Private ruling: scholarship program
Date of advice: 19 February 2026
Published: 7 April 2026
Ruling period: Fringe Benefits Tax (FBT) Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Will the Scholarship Program give rise to a fringe benefit under subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: No.

Relevant facts and circumstances: The University will offer a Scholarship Program (the Program) which contains academic and clinical training requirements which are satisfied through a concurrent employment contract within the discipline. Successful students for the Program will receive a fee offset (the Scholarship), funded by the Government, providing a full fee waiver for the duration of their enrolment in the Course. The Programs objective is to train graduates in both clinical research and clinical skills with the goal of providing training towards credentialing to practise as a specialist by an approved Australian, European or American college. The Program requires students undertake academic and clinical training, in order to gain research experience, complete publications, and write a thesis that fulfills both academic and credentialing college requirements. The three-year Program allows students to target credential requirements for speciality certification. All students enrolled in the Program receive the Scholarship based on their status as a student of the University and their eligibility is based on being a student in the program. Scholarship Funding The University is a recipient of Commonwealth Research Training Program (RTP) block grants, governed by the Commonwealth Scholarship Guidelines (Research) 2017, Part 2-4 of the Higher Education Support Act 2003 . These grants are provided to support the training of domestic candidates (Australian citizens and Permanent Residents as well as New Zealand citizens) undertaking higher degrees by research. The University administers and allocates RTP funding in accordance with the Training Program Scholarship Policy. Pursuant to the policy, domestic students enrolled in a graduate research degree are eligible to apply. Student Applicants The Program candidates are chosen after a competitive selection process. A selection committee reviews all applicants, conducts interviews, and checks references. Once eligible candidates are selected, they will be enrolled in the Program and offered a position within the discipline to meet the clinical training component of their course. Continuation in the Program is dependent on satisfactory progress and evaluations and completion within the three-year period.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986, subsection 136

