuation implications to officeholders, and other employees3 who elect to Salary Sacrifice has beenprovided by Super SA. Any office holder wishing to discuss their ownpersonal situation in more detail or for any further information please contactSuper SA, Member Services, telephone 1300 369 315.

Complying Superannuation Funds

Complying superannuation fund contributions may be selected as a SalarySacrifice benefit. This can include contributions into funds on behalf ofassociates (e.g. immediate family members), however contributions to anassociate's fund are liable for Fringe Benefits Tax. Contributions must be paidinto a complying fund. Generally superannuation funds offered by banks andinsurance companies are “complying” funds but it is the responsibility of the

office holder to ensure that such is the case. If you have a DIYsuperannuation fund you must provide a copy of the fund manager’sApplication to become a Regulated Fund.

Contribution payments of a pre-tax nature to complying superannuation funds(including salary sacrifice) incur a tax of fifteen per cent (15%) on thecontributions paid. The tax is paid to the Australian Taxation Office by thenominated superannuation fund.

A superannuation surcharge tax in respect of surchargeable superannuationcontributions may also be payable. Again, office holders are stronglyrecommended to seek appropriate, independent advice as regards the impactof the surcharge.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of contributions

3 subject to the definition of employees for superannuation purposes under theSuperannuation Act, 1988, and subject to the definition of member under the Southern StateSuperannuation Act, 1994.

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made or to be made toward the complyingsuperannuation fund, and any additional tax charges.

Substantiation: The fund must be a superannuation fund that complieswith the Commonwealth superannuation laws. For fundsmanaged by banks or insurance companies the provisionof the fund name and plan number or policy number and,where it is an existing policy, a copy of a recent statementis sufficient.

For DIY funds the office holder must provide a copy of theATO certification that it is a Regulated Fund and details ofthe fund bank account into which the payments are to bemade.

Taxation: FBT– Exempt (except where contributions are made onbehalf of an associate e.g. the office holder’s immediatefamily members), GST/ITC— Exempt.

Note: The paying authority may be required by the nominee to certify forthe superannuation fund, details regarding the pre-tax nature ofthe contribution. In which case the nominee will provide thenecessary form or this form may be specific to the fund itself.

A2 Home Office Expenses Office holders may elect to have the cost of home office expenses deductedfrom their Salary Sacrifice arrangement. Normally FBT “exempt” benefitsinclude notebook/laptop computer, briefcase, electronic diary and calculator,business software and newspapers and periodicals which are used by theemployee for work related purposes.

Provided the Salary Sacrifice benefit gives rise to a once-only income taxdeduction to the office holder such as home office equipment, office furnitureor expenditure on consumables such as stationery, these items are ’otherwisedeductible’. Expenses which are subject to depreciation (e.g. where the assetexceeds $300) are not “otherwise deductible”. Home office facilities which areleased by the office holder are, in normal circumstances, also able to beincluded in a Salary Sacrifice arrangement provided one hundred (100%) percent of the business use can be substantiated. Examples of home office

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facilities which may be leased include such benefit items as desk topcomputers, and communications equipment. These benefit items may be“otherwise deductible” for income tax purposes. Items such as heating,

lighting and telephone call costs cannot be included as Home OfficeExpenses in a Salary Sacrifice arrangement but Gas and Electricity expensesmay be salary sacrificed under A17.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of the homeoffice expense, and any associated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claimform substantiating the business use expense that is tobe or was incurred or details for regular payments. If theexpense is used for business use, it might be “otherwisedeductible” for FBT purposes. This reduces the FBTliability for the portion that would have been taxdeductible if you had incurred the expense. An officeholder declaration may be required to substantiate thebusiness use where it is not 100%.

Taxation: Not all home office expenditures incur GST or FBT.Treatment of GST/FBT status, ITC entitlement and gross-up factor is subject to ATO rules. The appropriate FBTGross-up factor to be applied accordingly.

A3 Membership Fees and

Subscriptions to Professional

Associations These items must be strictly work-related.

A professional association is defined as an organisation, the sole purpose ofwhich is the enhancement of the interests of the members of a particularprofession, trade or occupation.

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Similarly, subscriptions to professional journals and publication that aredirectly related to employment may be deducted from the total Salary Sacrificearrangement.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of themembership or subscription to the professionalassociation and the subscription to the professionaljournal or publication, and any associated FBT.

Substantiation: The nominee must obtain from the office holder theinvoice or receipt for each expense to be reimbursed anddetails for regular payments and a completed expensepayment claim form substantiating each expense that isto be or was incurred.

Taxation: GST included, no FBT payable.

A4 Financial Counselling Fees If an office holder seeks financial counselling in order to Salary Sacrifice thenthe cost incurred may be deducted from the Salary Sacrifice arrangement.Again, substantiation through an expense payment claim form and originalinvoices or receipts for the expense payment incurred must be provided to thenominee.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of the financialcounselling fees, and any associated FBT.

