FBT changes to hurt NFPs

The head of Community Employers WA, a representative body of 130 not-for-profit employer organisations in the community service sector, has expressed concerns for NFPs over restrictions to Fringe Benefit Tax concessions.

Executive director John Bouffler told Business News the introduction of a $5,000 cap on the FBT concessions for salary sacrificed meals and entertainment allowances, flagged last May as part of the federal budget, was not supported by the sector.

“It is seen as a further erosion of the capacity of employers to attract and retain workers,” Mr Bouffler said.

Many NFP employers use the meals and entertainment allowances in part to compensate those who are paid at a lower level than workers in a corporate setting or government departments, he said.

However, the cap appears to have been put in place following excessive claims from a small minority of people in the health sector.

“The perhaps unintended consequence of this has been that all employees across the NFP community services sector are to be penalised,” Mr Bouffler said.

“Unfortunately the vast majority of NFPs will not have the financial capacity to compensate staff for the reduction in benefits.”