General Conditions

The University reserves the right to unilaterally discontinue any of the Salary Packaging arrangements at any time.

Eligibility

Participation in the scheme is available to the University of Adelaide staff members only and is voluntary for all eligible staff members.

All continuing staff members and those with fixed-term contracts for 12 months or more may participate provided that the term of appointment is greater than the package term unless otherwise approved by the Director, Human Resources in special circumstances.

Net gains from increased take-home pay must be considered against potential tax penalties on superannuation benefits in the future and at retirement as well as the potential penalties on family assistance, rebates, Medicare levy surcharge and superannuation surcharge.

Casual staff members and staff members with a fixed-term contract of less than 12 months are not eligible to participate in this scheme.

Maximum Level

Up to 40% of fortnightly superannuable gross salary may be packaged inclusive of all packaged items and charges unless otherwise approved by the Director, Human Resources in special circumstances.

Car Parking fees can be sacrificed in addition to the standard 40% maximum.

Staff members may package one-off amounts (e.g. performance bonus) but must declare this intention up-front before the entitlement has been earned to satisfy the Government's non-retrospectivity rule.

Effect on Entitlements, Periods of Leave Without Pay and Termination

Calculation of staff member entitlements, such as overtime, annual leave loading, allowances, paid and unpaid leave, payment in lieu, redundancy payments and superannuation will be based on salary levels before salary packaging deductions are applied.

Leave without pay periods will not negate salary packaging agreements. Employees who take leave without pay must make arrangements to continue monthly motor vehicle lease payments or child care fee payments from their own resources. For superannuation arrangements during leave without pay, staff members should contact the Human Resources Service Centre on Ext 31111, to discuss available options.

The motor vehicle Novation Agreement with the University of Adelaide will cease on termination and all further lease payments are the responsibility of the staff member and have to be made to Custom Fleet direct.

Administration Cost

An administration cost charge of $260 per annum ($10 per pay) inclusive of any government taxes will apply for motor vehicle novated leases and Living Away From Home Allowances and will be processed as a pre-tax deduction from salary each fortnight.

An additional one-off administration cost charge of $130 (pre-tax) will be made for changes initiated by the staff member during a Motor Vehicle novated lease term. This administration cost charge will be in addition to the $260 ongoing charge.

An administration cost charge of $130 per annum ($5 per pay) will apply for salary packaging Child Care fees and will be processed as a pre-tax deduction from salary each fortnight.

An additional one-off administration charge of $50 pre-tax will be made for changes initiated by a staff member to Child Care fees during the 12 months package term.

Fees, where applicable, are cumulative and the University reserves the right to vary the level with appropriate notice.

Any other out-of-pocket expenses incurred by the University with regard to changes to packaging arrangements during a package term will be passed on to the employee including any Government taxes if applicable.

No administration cost is charged by the University for administering UniSuper superannuation salary packaging arrangements, but the University reserves the right to charge an amount of $50 pre-tax to defray costs for changes to packages within the 12 month package term.

Restrictions

Superannuation pre-tax contributions are available for UniSuper and Scheme A85 plans only. The SuperSA scheme in which some employees participate and which are now 'frozen', have no provision for salary packaging in their Deed. Staff in these schemes who wish to package voluntary contributions may do so to the UniSuper Award Plus Plan (formerly TESS). Private superannuation funds are also excluded at this stage.

Only one motor vehicle per employee may be leased at any one time.

Child Care fee packaging is only available for the University of Adelaide North Terrace and Waite campus child care centres, and Roseworthy Campus Child Care Centre.

Review of packages where changes are anticipated must be completed one month before the end of the package term.

Salary packaging arrangements may not be backdated.

The University of Adelaide reserves the right to terminate any salary packaging arrangement in the event of a serious breach of agreement by a staff member.

The University accepts no responsibility for any loss or disadvantage suffered by a staff member as a result of any salary packaging arrangement under this scheme.

The University retains the right to vary or rescind the Scheme and to vary the level of fees.

Legislative or statutory changes will be implemented as required and may result in change or abandonment of the Scheme if necessary.

Definitions

Custom Fleet is the University's preferred provider of motor vehicle leases.

Exempt Benefit is a benefit that is exempt from Fringe Benefits Tax.

Fringe Benefits Tax (FBT) is an indirect tax paid by employers on the grossed up taxable value ('cost') of benefits provided to employees (or their associates) in respect of their employment.

FBT Rate is currently 48.5% which is equal to the top income tax marginal rate plus the Medicare levy.

Marginal tax rate is the rate of tax applicable to the income range into which the staff member's taxable income falls.

Novated Lease refers to a three way arrangement between the staff member, the University and Custom Fleet. The staff member leases a vehicle directly from Custom Fleet. The staff member and the University, along with Custom Fleet sign a Novation agreement which stays in place for the duration of the lease whilst a staff member of the University.

Pay As You Go (PAYG) is a withholding tax system that has replaced Pay As You Earn (PAYE) and other withholding systems.

Payment Summary is the new terminology under the PAYG system for group certificates.

Reasonable Benefits Limit (RBL) is a maximum amount, indexed each year, up to which retirement monies are given concessional tax treatment. Amounts above your RBL are taxed at the top marginal tax rate including Medicare levy (currently 48.5%).

Reportable Fringe Benefits - Motor Vehicle leasing will attract fringe benefits tax and this amount is included in the total salary packaging deduction. If the taxable value of the fringe benefits you receive in a FBT year (1 April to 31 March) exceeds $2000, the grossed-up taxable value of those benefits will be recorded on your payment summary (group certificate) for the corresponding income year (1 July to 30 June).

The Australian Taxation Office incorporates reportable fringe benefits on payment summaries (group certificates) for calculation of the following:

• superannuation surcharge
•  Medicare levy
• eligibility for certain social security benefits
• rebates for contribution to spouse superannuation
• repayment of HECS debt
• child support payments
• termination payments surcharge

Salary packaging is a legal process whereby an employee, with the employer's approval, remodels existing cash salary into a combination of cash and non-cash salary.

Superannuation Contributions Tax at the rate of 15% is payable on salary packaged superannuation contributions where no PAYG tax has been paid.

Superannuation surcharge - If you make super contributions through a salary sacrifice agreement, these contributions are taxed in the super fund at a maximum rate of 15%.

Generally, this amount of tax is less than what you would pay if you did not enter into a salary sacrifice agreement and instead were subject to PAYG withholding tax on your earnings.

However, the concessional tax treatment is limited to a set amount of contributions made each income year.

Taxable benefit is a benefit that attracts Fringe Benefits Tax.

University-provided benefits are any non-cash items received in lieu of cash salary and refer to extra superannuation contributions or a Motor Vehicle Novated Lease in this context.