Substantiation: The nominee must obtain from the employee the originalinvoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim ordetails for regular payments.An office holder declaration will be required in order tosubstantiate the FBT reduction under the “otherwisedeductible” rule.

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Taxation: GST included, no FBT payable (if “otherwise deductible”).

A5 Disability/Income Protection

Insurance Premiums

This must be an insurance policy against loss of earnings as a result ofsickness or accident and accordingly the premium payable would generally bedeductible for normal income tax purposes.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of thedisability/income protection insurance policy, and anyassociated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim ordetails for regular payments. An office holder declarationwill be required in order to substantiate the FBT reductionunder the “otherwise deductible” rule.

Taxation: GST included, no FBT payable (if “otherwise deductible”).

A6 Self Education Expenses Where expenses, for example, course or tuition fees, text books, technicalinstruments and equipment, are incurred by an office holder attending acourse at an educational institution or a work-related conference or similarand the self-education is directly relevant to the activities by which the officeholder currently derives assessable income, or is likely to lead to an increasein income from those activities, the relevant expenses are normally allowableas an income tax deduction. However, where the relevant expense is subjectto a depreciation claim for income tax purposes, the “otherwise deductible”rule does not apply.

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Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of the courseexpenses and tuition fees, and any associated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim. Anoffice holder declaration will be required in order tosubstantiate the FBT reduction under the “otherwisedeductible” rule.

Taxation: Not all self education expenditure incur GST or FBT.Treatment of GST/FBT status, ITC entitlement and gross-up factor is subject to ATO rules. The appropriate FBTGross-up factor to be applied accordingly.

A7 Own Home Mortgage Payments

Office holders may select a housing mortgage payment as a Salary Sacrificebenefit for any owner occupied non-income producing property, which is theprincipal place of residence of the office holder.

It is not necessary that the office holder be the sole party to a housingmortgage agreement.

In the case of a privately arranged mortgage, i.e. not one through a registeredfinancial institution, the following has to be provided for substantiation. Aformal contract or arrangement must be in place in relation to the mortgage.Notwithstanding any special arrangements, the interest rate which is chargedmust be commercial. The funds which are the subject of the mortgage haveto have actually changed hands and to have been used for the purposes ofpurchasing a house, to be occupied as per the above definition. In summary,appropriate documentation has to be in place to substantiate a propercommercial arrangement and not one put in place simply for the purposes ofthe salary sacrifice arrangement.

Where an office holder has a mortgage arrangement whereby an office holdermay access any credit in an account, as a result of the office holder increasingthe level of the loan repayments, then the office holder will be required to sign

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a declaration to the effect that any such credit that may be subsequently adraw-down will not be used to provide cash for general unsubstantiatedexpenses.

Many financial institutions offer products where an office holder can withdrawadditional funds against existing equity in the home. There is legitimate salarysacrifice where funds are being expended for the purposes of mortgagerepayments. If the office holder resorts to the redraw facility in order towithdraw money for expenditure for other purposes, he/she is drawing on thecredit facility, not against the salary sacrificed amount. If evidence came tolight that a redraw facility were being used as a facade or sham in order tohave a salary sacrifice arrangement, then the paying authority or nomineewould be obliged to terminate the salary sacrifice arrangement. Salarysacrifice is thus permissible with such products in legitimate circumstances.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of the mortgagepayment, and any associated FBT.

Substantiation: The nominee must obtain from the office holder details ofthe loan account into which housing mortgage paymentsare made and either a copy of the mortgage agreementor a recent statement for the loan account, or othersubstantiation as required above.

Taxation: No GST is included, FBT is payable.

A8 Personal Loan Servicing from

Registered Financial Institutions

Office holders may select personal loan servicing from registered financialinstitutions as a Salary Sacrifice benefit.

The loan may be in the joint names of the office holder and spouse, solely inthe name of the office holder or solely in the name of the spouse.

Where an office holder has a loan account whereby an office holder mayaccess any credit in an account, as a result of the office holder increasing thelevel of the loan repayments, then the office holder will be required to sign a

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declaration to the effect that any such credit that may be subsequently a draw-down will not be used to provide cash for a general unsubstantiatedexpenses.

The repayment of both principal and interest on the loan is allowable. Goodsacquired under a Hire Purchase cannot be included within the Salary Sacrificearrangement.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual cost of the loanpayment, and any associated FBT.

Substantiation: The nominee must obtain from the office holder details ofthe loan account into which personal loan payments aremade including a copy of the loan contract and a recentpersonal loan statement.

Taxation: No GST is included. FBT is payable unless the otherwisedeductible rule applies (the loan needs to be used for thepurpose of producing assessable income and eithersolely in the name of the office holder or jointly with thespouse).

