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Proposed legislative changes to salary packaged entertainment benefits

In the May Budget, the Federal Government announced changes to salary packaged entertainment benefits that will affect some not-for-profit (NFP) sector employees from 1 April 2016.

The draft legislation has now been released, which does two things:

  • Places a cap on meal and entertainment benefits of $5,000 grossed up per annum (which equates to $2,650 before grossing up).
  • Makes meal and entertainment benefits reportable on the employee’s group certificate (which affects other entitlements and charges, such as the Medicare surcharge, university fee repayments, child support, family tax benefits etc.)

Further information is available here:

Volunteering Australia has written a submission (endorsed by the seven State and Territory volunteering peak bodies) setting out our views about proposed legislative changes to salary packaged entertainment benefits.

In summary, we are concerned that the changes will make it harder or more expensive for NFPs to recruit and retain appropriately skilled staff because of salary parity issues. The changes will have the following specific impacts on the volunteering sector:

  • They will reduce the amount and quality of the volunteer support services that volunteering peak bodies and volunteer support organisations will be able to provide to the volunteering sector.
  • They will increase the demand for volunteer support services because volunteer involving organisations may:
    • cut back on resourcing for volunteer management
    • recruit more volunteers to replace paid staff.

We believe the changes are a false economy.  The proposed cap is expected to save the Government $295 million over four years across the whole NFP sector, but this is far outweighed by the $25.4 billion per year contributed by the volunteering sector alone.

Read the full submission here.