My wife and I recently downsized significantly and in doing so were able to pay off our mortgage in full. Prior to this I have been salary packaging our mortgage ( I work for a public hospital). In discussing this with our salary package provider they informed me I could still claim the mortgage for future years despite having paid it off as a lump sum. I would have thought that I would need to switch to an alternate payment to package.
Hi @henry1990,
Are you asking if salary packaging a paid-off mortgage still counts as an exempt benefit under FBT rules?
If the mortgage is fully paid, salary packaging it may not follow the rules anymore.
This means without ongoing payments, it might not be valid. Even if your provider reports it, the value could still appear as a Reportable Fringe Benefits Amount (RFBA), which can affect things like Medicare levy, HELP/HECS repayments, and family benefits.
If the packaging isn’t based on real payments, it could cause tax issues.
You can have a read through salary sacrificing for employees.
It’s best to ask your provider how they’re handling it and speak with a registered tax agent.
You may need to switch to packaging something else, like rent or school fees.
22 Apr 2024 · 6 min read time
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