A9 Private Home Rental

Payments made to a real estate agent or landlord under a formal arrangement(Residential Tenancy Agreement) for the provision of private on-going homerental accommodation, which is the office holder’s principal place of residenceat the time, may be taken as a Salary Sacrifice benefit.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is the actual amount of the rentalpayment/s, and any associated FBT.

Substantiation: The nominee must obtain from the office holder a copy ofthe Residential Tenancy Agreement.


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A10 School Fees Including Higher

Education Contribution

Scheme Payments

Payments may be made as a Salary Sacrifice benefit for defined expensesincurred for the education of a dependent family member at a preschool or ata primary, secondary or tertiary school, college or institution.

Defined expenses include term tuition fees, music fees, sporting fees andother fixed charges or levies. Expenses such as the following can not beincluded: uniforms; books; sporting equipment; accommodation; trips orcamps, which are not directly related to academic tuition.

In addition, this Salary Sacrifice benefit does not extend to payments toeducation funds or similar savings schemes that allow for the accrual ofmonies in preparation for educational expenses.

The payment of a Higher Education Contribution Scheme liability for the officeholder or for a dependent member of the office holder’s family may beincluded in this benefit. The payment toward a HECS liability may only bedone as twice yearly lump sum amounts.

Costing: The cost of the Salary Sacrifice benefit is the actual costincurred for educational expenses or HECS liability, andany associated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim ordetails for regular payments.


A11 Private Travel Office holders may elect to choose private travel as a Salary Sacrifice benefit.Payments may be made to a third party for private travel expenses incurred

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for the office holder and the office holder’s partner and dependent familymembers.

This Salary Sacrifice benefit would include such expenses as airfares,accommodation and car hire or the cost of a pre-purchased travel package. Itdoes not include expenditure on meals or entertainment or excursions at theholiday destination unless these form part of the pre-purchased travelpackage.

This benefit does not cover day to day travel, such as commuting from hometo office using public transport.

Costing: The cost of this Salary Sacrifice benefit is the actual costincurred for private travel expenses, as defined, and anyassociated FBT.


Taxation: Australia: GST is included, FBT is payable.Overseas: No GST is included, FBT is payable.

A12 Trauma/Life Insurance

Premiums

Payment of trauma and life insurance premiums may be elected as a SalarySacrifice benefit. This can include policies held by immediate familymembers.

Payments will only be made to recognised life insurance companies. Forthose life insurance premiums that contain an investment component, thepolicy must contain a life insurance component and the investmentcomponent of the premium must be bona fide directed towards a long-terminvestment strategy.

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Costing: The cost of this Salary Sacrifice benefit is the actual costincurred for premiums and a slight margin for possibleincreases, and any associated FBT.



A13 Childcare Expenses by a

Registered Provider

An office holder may choose expenses in respect of non-employer providedchildcare services.

The expense must be related to service provided by a registered child care

provider.

Costing: The cost of this Salary Sacrifice benefit is the actual costincurred for childcare services provided for by aregistered child care provider, and any associated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim ordetails for regular payments. The registered providernumber must be provided.

Taxation: No GST is payable, FBT is payable.

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A14 Aged or Disabled Care Expenses

Office holders may choose aged or disabled care expenses as a SalarySacrifice benefit.

This Salary Sacrifice benefit is designed for payments to recognised public or

private sector providers of support, accommodation, health, or welfareservices and not to other family members or friends.

The services may be provided in the person’s home or in an external facility.

Costing: The cost of this Salary Sacrifice benefit is the actual costincurred for aged or disabled care expenses supplied forby a recognised provider, and any associated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice and/or receipt for each expense to be paidor reimbursed and a completed expense payment claimor details for regular payments. The registered providernumber must be provided.


A15 Private Health Insurance

Contributions

Payment of private health insurance premiums to provide cover for the officeholder and partner and his or her dependents may be elected as a SalarySacrifice benefit. Payments will only be made to recognised health insurancecompanies. Office holders may join a fund, stay in an existing fund, or top uptheir cover.

It is usual for insurance rates to increase during a financial year, therefore itmay be advisable that more of the total Salary Sacrifice arrangement isallocated to this item at the beginning of a financial year to cover anyincrease.

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Costing: The cost of this Salary Sacrifice benefit is the actual costincurred for premiums and a slight margin for possibleincreases, and any associated FBT.



A16 Own Motor Vehicle through a

Novated Lease

Office holders may choose to acquire a motor vehicle through a novatedlease. The motor vehicle must be either a new *Australian made orassembled passenger vehicle or a second-hand motor vehicle, acquiredbelow the current prevailing luxury car limit set by the Income TaxAssessment Act 1936.

