Media Release by The Hon Jenny Macklin MP

Protection for Charitable Sector Employees

Joint Media Release with:

  • The Hon Wayne Swan MP, Treasurer

The Rudd Government is taking urgent action to ensure employees in the charitable and not-for-profit sector are not hurt by the Howard Government’s 2006 budget measures due to come into effect on 1 July 2008.

The Government will move urgent amendments in the Senate next week to protect employees in the charitable and not-for-profit sector from losing up to $100 a fortnight because of Howard Government changes to fringe benefit tax arrangements.

The Government’s amendments will restore the use of the net reportable fringe benefit in income definitions for Family Assistance.
This will ensure staff in not-for-profit organisations will not suffer a loss of family tax or child care benefits after 1 July 2008 if their circumstances have not otherwise changed.

Up to 85,000 Centrelink customers are expected to benefit from this decision.

From 23 June 2008, Centrelink call centre staff will be able to advise affected customers of the new arrangements. Once legislation is passed, Centrelink will issue an IT systems change to ensure the net fringe benefit amounts are used and will adjust customers’ records accordingly.

Centrelink will make considerable efforts to contact customers who would have been negatively affected by the changes informing them of the new arrangements.

Centrelink will make every effort to ensure payments are maintained, however these are complex changes. If families are unsure they should contact Centrelink or their family assistance office.

These are complex issues, with flow on effects to employees beyond the not-for-profit sector receiving family assistance. Therefore the Government has asked the Henry Commission to examine the complexity of existing fringe benefit arrangements and make recommendations to improve equity and simplicity in the longer term.

The Rudd Government and the charitable and not-for-profit sector only recently become aware of the potential impact of changes to family assistance law.

The changes were legislated in 2006 but are not due to take effect until 1 July this year. They are unrelated to this year’s Budget.

The Howard Government did not explain the impact of its changes on the charitable and not-for-profit sector.

The Rudd Government will continue to work with the charitable and not-for-profit sector on these issues.

The Government also seeks assurances from the Opposition that they will not delay the passage of this important legislation in the Senate.