Edited version of private ruling

Authorisation Number: 1011651503400

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Ruling

Subject: Fringe benefits Tax - exempt benefits, religious practitioner

Question 1

Are your employees considered as religious practitioners for the purpose of section 57 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

Yes

Question 2

Are benefits provided to your employees exempt under section 57 of the FTBAA?

Answer

Yes

This ruling applies for the following period (s):

1 July 2010 to 30 June 2011

1 July 2011 to 30 June 2012

1 July 2012 to 30 June 2013

The scheme commenced on

1 July 2010

Relevant facts and circumstances

You are proposing to provide benefits to your employees.

The primary role of your employee is to provide the same religious belief as yours for the spiritual guidance within the school environment. This may involve providing general spiritual support, facilitating student discussions about religious issues, and crisis support in the case of tragedy at the school.

Your employee can also provide spiritual support and instruction to members of the school community who do not share the same religious beliefs as the employees if requested by the student's parent or guardian. School Chaplains are permitted to answer questions about their own faith and provide members of the school community with various materials to help them understand the employee's religious beliefs.

Your employees are not permitted to approach members of the school community with a view to instructing them their religious beliefs, without the consent of the parent or guardian.

In general, your employee will be:

· a member of a religious institution

· recognised by commissioning

· recognised officially as having authority in matters of doctrine and religious practice

· distinct from ordinary adherents of the religion

· has acknowledged leadership in the spiritual affairs of the religious institution; and

· authorised to discharge the duties of minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

Reasons for decision

Question 1

Summary

The School chaplains employed by you are considered religious practitioners for the purposes of section 57 of the FBTAA.

Detailed reasoning

For the purposes of claiming the exemption under section 57 of the FBTAA, the benefits provided to employees must meet the following criteria:

a) the employer of an employee is a religious institution;

b) the employee is a religious practitioner;

c) a benefit is provided to, or to a spouse or a child of , the employee; and

d) the benefit is not provided principally in respect of duties of the employee other than:
i) any pastoral duties; or
ii) any other duties or activities that are directly related to the practice , study, teaching or propagation of religious beliefs.

A The employer of an employee is a religious institution

You have received a private ruling stating that you are a religious institution for the purposes of section 57 of the FBTAA. It has been confirmed that you have neither changed nor are looking to change in the future of your operations, functions or belief structure and are continuing to conduct your affairs in the same manner as for the previous tax ruling lodged.

Therefore, this condition is met.

B The employee is a religious practitioner

Religious practitioner is defined in section 136(1) of the FBTAA to having the 'meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997).

A 'religious practitioner' is defined in subsection 995-1(1) of the ITAA 1997 to mean:

a) a minister of religion;

b) a student at an institution who is undertaking a course of instruction in the duties of a minister of religion;

c) a full-time member of a religious order; or

d) a student at a college conducted solely for training persons to become members of religious orders.

Paragraph 13 of TR 92/17 states:

In determining whether a person is a minister of religion, many, if not all, of the following characteristics should be present:

a) person is a member of a religious institution;

b) person is recognised officially by ordination or other admission or commissioning, or, where the particular religion does not require a minister to be formally ordained, the person is authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience;

c) person is recognised officially as having authority in matters of doctrine or religious practice;

d) person's position is distinct from that of the ordinary adherents of the religion;

e) person has acknowledged leadership in the spiritual affairs of the religious institution;

f) person is authorised to discharge the duties of a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

Taking each of the above criteria in turn, you satisfy each of them as follows:

(a) Is your employee a member of a religious institution?

Your employees are required to be a member or adherent of an existing recognised religious institution or have historic beliefs similar to yours.

Criterion (a) is satisfied.

(b) Is your employee recognised officially by ordination or other admission or commissioning, or, where the particular religion does not require a minister to be formally ordained, the person is authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience?

You state that your employees are officially recognised by commissioning. You submit that School Chaplains are authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience.

Criterion (b) is satisfied.

(c) Is your employee recognised officially as having authority in matters of doctrine or religious practice?

You submit that your employees are recognised officially as having authority in matters of doctrine or religious practice.

Criterion (c) is satisfied.

