Fringe Benefits Tax : Child Care Facility Exemption

Whether the provision of a benefit that consists of the care of a child who is six years of age or older, in an after school facility which is ready to receive children under the age of six and is located on an employer's premises, is an exempt residual benefit under subsection 47(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

Yes. A benefit that consists of the care of a child who is six years of age or older, in an after school facility which is ready to receive children under the age of six and is located on an employer's premises, is an exempt residual benefit under subsection 47(2) of the FBTAA.

The employee is a current employee.

After school care is provided to the employee's child who is six years of age.

The after school care facility is located on the employer's premises and is a facility that is ready to receive children under the age of six.

The exemption under subsection 47(2) of the FBTAA applies to a residual benefit that consists of the provision of care of children of a current employee in a child care facility that is located on business premises of the employer.

Subsection 136(1) of the FBTAA defines " child " as in relation to a person, includes an adopted child, a step-child or an ex-nuptial child of the person.

Subsection 136(1) of the FBTAA defines " child care facility " as a facility at which a person receives, or is ready to receive two or more children under the age of six, for the purpose of minding or caring without provision for residential care.

The age of any particular child attending the centre is irrelevant, as the definition of a "child" does not mention any age. As long as the centre meets the requirements of a "child care facility", the concession would apply regardless of the age of any particular child being cared for. The facility qualifies even if it is empty or there are no children attending who are under the age of six however the facility must be ready to receive a minimum of two children under six years of age. This means that the centre must have available staff and facilities which are required under applicable State and Territory legislation in order to be licensed to provide care to two or more children under six years of age.

Consequently, where a "child" (as defined) is cared for in a "child care facility" (as defined), the benefit would be an exempt residual benefit under subsection 47(2) of the FBTAA.