‘Stage 3’ Tax Adjustment – Third and Final Payment
May 19, 1997
The ‘Stage 3’, third and final payment of the 1996 tax dispute, secured by the Union, is due to be paid on 17 July, 1997.
Members may recall that the two principal reasons FBEU members pursued and won this compensation were;
Members considerations in voting to accept the 1994 Award included the Department’s assurances (both in writing and verbally) to members through the Union, that the relieving payments of 60c/km and the $15.00 base rate [59%] were non-taxable. The reality of the tax treatment on relieving payments did not reflect these assurances and there had been no changes in tax law nor interpretation. The Department had either failed to get its facts right or had deliberately attempted to mislead members and the Union. The compensation won by members restores the ‘take home’ relieving payments to what was originally offered and accepted – a non-taxed or ‘net’ amount.
In May, 1996, members were advised for the first time that the 60c/km allowance was going to appear on their 1995/1996 group certificates as tax assessable income. There had been no PAYE tax instalments deducted for these amounts. Conceivably, many members were going to owe the tax office a considerable amount of money. Members had not budgeted for this unanticipated income tax liability. This situation was compounded by the Department’s failure to notify the Union and its members, despite it having received advice to this effect from the Australian Taxation Office some six months beforehand.
The tables on the reverse side of this notice summarise the compensation schedule.
Table 1. outlines the 3 stage compensation process relating to relieving payments;
60c/km and 59% of the $15.00 base rate – Table 4; ‘A’ payments from the 1994 Award.
The Union recently secured the extension of thetax compensation process to reliefs performed outside the standard matrices ie: Table 4; ‘B’, ‘C’ and ‘D’ relieving payments in the 1994 Award. These relieving payments were based on the $15.00 base rate and 60c/km. The compensation schedule for members who received these relieving allowances is outlined in Table 2.
Table 1.
Table 4: ‘A’ payments for relieving in 1994 Award
Payment Date
Period covered
Reason
Stage 1: – 15 August, 1996
(Pay code – RK TAX)
11 November, 1994 –
30 June, 1996
Off-set tax by restoring the 60c/km and 59% of relieving payment to a pre-tax amount.
Stage 2: – 7 November, 1996
(Pay code – INCON)
N/A – Inconvenience
Payment
Inconvenience payment representing 50% of the Stage 1 payment relating to 60c/km.
Stage 3: – 17 July, 1997
(Pay code – RK TAX)
1 July, 1996 –
27 February, 1997
Off-set tax by restoring the 60c/km and 59% of relieving payment to a pre-tax amount.
Table 2.
Table 4: ‘B’, ‘C’ & ‘D’ payments for relieving in 1994 Award
Payment Date
Period Covered
Reason
8 May, 1997 or
Stage 1: – 19 June, 1997
(Pay code – RK TAX)
11 November, 1994 –
30 June, 1996
Off-set tax by restoring the ‘B’, ‘C’ & ‘D’ relieving payments to a pre-tax amount.
Stage 3: – 17 July, 1997
(Pay code – RK TAX)
1 July, 1996 –
27 February, 1997
Off-set tax by restoring the ‘B’, ‘C’ & ‘D’ relieving payments to a pre-tax amount.
Again, members are reminded to keep a log book of all work related kilometres travelled. Such records may be invaluable in claiming tax deductions against kilometre allowances at tax time.
Members should contact their State Committee representative or the Union Office for clarification on the tax adjustment compensation process.
