Private ruling: Fringe benefits tax - not for profit - exemptions and concessions - religious institutions
Date of advice: 25 June 2019
Published: August 2019
Ruling period: FBT year 1 April 20XX to 31 March 20YY
Date scheme commenced: 1 April 20XX

Ruling: Q1: Are benefits provided to the Office Administrator employed by the Congregation, exempt benefits under section 57 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: No | Q2: Are benefits provided to the Playgroup and Children's Ministry Coordinator employed by the Congregation, exempt benefits under section 57 of the FBTAA? | A2: No | Q3: Are benefits provided to the Youth Ministry Coordinator employed by the Congregation, exempt benefits under section 57 of the FBTAA? | A3: Yes


Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 section 57 | Fringe Benefits Tax Assessment Act 1986 subsection 136(1) | Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision: Summary: The benefits provided to the Office Administrator employed by the Congregation, are not exempt benefits under section 57 of the FBTAA as the Office Administrator is not a religious practitioner as defined in paragraph (a) of the definition in section 136. | Detailed Reasoning - Detailed reasoning: Paragraph (g) of the definition of 'fringe benefit' in subsection 136(1) excludes a benefit that is an exempt benefit in relation to the year of tax. Section 57 provides Where: (a) the employer of an employee is a registered religious institution; and (b) the employee is a religious practitioner; and (c) a benefit is provided to, or to a spouse or a child of, the employee; and (d) the benefit is not provided principally in respect of duties of the employee other than: (i) any pastoral duties; or (ii) any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs; the benefit is an exempt benefit. | Detailed Reasoning - (a) The employer must be a registered religious institution: A 'registered religious institution' is defined in subsection 136(1) as an institution that is a registered charity, and registered under the Australian Charities and Not-for-Profits Commission Act 2012 as a charity with a purpose of advancing religion. The Congregation is registered with the Australian Charities and Not-for-Profits Commission as a charity with a subtype 'advancing religion'. The Congregation therefore meets the definition of a registered religious institution in subsection 136(1). Accordingly, paragraph 57(a) is satisfied. | Detailed Reasoning - (b) The employee must be a religious practitioner: To be exempt, the benefit must be provided by a registered religious institution to an employee, or a spouse or child of an employee, who is a religious practitioner. Subsection 136(1) defines a religious practitioner to have the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997). Subsection 995-1(1) of the ITAA 1997 states: religious practitioner means: (a) a minister of religion; or (b) a student at an institution who is undertaking a course of instruction in the duties of a minister of religion; or (c) a full-time member of a religious order; or (d) a student at a college conducted solely for training persons to become members of religious orders. An employee in the position of Office Administrator is not a student as described in paragraphs (b) and (d), nor a full-time member of a religious order as described in paragraph (c). The expression 'minister of religion' is not defined in the FBTAA and takes on its ordinary meaning in the context of where it appears. It covers members of the clergy (or their equivalent) across religions. Paragraph 14 of Taxation Ruling TR 2019/3 Fringe benefits tax: benefits provided to religious practitioners (TR 2019/3) states that except in rare cases, a minister of religion would have all of the following characteristics: (a) is a member of a religious institution (b) is recognised by ordination or other admission or commissioning, or has authority from the religious institution to carry out the duties of a minister based on theological training or other relevant experience (c) is officially recognised as having authority on doctrine or religious practice (d) is distinct from ordinary adherents of the religion (e) is an acknowledged leader in spiritual affairs of the institution, and (f) is authorised to act as a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies. Member of a religious institution The Office Administrator is expected to be an active member of the Congregation and to regularly attend worship at the Congregation. Official recognition Although the Office Administrator is not required to be theologically trained or ordained, all Lay staff are formally commissioned to provide program and pastoral leadership in the Congregation. Nevertheless, under the job description, the role essentially comprises administrative and communication support for the Congregation's ministry activities rather than authority to carry out the duties of a minister. Authority in matters of doctrine There is no evidence that the Office Administrator is officially recognised as having authority on doctrine or religious practice in the Congregation. Distinct from ordinary adherents The holder of the Office Administrator position is a member of the worshipping congregation but is only distinct from ordinary adherents of the religion by reason of employment by the Congregation. Acknowledged leadership in spiritual affairs The Office Administrator administers and supports the Congregation ministries, but the role does not acknowledge leadership in the spiritual affairs of the Congregation. Authorised to act as minister or spiritual leader The applicant states that Lay staff provide up-front leadership in worship services, however the Office Administrator is less likely to teach and preach directly to the Congregation. Even though the Office Administrator may undertake some pastoral activities, there is no evidence that