Private ruling: Exempt Benefits: location of employees in public hospitals
Published: May 2012
Ruling period: 1 April 2012 to 31 March 2013 | 1 April 2013 to 31 March 2014 | 1 April 2014 to 31 March 2015

Ruling: Question | Will the exemption in subsection 57A(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) continue to apply to the benefits provided to the employees who have been transferred from another nominated State or Territory body? | Answer | Yes.

Relevant facts and circumstances: You are a nominated State or Territory body. Under current reforms, you will become the employer of various employees who perform their duties in a public hospital. The current employer of the employees is a nominated State or Territory body. The current employer has been applying the exemption in subsection 57A(2) to benefits provided to the employees.



Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Subsection 57A(2) of the FBTAA provides an exemption from fringe benefits tax for benefits provided to certain employees of a government body. It states that: | 57A(2) [Duties of employee relating to public hospital] Where : (a) the employer of an employee is a government body; and | (b) the duties of the employment of the employee are exclusively performed in, or in connection with: | (iii) a hospital carried on by a society that is a non-profit society for the purposes of section 65J or by an association that is a non-profit association for the purposes of section 65J; | a benefit provided in respect of the employment of the employee is an exempt benefit. | It contains two conditions that must be satisfied for the exemption to apply. They are: | 1. the employer must be a government body; and | 2. the duties for employment must be performed either: | · exclusively in a hospital | · exclusively in connection with a hospital. | Is the employer a government body? | As provided in subsection 135U(5), a nominated State or Territory body will be taken to be a government body. Therefore, as the employer of the employees will continue to be a nominated State or Territory body, the first requirement will continue to be satisfied. | Are the duties of employment exclusively performed in a public hospital?: The first test in paragraph 57A(2)(b) requires that the duties of an employee must be exclusively performed in a public or non-profit hospital. The word 'in' within the context of 57A(2)(b) denotes physical location, physical precinct or physical situation. To satisfy this test the employee would be required to exclusively perform their duties within the land and buildings occupied by a hospital. | The transfer of the employees will not change the application of this second test. Currently, the employees provide services onsite. The change of employer will not alter the location at which the duties are performed. As the work duties will continue to be performed entirely onsite at public hospitals, the first limb of the second paragraph has been met. | Therefore, the exemption in subsection 57A(2) of the FBTAA will continue to apply to the employees who work exclusively in public hospitals. | However, if their work location was to change and some of the duties are performed outside the physical boundaries of the public hospitals, they will not satisfy the first limb of the second paragraph and the exemption will not apply, unless the duties are exclusively performed in connection with a public hospital.