(d) Is the employee's position is distinct from that of the ordinary adherents of the religion?

You have stated the employee's position will be distinct in that they will be recognised as qualified. A religious practitioner will have a demonstrated, clear sense of calling or vocation to minister in schools, amongst students, their care givers and the wider community. You only recruited from those with significant experience in practical and spiritual consequences of your same religion.

Religious practitioners are required to undertake ongoing training that determined by your.

Criterion (d) is satisfied.

(e) Does your employee have acknowledged leadership in the spiritual affairs of the religious institution?

You have stated that your employees are provided with official recognition so that they can take on a leadership role in advancing the spiritual affairs within the school by being the recognised and authorised spokesperson on the particular doctrine in that environment.

Your employees are demonstrated gifts of ministering and pastoral caring, relevant training in the particular theology and being active in the local organisation.

Your employees will be encouraged to provide feedback to you on their experiences in the school system so that improvements can be made to the way in which the pastoral care is provided to students. In this way, your employee will be providing practical leadership in the spiritual affairs of the organisation.

Criterion (e) is satisfied.

(f) Is your employee authorised to discharge the duties of a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies?

Your employee would normally be asked by the school administration to officiate at all formal gatherings where a minister of religion is required.

Your employees represent the local committees consisting of denominational leaders by ministering and pastorally caring for their denomination's school aged adherents in the relevant school. Your employees will be involved in counseling members of wider school community

Criterion (f) is satisfied.

Your employees fit the description of a minister of religion, therefore, they are considered to be religious practitioners.

Question 2

Summary

The benefits proposed to be provided by you to your employees are exempt benefits under section 57 of the FBTAA as all of the required conditions have been met

Detailed reasoning

Paragraph 'c' of section 57 of the FBTAA requires that the benefits provided are provided to either the employee themselves or to their spouse or child. So far as the benefits are provided to these persons, this criterion will be satisfied.

For a benefit to be exempt, paragraph 'd' of section 57 of the FBTAA requires it must be provided principally in respect of the employee's pastoral duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs. As the employees will be employed solely to provide spiritual guidance and spiritual support to members of the school community this criterion will be satisfied.

Paragraphs 20 to 29 of TR 92/17 considers what are, and what are not 'pastoral duties' and what are 'directly related religious activities' as well as the 'provided principally' test required in paragraph 57 (d) of FBTAA.

Paragraph 21 of TR 92/17 describes 'pastoral duties' generally as duties associated with the spiritual care of the members of the congregation of a religious body and gives some examples as:

(a) communication of religious beliefs;

(b) teaching and counselling adherents and members of the surrounding community;

(c) providing adherents and members of the surrounding community with spiritual guidance and support;

(d) attendance at an in-service training seminar by a person or persons conducting the seminar, provided that the seminar is of a spiritual nature; and

(e) meeting with and visiting adherents, the sick, the poor, or persons otherwise in need of emotional and spiritual support.'

Paragraphs 22 and 23 of TR 92/17 consider that 'directly related religious activities' are the practice, study, teaching or propagation of religious beliefs as:

22. The duties or activities must be related directly to the practice, study, teaching or propagation of religious beliefs to meet the requirements of paragraph 57(d) of the FBTAA. The duties or activities may include secular activities if it can be shown that there is a direct link between those activities and the religious beliefs of the person concerned.

23. Although a full-time member of a religious order may not be involved exclusively or predominantly in pastoral duties, he or she generally is engaged in duties or activities that are directly related to the practice, study, teaching or propagation of their religious beliefs.'

Paragraph 25 TR 92/17 provides a non exhaustive list of examples of duties or activities which are not 'pastoral duties' or 'directly related religious activities' as follows:

(a) the administration of a church; and

(b) work undertaken by a director of a department of a Diocese or similar unit of ecclesiastical administration; and

(c) the administration of a school'

A review of the duties and activities undertaken by your employees are predominantly pastoral duties or directly related religious activities and the 'principally' test has been satisfied.

Since all the requirements of section 57 FBTAA are satisfied, and your employees are provided spiritual guidance and spiritual support to members of the school community, any benefits provided to them will be exempt.