the role encompasses authority to act as a minister or spiritual leader or to conduct religious worship and other religious ceremonies. | Detailed Reasoning - Conclusion: Although the role of Office Administrator satisfies some of the characteristics of a minister of religion as outlined in TR 2019/4, it is considered that they are insufficient for an employee in that role to be considered a minister of religion under paragraph (a) of the definition of religious practitioner. This means that the Office Administrator is not a religious practitioner and therefore the role does not meet the requirements for exemption under section 57. Accordingly, benefits provided to the Office Administrator employed by the Congregation are not exempt benefits. | Detailed Reasoning - Question 2: Are benefits provided to the Playgroup and Children's Ministry Coordinator employed by the Congregation, exempt benefits under section 57 of the FBTAA? | Summary: The benefits provided to the Playgroup and Children's Ministry Coordinator employed by the Congregation, are not exempt benefits under section 57 of the FBTAA as the Playgroup and Children's Ministry Coordinator is not a religious practitioner as defined in paragraph (a) of the definition in section 136. Detailed reasoning | Detailed Reasoning - (a) The employer must be a registered religious institution: The Congregation meets the definition of a registered religious institution in subsection 136(1). | Detailed Reasoning - (b) The employee must be a religious practitioner: An employee in the position of Playgroup and Children's Ministry Coordinator is not a student as described in paragraphs (b) and (d), nor a full-time member of a religious order as described in paragraph (c). The characteristics of a minister of religion are described in paragraph 14 of TR 2018/3. Member of a religious institution The Playgroup and Children's Ministry Coordinator is expected to be an active member of the Congregation. Official recognition Although the Playgroup and Children's Ministry Coordinator is not required to be theologically trained or ordained, all Lay staff are formally commissioned to provide program and pastoral leadership in the Congregation. In this case the commissioning would be in the specific area of children's ministries as expressed in the job description The job description indicates duties largely directed to oversight, support and training of those carrying out children's ministries within the Congregation and not authority to carry out the duties of a minister. In practice, the Playgroup and Children's Ministry Coordinator teaches the children in Sunday worship services and is responsible for teaching materials for Sunday morning programs. This includes preparing teaching materials or overseeing their preparation by others. This may be considered carrying out the duties of a minister in the area of children's ministries. Authority in matters of doctrine The Playgroup and Children's Ministry Coordinator has authority in leading and supporting children, young people and families ministries, but there is no evidence that this extends to doctrine or religious practice. Distinct from ordinary adherents The Playgroup and Children's Ministry Coordinator is distinct from ordinary adherents of the religion due to the employee's role in leading and supporting leaders of the Congregation's children and family ministries to grow in their effectiveness of relational evangelism. The employee also has oversight of children's ministry programs and events. Acknowledged leadership in spiritual affairs The Playgroup and Children's Ministry Coordinator is an acknowledged leader in the Congregation's children's programs and ministries, but the role does not include leadership in the spiritual affairs of the Congregation. Authorised to act as minister or spiritual leader The applicant states that Lay staff provide up-front leadership in worship services. For the Playgroup and Children's Ministry Coordinator this involves teaching children during Sunday worship services. However, there is no evidence to suggest that this role extends to an authority to conduct religious worship and other religious ceremonies. Lay staff are not able to conduct communion within the Congregation, except where specific permission is given. Although the applicant states that permission has been given on one or two occasions in the past, there is no indication of any occasion that this permission has been given to the Playgroup and Children's Ministry Coordinator. | Detailed Reasoning - Conclusion: Although the role of Playgroup and Children's Ministry Coordinator satisfies some of the characteristics of a minister of religion as outlined in TR 2019/3, on balance it is considered that they are insufficient for an employee in that role to be considered a minister of religion under paragraph (a) of the definition of religious practitioner. This means that the Playgroup and Children's Ministry Coordinator is not a religious practitioner and therefore the role does not meet the requirements for exemption under section 57. Accordingly, benefits provided to the Playgroup and Children's Ministry Coordinator employed by the Congregation are not exempt benefits. | Detailed Reasoning - Question 3: Are benefits provided to the Youth Ministry Coordinator employed by the Congregation, exempt benefits under section 57 of the FBTAA? | Summary: The benefits provided to the Youth Ministry Coordinator employed by the Congregation, are exempt benefits under section 57 of the FBTAA as the Youth Ministry Coordinator meets all the characteristics of a minister of religion as set out in TR 2019/3 and is therefore a religious practitioner as defined in paragraph (a) of the definition in section 136. Detailed reasoning | Detailed Reasoning - (a) The employer must be a registered religious institution: The Congregation meets the definition of a registered religious