Exempt benefits and fringe benefits

Benefits of eligible ministers paid by the church are exempt benefits under the Fringe Benefits Tax Assessment Act 1986 if certain criteria are met.

Refer to the taxation ruling for further details. Also, refer to the Salary Packaging section of the Church Treasurer’s Handbook.

Examples of such benefits include but are not limited to:

  • Education costs for ministers and their family
  • Health costs for ministers and their family
  • Provision of a manse
  • Utilities
  • Mortgage repayments
  • Insurance costs

Although a limit is not stipulated, the Association recommends that churches generally allow up to 50% of the minister’s stipend and motor vehicle allowance to be paid as fringe benefits; we need to ensure that the fringe benefit exemptions given to religious institutions by the Government is not abused.

Record keeping
It is important that the church keeps record and supporting documentation e.g. invoices supporting exempt benefits paid to eligible ministers.

GST on fringe benefits
Churches that are registered for GST can claim back the GST on fringe benefits provided that supporting documentation e.g. invoices are kept.

Social Security and Exempt Benefits
The gross income of a minister of religion is assessed as income under the income test. The definition of income includes ‘valuable consideration’ such as fringe benefits. Refer to the Department of Social Services website for further details.

If you have any queries in relation the ACNC, please contact the Finance Team.

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