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Defence Health

ADF Family Health

Conditions of Use - Fringe Benefits Tax

The benefits associated with The National ADF Family Health Program (the Program) are considered fringe benefits under the Fringe Benefits Tax Assessment Act 1986. The benefits will be subject to Fringe Benefits Tax (FBT) and payment summary reporting as part of a members Reportable Fringe Benefits Amount (RFBA). There are some important facts to remember;

  • Defence pays the fringe Benefits Tax (FBT), not the ADF member;
  • It is not until the ADF members total reportable Fringe Benefits reach $2,000 that they are grossed up and reported on the ADF members Payment Summary at the end of the Financial Year;
  • Fringe Benefits reported on your Payment Summary do not affect your Taxable Income - you do not pay more Income Tax;
  • Reported Fringe Benefits may affect your Assessable Income that Commonwealth Government agencies may use to calculate various means tested allowances, benefits and levies (such as Child Care Benefit, Child Support payments etc).

Please refer to the ADFFH FBT Fact Sheet (PDF) for more information.

Payment Summary Reporting:

If a member receives over $2,000 in reportable Fringe Benefits per FBT year (between 1 April to 31 March) from Defence, Defence is required to report the grossed-up Fringe Benefits amount on your annual payment summary. The amount on your payment summary is called a Reportable Fringe Benefits Amount (RFBA).

Example: if a member receives $2,001 worth of Reportable Fringe Benefits, Defence will pay $1,739 FBT to the Australian Tax Office and will report $3,740 on the ADF members' payment summary.

The $3,740 is calculated by multiplying $2,001 by a gross-up rate of 1.8692. The $3,740 is the RFBA that will be reported on the members payment summary.

As mentioned above, an RFBA on a member's payment summary may impact the member's entitlement to various income-tested Government benefits and liability for obligations such as:

  • Family Tax Benefit;
  • Higher Education Loan Program repayments;
  • Child Support payments; and
  • Child Care benefit.

As per existing reportable Fringe Benefits requirements, a record of visits will be maintained by ADF Family Health. This record will indicate that a reportable Fringe Benefit was received, the value of the benefit, the dependant that utilised the benefit and the date of the benefit. This information will be available through PMKeyS Self Service at the end of the FBT year.

Dependants registered for the Program, but not utilising the benefits associated with the Program, will not incur any Fringe Benefit.

More detail on Fringe Benefits Tax in Defence can be found in the ADF Pay and Conditions Manual (PACMAN):
http://www.defence.gov.au/dpe/pac/PACMATE_Pt3_Div2.htm

Dependants may only be registered by one ADF member, any fringe benefits may be recorded against that members annual Payment Summary. Information to be recorded on each members annual Payment Summary may be viewed through the ADF members PMKeyS Self Service.

If you have any questions related to Fringe Benefits, please contact the Defence Tax Management Office taxation.management@defence.gov.au or Phone: 1800 806 053.

Examples of how fringe benefits tax may affect you can be found below:

How Fringe Benefit Tax may affect you:

Example 1: An ADF family with a member and a spouse and two children.

  • The spouse and two children each access the Allied Health services under the program up to the limit of $400 and have five (5) medical consultations within 12 months from 1 April to 31 March the following year each with a reimbursed 'gap' of $26.
  • The taxable value of the allied health services: 3 X $400 = $1,200
  • The taxable value of the medical services: 3 X 5 X $26 = $390
  • The total taxable value of the AD Family Health services for the ADF member for a year: $1,590

If the member does not receive any other Defence provided reportable Fringe Benefits during the year, this ADF Family Health benefit will not be reported on the member's payment summary as the total taxable value is below the payment summary reporting threshold of $2,000.

Example 2: An ADF family with a member and a spouse and 5 children.

  • The spouse and all children each access allied health services under the program up to the cap of $400 and have five (5) medical consultations within 12 months from 1 April to 31 March the following year each with a reimbursed 'gap' of $26.
  • The taxable value of the allied health services: 6 X $400 = $2,400
  • The taxable value of the medical services: 6 X 5 X $26 = $780
  • The total taxable value of the ADF Family Health services for the ADF member for a year: $3,180.

The taxable value of the ADF Family Health services will be reported on the member's payment summary as the total taxable value is greater than the payment summary reporting threshold of $2,000. Tax law requires this to be 'grossed-up' by 1.8692 resulting in $5,944 to be included in the RFBA on the member's payment summary.

Note: ADF Family Health benefit amounts are added to other Reportable Fringe Benefit amounts to determine if the reportable threshold ($2,000) is exceeded.

Seeking Financial Advice

As each financial situation is different, we recommend that you seek financial advice related to your specific circumstances before registering for the Program.

To find out more about FBT, the following resources are available:

Only those claims that are submitted for reimbursement will be subject to Fringe Benefit Tax. Participation in the Program is voluntary and you may elect to cancel participation at anytime.