Reasons for decision: Summary: It is considered that the provision of an educational scholarship to a student under the Program would not constitute a 'fringe benefit' as defined in subsection 136(1) of the FBTAA. | Detailed Reasoning - 'Fringe benefit': The definition of a 'fringe benefit' in subsection 136(1) of the FBTAA provides that a fringe benefit will arise where the following conditions are all satisfied: 1. A benefit is provided at any time during the year of tax. 2. The benefit is provided to an employee or an associate of the employee. 3. The benefit is provided by: (a) their employer; or (b) an associate of the employer; or (c) a third party other than the employer or an associate under an arrangement between the employer or associate of the employer and the third party; or (d) a third party other than the employer or an associate of the employer, if the employer or an associate of the employer: (i.) participates in or facilitates the provision or receipt of the benefit; or (ii.) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit; and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so; 4. The benefit is provided in respect of the employment of the employee. 5. The benefit is not one that is specifically excluded as per paragraphs (f) to (s) of the definition of a fringe benefit in subsection 136(1) of the FBTAA. A discussion is provided below in respect of whether each element or condition of the definition of a fringe benefit is satisfied. | Detailed Reasoning - Is a benefit is provided?: Subsection 136(1) of the FBTAA provides a broad definition of a 'benefit' as including: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under: a. an arrangement for or in relation to: (i.) the performance of work (including work of a professional nature), whether with or without the provision of property; (ii.) the provision of, or of the use of facilities for, entertainment, recreation, or instruction; or (iii.) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar extraction; b. a contract of insurance; or c. an arrangement for or in relation to the lending of money. The definitions of 'provide' and 'provider' in subsection 136(1) of the FBTAA are as follows: | Detailed Reasoning - provide:: (a) in relation to a benefit - includes allow, confer, give, grant or perform; and (b) ... provider, in relation to a benefit, means the person who provides the benefit. The giving or granting of an educational scholarship falls within the definition of a 'benefit' as defined in subsection 136(1) of the FBTAA. As such, the first condition (i.e. the provision of a 'benefit') of the definition of a 'fringe benefit' - as defined in subsection 136(1) of the FBTAA - would be satisfied. | Detailed Reasoning - Is the benefit is provided to an employee or an associate of the employee: An 'employee' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employee. Under the Program, the students will be employed within the discipline to fulfill their practical aspect of the course and will be remunerated in accordance with the University's Enterprise Bargaining Agreement. Therefore the provision of the benefit is provided to an employee, the second condition (i.e. a benefit is provided to an employee or an associate of an employee) of the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA would be satisfied. | Detailed Reasoning - Is the benefit is provided by an employer, an associate of the employer or a third party: 'Employer' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employer. The benefits are provided by the University through the Program. Therefore, the University is the future employer. Therefore, the third condition (i.e. the benefit is provided by an employer) has been satisfied. | Detailed Reasoning - Is the benefit is provided in respect of the employment of the employee: As per subsection 136(1) of the FBTAA in respect of' in relation to the employment of an employee includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment. . Subsection 148(1) of the FBTAA stipulates that a benefit will be provided in respect of the employment of an employee: (a) Whether or not the benefit is also provided in respect of, by reason of, by virtue of, or for or in relation directly or indirectly to, any other matter or thing; (b) Whether the employment will occur, is occurring, or has occurred; (c) Whether or not the benefit is surplus to the needs or wants of the recipient; (d) Whether or not the benefit is also provided to another person; (e) Whether or not the benefit is, to any extent, offset by an inconvenience or disadvantage; (f) Whether or not the benefit is provided or used, or required to be provided or used, in connection with that employment; (g) Whether or not the provision of the benefit is, or is in the nature of, income; and (h) Whether or not the benefit is provided as a reward for services rendered, or to be rendered, by the employee. In J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; (2000) 44 ATR 22 ( Knowles ), the full Federal Court - in examining the meaning of 'in respect of' an employee's employment - held that the phrase required a 'nexus, some discernible and rational link, between the benefit and employment', though noted that 'what must be established is whether there is a sufficient or material, rather than a causal connection or relationship between the benefit and the employment'. The full Federal Court in Knowles also suggested that it would be useful to ask 'whether the benefit is a product or incident of the employment'. The Federal Court stated in McArdle, J.W v The Commissioner of Taxation for the Commonwealth of Australia [1988] FCA 93 (Mc Ardle) that: In my opinion the passages cited indicate clearly that it is necessary to go beyond the historical or temporal connection which had existed or presently existed between an employer and an employee. It is necessary to consider whether the taxpayer received the payment in any capacity other than that of employee, whether there was any consideration other than services rendered or to be rendered, and whether it could be said that the payment was in consequence only of the employee's service or of some other consideration. Therefore, to consider whether there is a sufficient or material connection between the awarding of a scholarship and the employment of the employee, it is necessary to determine whether the characterisation of the benefit can be said to be remuneration, and whether the benefit is a product or incident of the employment. In regard to the Program any student at the University, including all student participants and other RTP recipients, can apply for the scholarship of a 'fee waiver.' The calculation method of the fee waiver is consistent across all applicants. All students enrolled in a graduate research degree are eligible for a fee waiver and the scholarship is independent of any employment status. The work arrangements have no impact on the provision of the scholarship. In the present circumstances, the following factors lead to a conclusion that there is not a sufficient or material connection between the provision of an educational scholarship to a student and the employment of the student. • The awarding of a scholarship will not take into account any of the work-related characteristics of the employee as the Scholarship is granted first (that is, work performance, status or seniority); • The scholarship will be awarded based on the merit of the student; which is not under the control of the University; • A competitive process is undertaken to identify students that are eligible for the fee waiver which is not typical of an employment relationship where an employer selects an employee based on their needs and requirements; • The Scholarship is available to students from all disciplines, including but not limited to those enrolled in the Program. The sole purpose of the Program is to enable graduates to be trained in both clinical research and clinical skills; and • The work undertaken by the student is an integral part of the education program as it requires a specialist level of practical experience and clinical expertise. The work is carried out primarily for educational purposes and is integral to the student fulfilling the course requirements. Although employment with the University will be offered, it can be found that there is a mere causal connection between the benefit provided to the student and the employment as an employee. The Program is designed to carry out activities to develop scholarly research and professional expertise relevant to their discipline. It is solely awarded on the basis of student status and academic merit, independent of any employment relationship. The employment component is integral to the educational requirements of the program and does not influence the provision of the scholarship. It is therefore considered that the awarding of a scholarship to a student lacks a sufficient or material connection to the student's employment with the University and hence the scholarship is not provided 'in respect of the employment to the employee.' As such, the fourth condition (i.e. a benefit is provided in respect of the employment of the employee) of the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA would not be satisfied. | Detailed Reasoning - Conclusion: As all of the conditions of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA are not satisfied, the provision of an educational scholarship to a student as an employee would not constitute a 'fringe benefit'.

Reasons for decision: These reasons for decision accompany the Notice of private ruling for the University.