Apologied if this has been asked before, i couldn't find a definitive answer. My wife is working in a public hospital and was able to salary package our mortagage payments. But recently they rejected the statement the reason being we take too many redraws. Our mortage account allows unlimited redraws of any extra payments we make into our loan account. So we make use of it and add extra funds whenever we can a take them out when needed. This doesn't affect the regular loan payment in anyway and we can't take it out, only the extra payments. This is the explanation from them for rejecting it..
The salary packaging ruling states you can only make up to 2 redraws a year for renovation/refinance purposes. When you start to make regular withdrawals from your mortgage account, this is then considered as cash advances and these are loan redraws cannot be salary packaged. This is a ruling we have been set to follow by our external auditors as per the advice of the ATO regarding line of credits on mortgage accounts. Mortgage accounts with a redraw facility can be claimed, however where there is a line of credit for regular redraw, this is considered no different to packaging an everyday account, where regular redraws are being made. You need to be paying off your loan without making redraws to be considered paying the benefit off, otherwise it would be no different an employee submitting their everyday expenses account and salary packaging the purchases against their salary and wages.
We neither take any extra funds nor there is a line of credit. As per my understanding the slaray packaging can be done on accounts with redraw facility if it doesn't constitute new borrowing of funds, or it causes extra repayments.
Cloud you please clarify?
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