Who's got a Salary Packaging Dining Card?

[CaptJCool]

Gosh at that price. I would be dining out every night !!!
yea it is a gravy train. And it's what Most people would see as not for profit leaners. All jobs though are a combination of wages and perks - some get more perks than others and doctors who charge like a wounded bull in the private sector work in the public health system because these extras top up their salaries.

After all, Medicare isn't as attractive when bulk billed. Instead they just corporatised their medical practice to share the overheads so they could pocket the previous salary paid to their personal receptionist and the costs of running their individual house-based practices. But that said, the restricted code purchasing would be and probably is used on those income management welfare cards to stop alcohol, drugs not that they are bought legally in Aust, gambling and drinking.

So overall one must be happy that the wealthy and the welfare people are all now being lifters not leaners lol

 

[defurax]

Gosh at that price. I would be dining out every night !!!
yea it is a gravy train. And it's what Most people would see as not for profit leaners. All jobs though are a combination of wages and perks - some get more perks than others and doctors who charge like a wounded bull in the private sector work in the public health system because these extras top up their salaries.

After all, Medicare isn't as attractive when bulk billed. Instead they just corporatised their medical practice to share the overheads so they could pocket the previous salary paid to their personal receptionist and the costs of running their individual house-based practices. But that said, the restricted code purchasing would be and probably is used on those income management welfare cards to stop alcohol, drugs not that they are bought legally in Aust, gambling and drinking.

So overall one must be happy that the wealthy and the welfare people are all now being lifters not leaners lol

If the general idea is to stop people with good salaries from packaging meals and accommodations, the Government could have simply means-tested the packaging benefits of not-for-profit institution employees instead of this radical change.

 

[andye]

Government is quite within its rights to cap.

I am pleased that they have capped rather than abolished as it can make a significant difference to take-home pay for employees at the lower end of the payscales.

One of the (unintentional?) effects in NSW is to remove funding from State to the Federal coffers (as NSW takes 50% of the tax-savings)

 

[defurax]

Also wondering about hotel pre payments....

So according to Acccesspay, it is possible to prepay before end of March:
"Can I pre-pay my Entertainment Benefit expenses prior to 31 March 2016?
Entertainment Benefits relating to Holiday Accommodation can be claimed after you have paid for the holiday, even if you haven’t taken the holiday yet. This allows you to pay for your holiday and claim it prior to 31 March 2016, even if the holiday is not until later in the year."
(http://www.accesspay.com.au/files/d..._Holiday_Accommodation_Cap_FAQs_Rebatable.pdf)

 

[Jurahn]

It seems what will happen if there is still a balance on the Meals Entertainment card over and above the $2550 cap after 1st April varies between salary packaging providers.

Maxxia's website says:

What happens to my balance from 1 April 2016 if I do not spend the funds?
A. We have a few options for you to consider and confirm what you’d like to do. Our current options include:

1. Holding your balance in your account until you confirm what you’d like us to do with it.
2. Once we’ve discussed and confirmed with you what you’d like to do with your funds, we will allocate these funds towards other benefits, such as work-related expenses, additional superannuation payments, or even a novated lease.
3. At your request, we can return your balance to you via your payroll. However, please be aware that this balance will return to you as taxed income.

Whereas with CBB (who appear to be based in SA?), there appears to be no choice about what happens to the extra funds:

If you have less than $2550 remaining, this will be carried forward into 2016/17. This means that the $2550 maximum you can package in 2016/17 will be reduced by the amount carried over.
If you have more than $2550, only $2550 will be carried forward into 2016/17 and you will not be able to package any more for 2016/17.
Any amount over $2550 we must return to your employer for taxing in order to avoid you receiving a fringe benefits tax (FBT) bill at the end of 2016/17, due to over packaging

Your employer will need to tax the funds we send back, before returning the net amount to you. We will provide your employer with your NCB account details and the amount
returned ($) for this purpose.

Haven't found anything on the Smart Salary website about what will happen with excess funds, it seems the whole amount will just roll over but you can't package any further funds if you've exceeded the cap.

 

[coles525]

Is anyone on here with Advantage (Vic) for their meal card/hotels?

 

[vetrade]

Is anyone on here with Advantage (Vic) for their meal card/hotels?

Yes, we're with Advantage, coles 525. If I can I'm happy to help with any specific queries you may have but have jotted down some general comments:

We received advice recently about the changes and promptly booked up hotels for post 1st April use up to our max available. One key point was that even if this accommodation was to be used after 1st April the total amount of the claim had to be claimed against available income prior to the 31st March cut-off. That means that even prepaid accommodation paid for, and approved, before 1/4/16 can't be offset against income after that date. Given the short period between now and the end of March that limits things somewhat.

