3.9.3.35 Employer Provided Benefits - Financial Investments & Expense Benefits

Summary

This topic contains information on the assessment of employer provided financial investments and expense benefits as income for the CSHC income test. This section covers the following matters:

  • a definition of employer provided financial investments,
  • a definition of employer provided expense benefits, and
  • determining the value of employer provided financial investments and expense benefits.

Act reference: SSAct section 9(1)-'financial investment'

Definition of employer provided financial investments

A person receives an employer provided benefit when they receive a financial investment from:

  • their employer,
  • an associate of their employer, OR
  • a third party, under an arrangement with their employer.

Employer superannuation contributions to the following are NOT employer provided financial investments:

  • a superannuation fund, or
  • an ATO small superannuation account.

Definition of employer provided expense benefits

A person receives an employer provided benefit when they receive an expense benefit from:

  • their employer,
  • an associate of their employer, OR
  • a third party, under an arrangement with their employer.

Expense benefits are amounts paid to, or on behalf of, an employee (1.1.E.87) for the employee's private use.

Examples: Some common types of expense benefits include, but are not limited to:

  • telephone expenses,
  • holiday expenses,
  • medical or hospital expenses,
  • union dues or professional association membership fees,
  • fuel and/or power expenses, including electricity, gas, oil or firewood,
  • entertainment,
  • grocery bills,
  • credit card accounts,
  • sporting or social club fees, and
  • child care expenses.

Amounts paid, or reimbursed, to meet work related expenses are NOT assessed. If the expense benefit is for private AND work related use, the person must determine the value of the private use.

Employee discounts are NOT an assessable expense benefit.

Example: If a person can buy goods sold by their employer at a reduced rate, the discount is not assessable.

Determining the value of employer provided financial investments & expense benefits

The value of both financial investments AND expense benefits is the actual amount paid by the employer or third party.

Fluctuations in the value of an investment throughout the financial year of purchase do not affect the assessable amount. Entry or management fees included in the purchase price of the investment are included in the value of the investment IF they are covered by the employer.

Any amounts a person contributes towards an employer provided expense benefit are deducted from the total value.

Last reviewed: 20 March 2017