institution in subsection 136(1). | Detailed Reasoning - (b) The employee must be a religious practitioner: An employee in the position of Youth Ministry Coordinator is not a student as described in paragraphs (b) and (d), nor a full-time member of a religious order as described in paragraph (c). The characteristics of a minister of religion are described in paragraph 14 of TR 2019/3. Member of a religious institution The Youth Ministry Coordinator is expected to be an active member of the Congregation. Official recognition Although the Youth Ministry Coordinator is not required to be theologically trained or ordained, the applicant states that all Lay staff are formally commissioned to provide program and pastoral leadership in the Congregation. In this case the commissioning would be in the specific area of youth ministry as expressed in the job description. The job description requires the Youth Ministry Coordinator to have pastoring and/or counselling skills. The role is described as "leader support" and "oversight", with responsibilities directed to the development, administration, support and oversight of existing and emerging groups within the area of youth ministry. In practice these responsibilities largely equate to the duties of a minister in the area of youth ministry. Authority in matters of doctrine The Youth Ministry Coordinator is formally commissioned as a congregation leader having authority on religious practice in the area of youth ministry. Distinct from ordinary adherents The Youth Ministry Coordinator is distinct from ordinary adherents of the religion due to the employee's position of leadership of the Congregation's Youth ministries. Acknowledged leadership in spiritual affairs The Youth Ministry Coordinator performs tasks such as leading groups, preaching and counselling people which indicate that he is acknowledged as a leader in the spiritual affairs of the Congregation. Authorised to act as minister or spiritual leader The Youth Ministry Coordinator regularly leads and preaches at worship services, conducts Bible studies, provides counselling and advice, and mentors young people in faith and ministry leadership skills. Lay staff are not able to conduct communion within the Congregation, except where specific permission is given. An example of where permission was given to the Youth Ministry Coordinator occurred at a Congregation camp where the minister was not present. Permission was also given in the past during a period when the Congregation was without a minister. | Detailed Reasoning - Conclusion: The Youth Ministry Coordinator meets all the characteristics of a minister of religion as set out in TR 2019/3 and is therefore a religious practitioner as defined in paragraph (a) of the definition in section 136. | Detailed Reasoning - (c) A benefit must be provided to, or to a spouse or a child of, the employee: To be exempt, paragraph (c) of section 57 requires that a benefit is provided to, or to a spouse or a child of, the employee. As the Congregation pays the residential rent of the Youth Ministry Coordinator, this requirement is satisfied. | Detailed Reasoning - (ii) any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs;: To be exempt, paragraph (d) of section 57 requires that a benefit must not be provided principally for duties other than pastoral duties, or duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs ('directly related religious activities'). Paragraph 48 of TR 2019/3 states that pastoral duties are generally duties associated with the spiritual care of people and provides the following examples: (a) communication of religious beliefs (b) teaching and counselling adherents and members of the community (c) providing adherents and members of the community with spiritual guidance and support (d) conducting an in-service seminar of a spiritual nature (e) meeting with or visiting adherents, the sick, the poor, and others who need emotional and spiritual support, and (f) providing pastoral supervision to those engaged in pastoral duties. Paragraph 49 of TR 2019/3 explains what is meant by the term directly related: The words 'directly related' point to a close connection between the duties or activities of the religious practitioner and the practice, study, teaching and propagation of religious beliefs. In this context, duties and activities will be directly related where, in their essential nature, they promote the practice, study, teaching and propagation of religious beliefs. The Youth Ministry Coordinator's day to day activities include: · oversight and development of existing and emerging groups within the area of youth ministry · training and mentoring young people in faith and ministry leadership skills · regular preaching at worship services · conducting Bible studies · prayer, support, counselling and advice for leaders · encouraging the ministry of youth and promoting the development of youth leaders through education, training and support. · coordinating and overseeing group activities and developing a strategic plan for Congregation youth ministries These activities are predominantly pastoral duties, associated with the spiritual care of young people and others, or directly related to the practice, study, teaching or propagation of religious beliefs. We consider that the benefits the Congregation provides to the Youth Ministry Coordinator are in respect of these activities. | Detailed Reasoning - Conclusion: (a) The Congregation is a registered religious institution (b) The Youth Ministry Coordinator is a religious practitioner (c) The Congregation provides a benefit to the Youth Ministry Coordinator (d) The benefit is provided in respect of duties consisting principally of pastoral duties and directly related religious activities As all of the requirements of section 57 are met, the payment of the Youth Ministry Coordinator's residential rent by the Congregation is an exempt benefit.

