Fringe Benefits Tax Assessment Act 1986
This section applies to a living-away-from-home allowance fringe benefit covered by subsection 30(1) in relation to a year of tax to the extent that the employee satisfies all of the following for the fringe benefit and the period to which it relates: (a) section 31C (about maintaining an Australian home); (b) section 31D (about the first 12 months); (c) section 31F (about declarations). 31(2)
Subject to this Part, the taxable value of the fringe benefit in relation to the year of tax is the amount of the fringe benefit reduced by: (a) any exempt accommodation component; and (b) any exempt food component.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 31(2) of the Act is modified by inserting the subsection:
For the purposes of this section, " deducted home consumption expenditure " referred to in the definition of exempt food component in section 136 is to be taken to be:
(a) in relation to a person of the age of 12 years or over - $42; and
(b) in relation to a person under the age of 12 years - $21.Example:
Calculation of the value of a living-away-from-home allowance.
Assume that a bankrupt living away from their family is given a living-away-from-home allowance of $220 a week. Of this amount, $100 represents reasonable compensation for the costs of accommodation (i.e. the " exempt accommodation component " is $100), and $80 represents reasonable compensation for the cost of food.
The remaining $40 is compensation for the disadvantage of living away from home in a town where facilities that would be available at home are not available.
Under subsection 31(2) , the exempt food component is $80 minus $42 (i.e. the compensation for increased food cost less the deducted home consumption expenditure). The value of the benefit is:
$200 - $100 - ($80 - $42) = $62
Paragraph (2)(b) does not apply to the extent that the fringe benefit relates to a period during which the employee resumes living at his or her normal residence. 31(4)
Neither paragraph (2)(a) nor (b) applies to the extent that the period to which the fringe benefit relates happens while the 12-month period referred to in subsection 31D(1) is paused.
The employer may pause that 12-month period (see paragraph 31D(2)(a) ).