FBT: Medical Related Benefits

Paul discusses medical related benefits such as medical counseling for employees and associates, section 58M exemption, health care, COVID tests and quarantine cost.

Date published: 21 April 2022

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TRANSCRIPT

Flu Jabs, Counselling and Quarantine Costs

Counselling

With work related counselling, the FBT exemption applies for counselling provided to employees but also associates. And that kind of makes sense because if I'm going a bit ratty while I'm locked away in Covid times, there's a pretty good chance that Barbara's going to be under stress too.

So it's kind of nice from Hockridge advisories perspective to take a holistic view and say we need a counsellor to talk to Paul that there's a bit of Barbara too or really isn't going to solve the problem. But the problem is Barbara's got to be with me when she's being counselled otherwise, there's no FBT exemption. And there might be some confidentiality issues there because because maybe she'd really like to vent and maybe I'd prefer not to hear it.

But but it's just one of the peculiarities under the counselling room. 

Flu Jabs

Now, the reason I mentioned that is then when you get a flu jab, you say, would the cost be otherwise deductible? And the answer is, well, no, it wouldn't because it's a it's a health issue, not a work issue. And then you say, is it a benefit? Well, yeah, getting a jab, it falls within the definition of benefit provided to an employee, yep. To associates, yep. Maybe provided to associates. What takes us out of the preventative health care and the answer is with the preventative health care test that applies to employees, not to associates. And then you say, well, with the that's with the jab, what about the RATS test? Because is at preventing or is it just testing to see whether we've got COVID or not? Now, as you imagine for all sorts of policy reasons let alone the fact that governments don't want to alienate the population too much where work is picking up the cost of a jab or a RATS test, there's a pretty good chance that they want the cost to be deductible to the employer and they should be no FBT on COVID jabs and RATS test whether it's the employee or a family member of the the employee. And that's why we need this change in legislation to take it a whole lot further than the bulk of the old legislation. 

COVID Quarantine Costs

First people might think, why is this an issue? And the answer is, if I'm quarantining at home, those costs are going to be private or domestic. But let's say I've travelled up to Sydney because I've got a conference and I come down with COVID. If I'm, if I have to isolate while I'm up in Sydney, it's another cost of traveling and then therefore that cost, if it's paid for by Hockridge advisory, won't be subject to FBT because it will be otherwise deductible.

That is, had I incurred the cost of not being reimbursed or had package advisory not paid, it would have been deductible to me as a cost incurred while traveling. If the employer wants to help the employee out of the goodness of their heart, either more salary subject to PAYG reimburse costs perhaps subject to FBT because it's unlikely that those costs would have been otherwise deductible to the employee. 

What's 'Otherwise Deductible' Again?

And I've mentioned this otherwise deductible. One of the one of the tests typically is when we go to each of the divisions of the FBT legislation that says he has a sort of benefit is it is then we go to the valuation rules, and very often with the valuation rules, we get down to to the extent to which it would have been deductible to the employee had they incurred the cost and not being reimbursed in the taxable value for FBT purposes is reduced. That's what I mean by the otherwise deductible rule. So very often with costs I incur when I'm staying at home, medical or otherwise, those costs would not have been otherwise deductible to me.