Salary Packaging and Government Benefits and Child Support
Introduction
This AccessPay Fact Sheet is to provide guidance to employees about the potential impacts to Government
Benefits and/or Child Support Payments when participating in a salary packaging program. Information
provided includes impacts on how income is calculated when salary packaging and obligations on the
employee in declaring taxable income to the relevant government agencies.
Government Benefits – Income Support Payments and Family Tax Benefits
When applying for Income Support Payments or Family Tax Benefits through Centrelink it is important to
declare the correct income. Depending on a person’s individual circumstances, participation in a salary
packaging program may impact how your taxable salary is calculated and therefore how your Government
Benefits will be calculated.
Centrelink uses your ‘adjusted taxable income’ as part of the income test for government benefit payments.
Your adjusted taxable income can include:

Taxable Income – the income paid to you by your employer;

Reportable Fringe Benefits – the income benefits you received through your employment, such as
salary packaging benefits;

Reportable Superannuation Contributions; and

Any Foreign Income.
The following Income Support payments are subject to an income test, as is both parts of the Family Tax
Benefit (Part A and Part B).
Income Support Payments include:

Austudy;

Carer Payments;

Child Care Benefits;

Disability Support Pension;

Newstart Allowance;

Parenting Payment; and

Youth Allowance.
SPG-FCT-EXT-027
ACT
NSW
Phone 1300 133 697
Fax 1300 361 498
NT
QLD
SA
National Advisory Centre
GPO Box 1238, Adelaide SA 5001
TAS
Revised: 21 May 2015
VIC
WA
customerservice@accesspay.com.au
www.accesspay.com.au
1
Age Pension;
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
Salary Packaging and Government Benefits and Child Support
What Income Should You Declare?
This is best explained by an example:
Example:
Assume that Diana works for a charitable organisation who can package up to the $31,177 threshold.
Diana’s gross salary is $45,000 per annum, excluding superannuation, and she has no other income or
claims any income tax deductions. Diana’s Payment Summary (Group Certificate) will disclose a taxable
income of $45,000. For the purposes of Income Support Payments and Family Tax Benefits, Diana’s
income is $45,000.
Let’s assume Kelly works for the same organisation as Diana, and has the same gross salary. Kelly salary
packages the maximum allowable amount of $15,900 for her mortgage payments, and therefore her
Payment Summary (Group Certificate) will show a taxable income of $29,100 ($45,000 less the $15,900
pre-tax income used in her salary packaging arrangement).
Kelly’s group certificate will also show Reportable Fringe Benefit Amount of $31,177. The Reportable
Fringe Benefit Amount is calculated for each individual and is based on the value of general living expense
benefits paid during the year and the highest marginal tax rate.
Kelly must declare both the Taxable Income of $29,100 and the Reportable Fringe Benefit Amount of
$31,177.
Please note: If you are the recipient of, or are applying for these benefits, you will need to ensure your
correct adjusted taxable income is declared to Centrelink. Failure to declare the correct income may result in
Centrelink seeking repayment of benefits paid from you after lodging your annual tax return.
Child Support Payments
Where you have a child support arrangement through the Child Support Agency (CSA), it is important to
declare your correct income. You will need to declare your taxable income based on your last completed
income tax return, and your Reportable Fringe Benefits amount, as well as any other income you have.
The CSA will then use these figures to calculate your Child Support Income. As your child support
arrangement will be dependent on your individual circumstances (e.g. number of children, age of children,
etc) please contact the CSA for further information on how your salary packaging may impact on your child
support arrangement.
Where you have a private arrangement in place, salary packaging will not generally have any impact to your
child support payments.
Please note: Information, advice or guidance provided in this fact sheet, is general in nature and provided without reference to your organisation
policies or your circumstances. It is not and should not be considered to be organisational or personal advice to you. Please contact your accountant,
tax agent or legal adviser to determine how the information in this fact sheet may apply to your circumstances. Alternatively you can contact
AccessPay with any queries about how the information in this fact sheet may apply to your circumstances.
NSW
NT
QLD
SA
National Advisory Centre
GPO Box 1238, Adelaide SA 5001
TAS
VIC
WA
customerservice@accesspay.com.au
www.accesspay.com.au
2
ACT
Phone 1300 133 697
Fax 1300 361 498
Revised: 21 May 2015
Page
SPG-FCT-EXT-027