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Hi. My partner is working FIFO in Port Hedland. He is on a fixed 4 weeks on 4 weeks off, but is still casual. He receives an allowance which is named on his payslip as ‘breakfast reimbursement, lunch reimbursement, dinner reimbursement’, as well as ‘joining / leaving expenses’ We are reasonably confident that he can claim travel expenses up to the per diem rate as per the ATO’s tables against those allowances. However, when he becomes permanent, the allowances that he receives are called ‘Living away from home allowance, commuter travel allowance, and joining / leaving expenses’. Can he claim travel expenses against those allowances?
Many thanks.
Answer
Here is a link to the ATO tables that you refer to http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~2010%2F19~basic~exact&target=FA&style=java&sdocid=TXD/TD201419/NAT/ATO/00001&recStart=1&PiT=99991231235958&Archived=false&recnum=8&tot=8&pn=ALL:::ALL
I am assuming that when you say FIFO that you really do mean that your partner’s employer pays for flights to and from work.
The travel that your partner undertakes is home to work travel. Once he arrives at work he is not travelling he has a fixed place of work. It is the same place every time, just as an office worker, sleeping at work does not make it travel. It is the other way around before travel and qualify as travel for the purposes of the ruling there must be sleeping away from home. Travel is not an inherent part of his job. The mine site is his regular place of work, so while everything else looks like he is travelling the fact that it is his normal workplace means he is not.
Alternatively for him to be considered travelling he would have to have started work before he left home and his home be a base of operations. A recent Federal court decision regarding John Holland construction made it very clear that even though an employer might exercise some control of its employees during their travel time, and even pay them for that time, that does not mean they have started work before they arrive at their place of work. John Holland has appealed so keep an eye on our Newsflash this may all change but I doubt it will go so far to change a regular workplace into a travel destination.
So what you are left with:
The ruling above can only offer your partner the opportunity to claim an overtime mean allowance if your partner works more than 10 hours on that day, has to incur a meal expense and the payment is part of the award. Here is an extract from one of my articles that explains how this can be exploited.
In the mining industry 10 to 12 hour shifts are the norm with
many tradespeople receiving $10 per night in overtime meal
allowances for all 5 days of the week. The $10 allowance is
included as income but $28.20 can be claimed as a tax
deduction, a difference of $18.20 for 5 nights times 52 weeks
equals $4,372 extra tax deduction. Your employer is not
required to include these allowances on your PAYG summary if
they consider them to be fully expended so you will need to
keep all your payslips so these amounts can be calculated.
When it comes to an overtime meal allowance you can stop and
have a meal at a tavern on your way home after the shift.
Ideally keep at least a couple of receipts to show a typical
meal cost you can claim this or $28.20 whichever is the
smallest amount.
If your partner is provided with food on site free of charge then you cannot argue that a meal expense has been incurred.
Things would be different if the employment was itinerant in nature that means there is more than one work location before returning home.
Just like an office worker cannot claim travelling to their normal place of work each day neither can miners. Another extract
.
When negotiating your salary package try to have your
employer cover all of your home to work travel costs even if
it means a lower take home pay. When working on a remote
mine site any cost your employer incurs in transporting you
to and from that site is an exempt fringe benefit. This
effectively means that if your employer pays the travel
costs it is out of pre tax dollars. If you pay the travel
costs they will be payable out of after tax dollars. .
When negotiating this in your salary package refer your
employer to TD 95/49. Warning, an employer does not
technically have to pay super on anything you salary
sacrifice and only the cash portion of your salary package
is covered under Workcover so make sure your agreement
includes some compensation for this.
Likewise it is better that the employer pay for the meals
than pay an allowance because the employer will be able to
treat the meals as a exempt fringe benefit if the job site
is remote.
There are only two allowances out of the ones that you mention that have potential. The first is the dinner allowance as discussed above, if it is paid in relation to overtime worked. The second is the living away from home allowance (LAFAH). But again you are unlikely to be able to take advantage of the concessions because a living away from home allowance does not qualify for any concessions if it appears on the PAYG summary. There are only concessions if the employer accepts it as a fringe benefit payment. FIFO workers do qualify for the LAFAH FBT concessions and they are not limit to only being allowed to be in that location for more than 12 months. Being subject to FBT means it does not go on the employees PAYG summary as it is considered a fringe benefit not a wage.
In short
Your partner is not considered to be travelling away from home overnight for work when he goes to the mine site because it is his regular place of work. So you cannot take advantage of the reasonable allowances.
If your partner’s employer provides all meals then any allowance received is just part of normal income. If he pays for meals the only possibility is overtime meal allowance
The only concessions for FIFO workers are within the fringe benefits tax legislation. It is not being treated as a fringe benefit if it is appearing on his PAYG summary. This is the key you need to understand whether any of these allowances are going to appear on the PAYG summary, if they do then you cannot claim deductions against them. Other than if it is a payment in regard to an overtime meal and your partner has to pay for a meal.
Here is a link to our miners booklet http://www.bantacs.com.au/booklets/Miners_Booklet.pdf
