ATO ID 2004/557: Exempt benefits: work-related preventative health care - corrective optical aids for screen based equipment
Date of decision: 30 June 2004
Year of income: Year ended 31 March 2005
Business line: Superannuation and Employer Obligations

Issue
If an employer only reimburses permanent employees for the cost of corrective optical aids, are the expense payment benefits exempt benefits under section 58M of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision
No. The health care is not made available generally to all employees of the employer with similar work-related risks. Therefore, the recipients expenditure is not in respect of the work-related preventative health care (WRPHC) of the employee as required by subparagraph 58M(1)(a)(iii) of the FBTAA.

Facts
The employer has both permanent and non-permanent employees. The employer maintains an eyesight screening and testing policy in relation to employees work involving use of screen based equipment (SBE). The employer recommends that employees who are required to operate SBE for at least one hour per day or ten hours per week have their eyesight tested on a regular basis. The minimum set of tests for determining whether special optical aids are required to perform SBE work are: The employer does not subsidise the cost of eyesight screening and testing. The employer advises that this is the responsibility of the employee. The employer will only reimburse permanent employees for part or all of the cost of corrective optical aids for use on SBE, after allowance for reimbursement by any private health insurance fund. To be eligible for the reimbursement an employee must:

Reasons for decision
Summary: Section 58M of the FBTAA exempts from FBT the provision of certain benefits provided in respect of the employment of an employee. The exemptions include, at subparagraph 58M(1)(a)(iii) of the FBTAA, the provision of expense payment benefits where the recipient's expenditure is in respect of WRPHC of the employee. The definition of WRPHC in subsection 136(1) of the FBTAA requires, in relation to an employee of an employer, that the form of care provided by, or on behalf of, a legally qualified optometrist is wholly or principally in order to prevent the employee from suffering from work-related trauma. The definition also requires that the form of care is made generally available to all employees of the employer who are likely to be at risk of suffering from similar work-related trauma. It is accepted that the provision of optical aids such as spectacles is a form of care provided by or on behalf of an optometrist. 'Work-related trauma' is defined in subsection 136(1) of the FBTAA to include the coming into existence, the aggravation, acceleration or recurrence of any physiological condition in relation to an employee that is or may be harmful or disadvantageous to, the employee. It is accepted that the coming into existence, the aggravation, acceleration or recurrence of any physiological condition as a result of using SBE in the workplace can be a 'work-related trauma' in accordance with subsection 136(1) of the FBTAA. Where it has been established that the employee uses SBE in the workplace for at least one hour continuously each working day or at least 10 hours in a working week, and an optometrist has examined the employee and certified that the employee requires optical aids for the performance of SBE work, this level of enquiry would be sufficient in order for the employer to be satisfied that the optical aids were provided wholly or principally in order to prevent the employee from suffering from work-related trauma. The section 136(1) of the FBTAA definition of WRPHC also requires that that the form of care is made available generally to all employees of the employer who are likely to be at risk of suffering from similar work-related trauma. The definition of WRPHC is also 'in relation to an employee of an employer'. Therefore, those employees attending 'in relation to an employee of an employer' and receiving care in relation to that role and in order to prevent the employee from suffering from work-related trauma would only include those permanent employees who have obtained a statement of authorisation from their employer. Non-permanent employees who attend (or who might attend) the optometrist and who do not have a statement of authorisation from the employer would attend the optometrist in a private capacity. As the form of care is not made available generally to all employees of the employer who have similar risks the definition of WRPHC is not satisfied for those employees who do receive the form of care. On that basis, the recipients expenditure is not in respect of WRPHC under subparagraph 58M(1)(a)(iii) of the FBTAA. As a consequence the expense payment benefit is not an exempt benefit under section 58M of the FBTAA.

Legislative references: Fringe Benefits Tax Assessment Act 1986 section 58M subparagraph 58M(1)(a)(iii) subsection 136(1)
Related ATO interpretative decisions: ATO ID 2004/301 | ATO ID 2002/963 | ATO ID 2003/689
Subject references: Fringe benefits Fringe benefits tax Exempt benefits FBT work-related preventative health care