We were told that any amount still on the M&E card at 1/4/16 can be spent after that but it would mean we miss out on the $2550 claimable after then. To us the combined meal + accommodation allowance of $2550 kills most of the benefit. Most people wouldn't complain about having the benefit capped but $2550 is woefully low and robs the non-medico staff of most of the advantage. Since these staff were the ones originally targeted for assistance it's a shame that they have lost out primarily because the overall expense to the govt. ballooned because of medicos claiming for their kids' $100K weddings etc.

There was no mention from Advantage about the possibility of the amount over $2550 being returned to the employer and taxed but it's a point I will be getting explicit clarification about on Monday.

FWIW the other avenue I will be asking about is the possibility of ceasing Super Salary Sacrifice deductions (up to the $35K limit) between now and 31/3/16. I am postulating this could free up some more income against which we could claim some extra accommodation in advance. My intention would then be to double up on SSS payments for the 1/4/16 - 30/6/16 quarter to make sure that overall we still get to the $35K limit for the year. I hope I am correct in thinking that the SSS contributions are based on the FY rather than the FBT year ???

 

[coles525]

Partner is using them with her workplace, we haven't been provided information (new job a few months back, changing providers).

 

[vetrade]

Partner is using them with her workplace, we haven't been provided information (new job a few months back, changing providers).

If you want to PM me with your email address I'll scan the docs we received from Advantage and send them to you.

 

[medhead]

So it seems that with the Salary packaging provider at work the balance on my M&E card will need to be $0 by 1 April 2016 to be able to package $2,550 in the 2016-2017 FBT year. Good thing I didn't load too much money on the card...wonder what would happen with a balance of more than 2.5K on 1st of April? The person would be liable to pay FBT on the balance over 2.5K?

"Smartsalary will make sure that you meet the new benefit rules and all Meal Card deductions will be automatically amended from 1 April 2016 to ensure that your deductions do not exceed the $2550 Entertainment Cap amount.

Example

If your balance is reduced to $0 on the 1st April 2016, you will be able to package the full $2550 Entertainment Cap. This means your deductions and payments to your Meal Card will be approximately $100 each fortnight.

If your balance is $1000 on the 1st April 2016, this amount will roll over and you will be able to package $1550 of the Entertainment Cap. In this example your deductions are approximately $60 each fortnight.


To ensure that you have enough time to spend your balance, we recommend that you keep up-to-date with your card balance.


For those who have a pay day that falls on or near the 31st March 2016, there will be no deductions and payments to Meal Cards on these paydates. Why? Because we want to make sure you have enough time to spend those funds."

Thanks. they told me something similar.
rant= The situation is just $%$^# ludicrous. How in the name of the flying spaghetti monster is it valid to count an amount from this FBT year against the next FBT year. Do we have to have $0 left at the end of the tax year to avoid being taxed on that money again next year? Seems the ATO/Gumint is double dipping in this situation.

 

[vetrade]

Thanks. they told me something similar.
rant= The situation is just $%$^# ludicrous. How in the name of the flying spaghetti monster is it valid to count an amount from this FBT year against the next FBT year. Do we have to have $0 left at the end of the tax year to avoid being taxed on that money again next year? Seems the ATO/Gumint is double dipping in this situation.

While I am sympathetic to your point I think there is a sound rationale in that the deductions are expected to be matched against expenditure during the same FBT year. If you haven't spent the money by 31/3/16 then you haven't incurred the expense during that FBT year and on that basis strictly speaking you aren't entitled to have enjoyed a tax deduction for expenses to be incurred sometime in the future. The deduction should be delayed until the expense is incurred. I see it as being consistent with the ATO's approach to business expense deductions generally. If I was to put aside money with the intention of spending it on deductible expenses during the next FY I can't claim that expense until I have actually incurred it unless I am using accruals accounting, in which case I would still have to have proof of commitment to purchase the expenditure item at a specific time.

So it's not really a case of being taxed twice because you haven't been taxed on it at all yet (you actually got a tax deduction, remember). But if the money on the card is unspent then you actually got a deduction for a non-existent expense and because the deductions are capped from 1/4/16 it's really a matter of not being able to claim deductions above the cap after 1/4/16.

 

[medhead]

While I am sympathetic to your point I think there is a sound rationale in that the deductions are expected to be matched against expenditure during the same FBT year. If you haven't spent the money by 31/3/16 then you haven't incurred the expense during that FBT year and on that basis strictly speaking you aren't entitled to have enjoyed a tax deduction for expenses to be incurred sometime in the future. The deduction should be delayed until the expense is incurred. I see it as being consistent with the ATO's approach to business expense deductions generally. If I was to put aside money with the intention of spending it on deductible expenses during the next FY I can't claim that expense until I have actually incurred it unless I am using accruals accounting, in which case I would still have to have proof of commitment to purchase the expenditure item at a specific time.

