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Edited version of private ruling
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Ruling
Subject: living away from home allowance
Is the allowance shown on your payment summary assessable income?
No.
This ruling applies for the following period
1 July 2009 to 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You were employed by a company for the 2009-10 income year.
You were employed under a collective agreement and this agreement was made pursuant to the Fair Work Act 2009.
The collective agreement states living away from home allowance (LAHA) shall be paid from 1 April 2009 and increased from 1 April 2010 to cover the disabilities associated with isolation, accumulating days off and the lack of normal amenities of town or city dwelling. The allowance is also full compensation for disabilities associated with sharing accommodation and the type of facilities and living conditions available when working in a specified location.
Your time sheet has provision to claim LAHA, pay slips show LAFHA as being paid and this amount has been excluded when calculating taxable gross amount for the period.
Reason for decision
Subsection 30(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) states:
If:
(a) at a particular time after 10 October 1991, in respect of the employment of an employee of an employer, the employer pays an allowance to the employee; and
(b) the employee's usual place of employment is on an oil rig, or other petroleum or gas installation, at sea; and
(c) the employee is provided with residential accommodation at or near that usual place of employment; and
(d) the allowance is expressed to be paid as a living-away-from-home allowance; and
(e) no part of the allowance is covered by subsection (1); and
(f) it would be concluded that the whole or a part of the allowance is in the nature of compensation to the employee for disadvantages to which the employee is subject, during a period, by reason that the employee is required to live away from his or her usual place of residence in order to perform the duties of that employment;
the payment of the whole of the allowance constitutes a benefit provided by the employer to the employee at that time.
In your circumstances, from the facts provided, the FBTAA subsections 30(2) (a),(b),(c),(e) and (f) are clearly met with subsection (d) requiring clarification.
ATO Interpretative Decision (ATO ID) 2004/706 and ATO ID 2005/314 identify paragraph 30(2)(d) of the FBTAA as requiring that 'the allowance is expressed to be paid as a living-away-from-home allowance'.
The Macquarie Dictionary [Multimedia], version 5.0.0, 1/10/01 defines 'express' as:
8. clearly indicated; distinctly stated (rather than implied); definite; explicit; plain.
Under the workplace agreement, on the payslip and as approved on the time sheet, the allowance is shown as a living away from home allowance.
Accordingly, the allowance is expressed to be paid as a LAFHA and paragraph 30(2)(d) and subsection 30(2) of the FBTAA are satisfied. Therefore under the provisions of section 23L of the Income Tax Assessment Act 1936 the living away from home allowance paid to you is not assessable income.