Private ruling: Voluntary payments
Date of advice: 12 September 2018
Published: October 2018
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are the payments received for your voluntary position as an official of a student association assessable income? | A1: Yes

Relevant facts and circumstances: You were elected to a role on a student association and began this role at the start of the year. This is a voluntary position with a term of one year i.e. you were expected to end this role at the end of the year. The student association is run by an executive committee of volunteers who are responsible for the general operation and direction of the association. Recently an honorarium was instituted to reflect the voluntary hours committed by officers of this association. This honorarium was continued into recent years; accordingly you received $X which was classified as an allowance on your PAYG Payment Summary. You stood down from your duties with the association before commencing other, unrelated, employment. The association is a not for profit organisation with an established constitution with rules of membership. Officers must be a member of the association and elected by the members. You have no minimum hours; merely an expectation that the duties outlined in part X of the constitution will be performed. The honorarium paid by the association is set at the discretion of the association and is not contractually required to be paid. Should officers (or other staff and stakeholders) incur expenses they are entitled to lodge a claim for reimbursement which would be separate and unrelated to any honorarium. You worked on association duties for approximately Y hours in 20YY and this would suggest an hourly remuneration of perhaps $X per hour from your honorarium. You also had other important duties as a student which you estimate took approximately Z hours per week. You also took limited work at your university. This work might amount to perhaps X hours only.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Section 6-10. | Income Tax Assessment Act 1997 Section 15-2. | Income Tax Assessment Act 1997 Section 15-2(1)

Reasons for decision: Summary: The characteristics of a payment made to a genuine volunteer that is not assessable are listed below: •The payment is to meet incurred or anticipated expenses. •The payment has no connection to the volunteer’s income-producing activities or services. •The payment is not received as remuneration or as a consequence of employment. •The payment is not relied upon or expected by the volunteer for day-to-day living. •The payment is not legally required or expected. •There is no obligation on the part of your organisation to make the payment. •The payment is a token amount compared to the services provided or expenses incurred by the volunteer. Whether the payment is a token depends on the full facts surrounding the payment and volunteer's circumstances. In your case you received an honorarium in consequence of services rendered to a student association. There are no set amounts or limits as to what constitutes a “token” payment. Consideration must be given to all of the circumstances surrounding both the payment and the recipient. The total honorarium is $X which gives an approximate hourly compensation of perhaps $Y per hour based on your estimate of duties and hours of work performed as an officer of the association. This is more than a token payment as the honorarium provides a substantial hourly remuneration for the hours of work performed. Therefore, these payments are regarded as assessable income under section 6-5 of the ITAA 1997.