So it's not really a case of being taxed twice because you haven't been taxed on it at all yet (you actually got a tax deduction, remember). But if the money on the card is unspent then you actually got a deduction for a non-existent expense and because the deductions are capped from 1/4/16 it's really a matter of not being able to claim deductions above the cap after 1/4/16.

Fair point.
It's not really a deduction, per se.

But that doesn't change the fact that this cap is poor policy that hurts the people who accept a lower salary to provide a public benefit*. If they were really serious how about looking at this rubbish in NSW where we have to give half of our benefit to the hospital/health department. I'm not even sure how that is legal with the ATO. In my experience that "benefit" is deduct pre-tax from my salary and is totally unaccounted in terms of FBT. I'll try not to rant too much about then having to pay the health department a "benefit" for the reduced tax for the benefit that I'm paying them. But I had an interesting dilemma in terms of deducting the meal purchased during travel using my meal card. Technically, I should be able to claim the "benefit" back, as it is an indirect tax.

Another side effect of this change is the significant cut to hospital budgets in NSW. My "benefit" paid to the hospital will reduce by $1000. Say that's consistent across 1000 employees. -$1,000,000 to the hospital budget, when a good year is a profit of a few thousand $. I really have to wonder how many people will lose there jobs because of this cap.

* have to laugh at describing those people as leaners, imagine society if there weren't people who are prepared to work in mental health services, or cooking meals for the homeless

 

[vetrade]

..........But that doesn't change the fact that this cap is poor policy that hurts the people who accept a lower salary to provide a public benefit*. ...........

This is where we are in complete agreement. Salary packaging was supposed to be a means of compensating those people but the new $2550 cap on meals + accom. has shot a hole through that

 

[vetrade]

For anyone interested I've just had it confirmed that Super Salary Sacrifice deductions follow the FY so if you make regular contributions it's legit to ask payroll to cease them between now and 31/3/16 to free up some more of your income to claim accommodation expenses against before the limit for that is capped. After 1/4/16 you can then increase your SSS contributions to ensure that by 30/6/16 you have still claimed up to the full concessional limit of $35,000 (which includes your Super Guarantee of 9.5% for FY16).

Edit: Clarification
When recalculating your SSS contributions remember that SSS works on the dates the contributions are sent in which - means those made in June 2015 to May 2016.

 

[defurax]

Looks like a bit of good news...$100 more of Meal & Entertainment for FBT 2017-18, it's not much but I guess better than nothing!

Your new Meal Entertainment Cap limit

At the beginning of the 2017-18 FBT Year, the gross-up rates that can impact some salary packaging benefit amounts will be changing. Your Meal Entertainment Cap is calculated by dividing the overall $5,000 cap by the Type 2 gross-up rate, which will reduce to 1.8868. As a result, your cap limit for 2017-18 will increase and you'll have $2,650 that you're able to spend on your card.

 

[suze2000]

Oh wow. I'll be able to eat out with hubby 3/4 more times per year.

Stupid short-sighted govt policies. All that's happened is that that money I used to salary package to dine out is now going to taxes and we are not eating out as much. Everyone I know is doing the same thing. I don't think it's a coincidence that there's been a rash of restaurants closing up shop.

 

[coles525]

Nothing has changed for us really. It was excellent before the downgrade last year, which we just managed to pay for most of our hotels/overseas accommodation in advance (with a bit of nagging a few of them). We then used the meal card everywhere we purchased food from (5 countries!) that the meal card was accepted.

We just kept on using it back home until finally (few months now), it was rejected due to funds.

We never change our dinner out plans, as we always use 25% or 1for1 entertainment book vouchers. Both book format, as well as mobile app. Saved $1000's

 

[andye]

I could imagine Melbourne being hit given the more generous personal discount (compared to NSW). Must be a lot of healthcare workers in Mel. Was jealous of the SA accommodation allowance too.
I don't think I've changed that much-I do miss the home party discount but don't miss separating food at the till into entertainment and other.

 

[vetrade]

Nothing has changed for us really. It was excellent before the downgrade last year, which we just managed to pay for most of our hotels/overseas accommodation in advance (with a bit of nagging a few of them). We then used the meal card everywhere we purchased food from (5 countries!) that the meal card was accepted.

We just kept on using it back home until finally (few months now), it was rejected due to funds.

We never change our dinner out plans, as we always use 25% or 1for1 entertainment book vouchers. Both book format, as well as mobile app. Saved $1000's

I'm guessing that most meal cards, like ours, function much like a credit card when you use them OS, which means you get hit for currency conversion fees etc. We don't use the card OS (we use a 28 Degree card with no fees on purchases) - but we do save our receipts and just lodge a claim when we get back home (you just convert the currency of the receipt into $AUD). The funds get credited to our bank account. Not a huge saving with the $2.5K cap, but why pay what you don't have to?

 

[PLANT]

Hi all,

Hope this helps all have a happy New financial year!