1. The Congregation is registered with the Australian Charities and Not-for-Profits Commission as a charity with the subtype pertaining to the advancement of religion, in accordance with subsection 25-5 of the Australian Charities and Not-for-Profits Commission Act 2012 . | 2. The Office Administrator, Playgroup and Children's Ministry Coordinator and Youth Ministry Coordinator (Lay staff) are part-time salaried employees of the Congregation. | 3. Formal theological and ministry training is generally only a desirable attribute for these roles but not a requirement. Historically the appointees have varying levels of formal training. | 4. Lay staff are required to be active members of the Congregation. | 5. They are formally commissioned to provide program and pastoral leadership in the Congregation and are voting members of the Church Council. | 6. Lay staff are not able to conduct communion within the Congregation, except where specific permission is given. Permission has been given on one or two occasions in the past, for example permission was granted to the Youth Ministry Coordinator to conduct communion at a Congregation camp when the Pastor was not present. Permission was also given to the Youth Ministry Coordinator during a period when the Congregation was without a minister. | 7. The Office Administrator is a permanent part-time position. | 8. The Office Administrator job description requires the employee to: | · oversee office functions within the Congregation Ministry Team | · recruit office volunteers and provide them with administrative support and training | · undertake office tasks, with the support of volunteers, including | o reports and newsletters | o secretarial duties to the Church Council | · ensure that the administrative functions of the office are undertaken in a friendly and welcoming way with a servant-like attitude | · maintain high office morale and work ethics | · liaise with church treasurer and coordinate office finances with the functions of the treasurer | · manage contracts involving regularly scheduled work | · attend monthly Church Council meetings and fortnightly staff team meetings. | · regularly attend Congregation worship | · encourage and support the Congregation in the area of mission, including | o practical support for mission events and activities | o support with advertising and promoting mission activities | o maintain and coordinate the supply of food hampers to people in need | o offer and coordinate support for members of the community seeking help and who are in distress or in need of guidance and assistance | o liaise with other bodies regarding mission and outreach events and activities | o keep Church Council and the Congregation informed of mission activities and their ongoing need for support | o keeping Church Council and the Congregation informed of issues in the wider community that impact on the Congregation's mission values and goals. | 9. The Congregation pays $ per fortnight into a benefit account for the Office Administrator position to pay personal expenses of the incumbent. | 10. The Playgroup and Children's Ministry Coordinator is a permanent part-time position. | 11. The position's purpose is to: | · grow and support leadership of ministries impacting children, young people and families | · assist the growth of the Congregation's core value of relational evangelism. | 12. The position's job description requires the employee to: | · pray for the various children's ministries | · assist children and family ministry leaders to grow in their effectiveness of relational evangelism | · encourage and support leaders through listening, facilitating training and providing positive feedback and practical help | · build relationships with children, young people and their families | · oversee operation of the playgroup | · oversee the Sunday children's ministries programs and other children's ministry events | · contribute to the creation of a vision and the development of programs that focus upon the development of faith within families. | 13. The Playgroup and Children's Ministry Coordinator teaches the children in Sunday worship services and is responsible for teaching materials for Sunday morning programs. This includes preparing teaching materials and overseeing their preparation by others. | 14. The Congregation proposes to pay an amount into a benefit account for the Playgroup and Children's Ministry Coordinator to pay personal expenses of the incumbent. | 15. The Youth Ministry Coordinator is a permanent part-time position. | 16. The role of the Youth Ministry Coordinator is to encourage and grow the ministry of the Congregation with young people who are part of the Congregation and with young people in the wider community. | 17. This includes training and mentoring of young people, nurturing their faith and ministry skills as leaders and future leaders of the Congregation. | 18. The Youth Ministry Coordinator is required to regularly preach at worship services, and oversee young people to organise and lead such services. | 19. The Youth Ministry Coordinator also leads/conducts Bible studies with the young people of the Congregation which may include working with a younger leader as an informal internship. | 20. The Job Description states that the Youth Ministry Coordinator is a leader support role and an oversight role. | 21. The essential skills and knowledge required of the employee include various administration, planning and communication skills and pastoring and/or counselling skills. | 22. The position's job description states that the Youth Ministry Coordinator has primary responsibility with the Ministry Team for the oversight and development of existing and emerging groups within the area of youth ministry: | · through regular prayer and support for and with leaders, liaison with group leaders and by providing practical support to leaders in the way of counselling and advice | · by encouraging the ministry of youth and promoting the development of youth leaders through education, training and support. | · by supporting initiatives with Chaplains at adjacent schools | · by coordinating and overseeing group activities, assisting groups in their administration and undertaking regular reviews of the effectiveness of their programs | · by overseeing the progression of children and young people through and beyond successive groups | · by developing in consultation with appropriate groups a strategic plan for youth ministries | · by undertaking associated tasks which are necessary to maintain the ongoing ministry of the Congregation. | 23. The Congregation pays the residential rent of the Youth Ministry Coordinator.