Class Ruling CR 2006/70
Status: legally binding
Date of effect: 2 August 2006

What this ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the relevant provision(s) identified below apply to the defined class of entities, who take part in the scheme to which this Ruling relates. Relevant provision(s) 2. The relevant provisions dealt with in this Ruling are: Class of entities 3. The class of entities to which this Ruling applies are employers who make available the Weight Watchers 'At Work' program to their employees. Qualifications 4. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. 5. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 17 of this Ruling. 6. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 7. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to:

Class of entities or scheme: 3. The class of entities to which this Ruling applies are employers who make available the Weight Watchers 'At Work' program to their employees. | Qualifications: 4. The Commissioner makes this Ruling based on the precise scheme identified in this Ruling. 5. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 12 to 17 of this Ruling. 6. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 7. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to: 8. This Ruling applies to schemes that commence after 2 August 2006. However, the Ruling does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Ruling. Furthermore, the Ruling only applies to the extent that: 9. If this Class Ruling is inconsistent with a later public or private ruling, the relevant class of entities may rely on either ruling which applies to them (item 1 of subsection 357-75(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA)). 10. If this Class Ruling is inconsistent with an earlier private ruling, the private ruling is taken not to have been made if, when the Class Ruling is made, the following two conditions are met: 11. If the above two conditions do not apply, the relevant class of entities may rely on either ruling which applies to them (item 3 of subsection 357-75(1) of Schedule 1 to the TAA). 12. The scheme that is the subject of the Ruling is described below. This description is based on the following documents which are attached to the file record maintained by the Australian Taxation Office for this Ruling. These documents, or relevant parts of them, as the case may be, form part of and are to be read with this description. The relevant documents or parts of documents incorporated into this description of the scheme are: 13. Fortuity Pty Ltd trading as Weight Watchers (Weight Watchers) is in the business of providing counselling services to the general public with respect to weight-loss management, and the promotion and achievement of a healthy lifestyle. As an extension of these business activities, Weight Watchers is proposing to make available an 'At Work' program to assist employers in achieving their aim of improving the quality of their employee's work performance. 14. The key features of the proposed arrangement are as follows: | Program responsibilities: 15. It will be the responsibility of Weight Watchers to: 16. It will be the responsibility of the employer to: 17. The opportunity to attend the meetings will not be provided to employees as: 18. The attendance of the employees of the employer at the 'At Work' meetings will be an exempt benefit under subparagraph 58M(1)(c)(iv) of the FBTAA. Commissioner of Taxation 2 August 2006 19. Subparagraph 58M(1)(c)(iv) of the FBTAA provides that where a residual benefit is provided in respect of the employment of an employee the benefit will be an exempt benefit if it consists of the provision of work-related counselling of the employee. 20. The employees will be attending weekly meetings on the employer's business premises. These meetings will focus on matters relating to health and fitness, such as weight loss, healthy eating and exercise programs. Each meeting will include a confidential weigh-in, lecture and discussion. | Is a benefit being provided to the employees?: 21. The term 'benefit' is defined in subsection 136(1) of the FBTAA to include: As the services to be provided to the employees who attend the weekly meetings come within this definition, a 'benefit' will be provided to the employees. | Is the benefit provided to employees a residual benefit?: 22. As this benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 of Part III of the FBTAA it will be a residual benefit in accordance with section 45 of the FBTAA. | Does the benefit consist of the provision of counselling?: 23. The term 'counselling' as defined in subsection 136(1) of the FBTAA includes 'the giving of advice or information in a seminar'. 24. The Explanatory Memorandum to the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill 1987 states in Part B: 25. The services provided to employees at the 'At Work' meetings come within the definition of counselling as they involve the giving of advice or information at a meeting. | Is the counselling 'work-related counselling'?: 26. The definition of 'work-related counselling' in subsection 136(1) of the FBTAA provides that counselling attended by an employee will be work-related counselling where all the following conditions are satisfied: (a) Does the 'counselling' give effect to an objective, purpose, plan or policy devised, adopted or required to be followed, by the employer to either improve or maintain the quality of the performance of the employee's duties; or prepare employees for retirement? 27. The employers to whom this program will be offered will have an objective, purpose, plan or policy to improve or maintain the quality of performance of the employee's duties. | (b) Does the 'counselling' relate to the specified matters?: 28. The 'At Work' meetings will focus on matters relating to health and fitness (such as weight loss, healthy eating and exercise programs). Each meeting will include a confidential weigh-in, lecture and discussion. Topics such as coping with coffee breaks, surviving lunch hour, fitting exercise into a busy schedule, maintaining motivation and dealing with the effects of time pressure on eating habits will be discussed. As these topics relate to health and fitness the counselling will relate to the specified matters. | (c) Has the benefit been provided wholly or principally as a reward for services rendered or to be rendered by the employee?: 29. As the employer will not be providing the program to employees as a reward for specific achievements, or through a salary sacrifice arrangement the benefit will not be provided wholly or principally as a reward for services rendered, or to be rendered by the employee. 30. As each of these three requirements are satisfied the attendance of the employee at the 'At Work' meetings will be an exempt benefit under subparagraph 58M(1)(c)(iv) of the FBTAA. 31. Below is a detailed contents list for this Ruling: Not previously issued as a draft