*However, an exemption to this requirement for new vehicles is allowed in theevent that a particular class of passenger vehicle is not made or assembled inAustralia eg small 4 cylinder passenger vehicles; people movers.

Payment may be made pursuant to a formal arrangement for the provision ofa privately owned motor vehicle as a Salary Sacrifice benefit. All operatingexpenses such as fuel, insurance, registration and servicing can be includedin the Salary Sacrifice benefit, at the discretion of the office holder, and leasepayments are also regarded as a running cost.

The SA Government has specified one, generic Deed of Novation. This willbe available on the SA Government Intranet or from the nominee, and is theonly accepted agreement.

Costing: The cost of the Salary Sacrifice benefit in the SalarySacrifice arrangement is set according to a formula, beinga percentage of the initial cost of the motor vehicle varied

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according to the number of kilometres travelled eachyear, and any associated FBT

Substantiation: The nominee must obtain from the office holder a copy ofthe Finance Lease Agreement.

Taxation: GST is included, FBT is payable.

Note: A critical issue in undertaking a novated lease of a vehicle is toachieve the estimated usage target – i.e. the kilometres per FBTyear – that is set within the salary package, at its commencement.Under-achievement of this target can have a very adversefinancial impact on an individual, given the office holder isresponsible for any extra FBT generated.

For example, estimating 26,000 km usage and the requisite FBTon this basis, and actually driving only 19,000 km will result in aneffective doubling of the FBT liability, for which the office holderis responsible.

Where the actual FBT liability exceeds that estimated the officeholder is personally responsible for any excess at 1 April of anyyear. Typically the office holder will be required to pay the FBTusually by 28 April and no later than 28 May for a given year. Theemployer has the legal right under the Salary Sacrifice Agreementto recover this (eg from the office holder’s pay), and would needto do this in time to lodge that return.

It is imperative that the office holder, and their nominee, take thisinto account when framing the salary package.

A17 Household Utilities Payment of Household Utilities i.e. Gas and Electricity Expenses may beelected as a Salary Sacrifice benefit.

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Costing: The cost of the Salary Sacrifice benefit will be the actualcost of Gas and/or Electricity expenses and anyassociated FBT.

Substantiation: The nominee must obtain from the office holder theoriginal invoice or receipt for each expense to be paid orreimbursed and a completed expense payment claim.

Taxation: GST included, FBT is payable

A18 Household Rates

Payment of Household Rates i.e. Water or Local Council Rates may beelected as a Salary Sacrifice benefit.

Costing: The cost of the Salary Sacrifice benefit will be the actualcost of Water or Local Council Rates expenses and anyassociated FBT.


Taxation: No GST is included, FBT payable

A19 Car Parking

Office holders may elect to choose Car Parking as a Salary Sacrifice benefit.

This benefit is available only where the car parking facility is owned or leasedby the Employer. It is not available on a re-imbursement basis for casualparking or office holder leases.

The ATO sets a number of conditions, which determine if provision of carparking facilities will be subject to FBT. FBT will generally apply where thecar is parked in aggregate for more than 4 hours between 7 am and 7 pm on aday, and where the car park is within 1 km radius from a commercial carparking station that charges more than the car parking threshold rate set bythe ATO.

However, where the employer is a PBI, car parking is exempt from FBT.

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Office holders electing Car Parking as a Salary Sacrifice benefit shouldprovide the Nominee with details of their particular circumstances so that theappropriate benefit amount including any FBT can be determined.

Costing: The cost of the Salary Sacrifice benefit will be the actualcost incurred for the car parking expense and anyassociated FBT.


Taxation: GST included. FBT exempt for a PBI; FBT generallyapplies for non-PBI.

A20 Taxi Travel to and from Work

Office holders may elect to choose Taxi Travel to and from Work as a SalarySacrifice benefit. In order to be FBT exempt the travel must be a single taxitrip beginning or ending at the office holder’s place of work. For example, ifan office holder travels by taxi from work to a sporting event and then, whenthe event is over, by taxi home, only the fare from work to the sporting eventwould be an exempt benefit and able to be included in the salary sacrificearrangement.

Costing: The cost of the Salary Sacrifice benefit will be the actualcost incurred for any taxi travel and any associated FBT.


Taxation: GST included, no FBT payable.

A21 Staff Fitness/Gym Facility

(In House) Office holders may elect payment of subscriptions for an employer-providedStaff Fitness/Gym facility located on the business premises of the employer asa Salary Sacrifice benefit.

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Costing: The cost of the Salary Sacrifice benefit will be the actualcost incurred for any subscription and any associatedFBT.

Substantiation: The benefit cannot be in the form of a reimbursement.The nominee must obtain from the office holder theoriginal invoice or details for regular payments.

Taxation: GST included, FBT is payable unless the ATO conditionsfor exemption are satisfied.

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