Member Q&A: Provision of free flu vaccination to employees

Question

Our organisation provides employees with a free flu vaccination.

The program is available to all employees. Employees apply for a voucher from us which they can use to receive a flu vaccination at their local pharmacy. The voucher is purchased by Council and provided on a no-charge basis to the employee.

Does this program attract FBT?

Answer

A benefit is being provided to employees in the form of flu vaccination voucher that has been purchased by Council to give to employees. If this is the case then a residual benefit arises in our view should an employee make use of the voucher and obtain a flu vaccination.

However, section 58M of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) provides an exemption from FBT for any ‘work-related preventative health care’ of the employee. This term is defined in subsection 136(1) of the FBTAA to (basically) mean any form of care provided by, or on behalf of a legally qualified medical practitioner, nurse, dentist or optometrist to prevent work-related trauma provided it is not excluded from other employees:
(a) who are likely to be at risk from similar work-related trauma
(b) who work in close proximity to those employees who are suffering from the trauma, or
(c) who perform similar duties to those employees who are suffering from the trauma.

The program appears to be open to all employees but it is our understanding a pharmacist is not considered a legally qualified medical practitioner and so prima facie the section 58M exemption won’t be available unless the vaccination is administered by a nurse or it is administered on behalf of a legally qualified medical practitioner or nurse.

The phrase “on behalf of” requires a relationship between the two parties such that one party is acting in place of or as representative of the other. At present there is insufficient information as to who is administering the flu vaccination for us to conclude that the section 58M exemption is available. The employer should ascertain from the party selling the vouchers as to qualifications of the person providing the vaccination in order to determine if section 58M is met.

If the section 58M exemption is not available then it may still be possible to rely on the section 58P minor benefit exemption where the cost of the voucher is less than $300 per employee given it is a one-off type benefit (administered once a year) and it is not provided by way of a salary packaging arrangement.

Need more guidance on this topic or have any other questions? Please ask us via the Q&A portal.

If you would like to become a member, please contact us at admin@taxed.com.au.

Subscribe to our newsletter for more updates and articles.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.