Ruling: 18. The attendance of the employees of the employer at the 'At Work' meetings will be an exempt benefit under subparagraph 58M(1)(c)(iv) of the FBTAA. Commissioner of Taxation 2 August 2006


Appendix: 19. Subparagraph 58M(1)(c)(iv) of the FBTAA provides that where a residual benefit is provided in respect of the employment of an employee the benefit will be an exempt benefit if it consists of the provision of work-related counselling of the employee. 20. The employees will be attending weekly meetings on the employer's business premises. These meetings will focus on matters relating to health and fitness, such as weight loss, healthy eating and exercise programs. Each meeting will include a confidential weigh-in, lecture and discussion. | Is a benefit being provided to the employees?: 21. The term 'benefit' is defined in subsection 136(1) of the FBTAA to include: As the services to be provided to the employees who attend the weekly meetings come within this definition, a 'benefit' will be provided to the employees. | Is the benefit provided to employees a residual benefit?: 22. As this benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 of Part III of the FBTAA it will be a residual benefit in accordance with section 45 of the FBTAA. | Does the benefit consist of the provision of counselling?: 23. The term 'counselling' as defined in subsection 136(1) of the FBTAA includes 'the giving of advice or information in a seminar'. 24. The Explanatory Memorandum to the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill 1987 states in Part B: 25. The services provided to employees at the 'At Work' meetings come within the definition of counselling as they involve the giving of advice or information at a meeting. | Is the counselling 'work-related counselling'?: 26. The definition of 'work-related counselling' in subsection 136(1) of the FBTAA provides that counselling attended by an employee will be work-related counselling where all the following conditions are satisfied: (a) Does the 'counselling' give effect to an objective, purpose, plan or policy devised, adopted or required to be followed, by the employer to either improve or maintain the quality of the performance of the employee's duties; or prepare employees for retirement? 27. The employers to whom this program will be offered will have an objective, purpose, plan or policy to improve or maintain the quality of performance of the employee's duties. | (b) Does the 'counselling' relate to the specified matters?: 28. The 'At Work' meetings will focus on matters relating to health and fitness (such as weight loss, healthy eating and exercise programs). Each meeting will include a confidential weigh-in, lecture and discussion. Topics such as coping with coffee breaks, surviving lunch hour, fitting exercise into a busy schedule, maintaining motivation and dealing with the effects of time pressure on eating habits will be discussed. As these topics relate to health and fitness the counselling will relate to the specified matters. | (c) Has the benefit been provided wholly or principally as a reward for services rendered or to be rendered by the employee?: 29. As the employer will not be providing the program to employees as a reward for specific achievements, or through a salary sacrifice arrangement the benefit will not be provided wholly or principally as a reward for services rendered, or to be rendered by the employee. 30. As each of these three requirements are satisfied the attendance of the employee at the 'At Work' meetings will be an exempt benefit under subparagraph 58M(1)(c)(iv) of the FBTAA.


What this Ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, we must apply the law to you in the way set out in the ruling (or in a way that is more favourable for you if we are satisfied that the ruling is incorrect and disadvantages you, and we are not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | ... the term 'work-related counselling' is being defined under amendments proposed by clause 48 to mean, broadly, individual or group counselling (e.g., a seminar) related to matters such as safe work practices, stress management, fitness, drug or alcohol abuse or retirement problems. | Appendix 2 - Detailed contents list


Legislative references: FBTAA 1986 Pt III Div 2 Subdiv A FBTAA 1986 Pt III Div 3 Subdiv A FBTAA 1986 Pt III Div 4 Subdiv A FBTAA 1986 Pt III Div 5 Subdiv A FBTAA 1986 Pt III Div 6 Subdiv A FBTAA 1986 Pt III Div 7 Subdiv A FBTAA 1986 Pt III Div 8 Subdiv A FBTAA 1986 Pt III Div 9 Subdiv A FBTAA 1986 Pt III Div 9A Subdiv A FBTAA 1986 Pt III Div 10 Subdiv A FBTAA 1986 Pt III Div 10A Subdiv A FBTAA 1986 Pt III Div 11 Subdiv A FBTAA 1986 45 FBTAA 1986 58M(1)(c)(iv) FBTAA 1986 136(1) Copyright Act 2001 TAA 1953 TAA 1953 Sch1 357-75(1)
Subject references: exempt benefits FBT work-related counselling fringe benefits fringe benefits tax residual fringe benefit
Other references: Explanatory Memorandum to the Taxation Laws Amendment (Fringe Benefits and Substantiation) Bill 1987