Australia: Fringe benefits change and tax offsets

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The government of Australia has changed the way fringe benefits will be treated for the calculation of several tax offsets from 1 July 2017. The meaning of adjusted fringe benefits total has been modified so that the gross rather than the adjusted net value of reportable fringe benefits are used. Adjusted fringe benefits total is used to calculate a taxpayer’s entitlement for the low income superannuation tax offset, the seniors and pensioners tax offset, the net medical expenses tax offset and the dependent tax offsets.

Fringe benefits received by individuals working for registered public benevolent institutions, registered health promotion charities, some hospitals and public ambulance services will not be affected by this change. This aligns the treatment for tax offsets to the treatment for the income tests for family assistance and youth payments, as detailed in the 2015–16 Mid-Year Economic and Fiscal Outlook.

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