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Stipends, Allowances & Benefits for 2001 - 6 October 2000

This circular contains details of the minimum stipends and allowances and benefits which the Standing Committee has approved for 2001. Please bring it to the attention of your parish council whose responsibility it is to determine stipends, allowances and benefits.

Included in this circular is a single page summary which has been prepared for easy reference and must be read in conjunction with the remainder of the circular. You will need to keep this circular for reference during 2001. It contains information on the latest recommended stipends, allowances and benefits grouped under the following headings.

Contents

Summary of Stipends, Allowances and Benefits for 2001  

• Definitions
• Minimum Stipends for 2001
• Pay As You Go ("PAYG") Withholding
• Stipend Sacrifice
• Superannuation Contributions for 2001
• Travelling Allowances and Benefits for 2001
• Electricity, Gas, Telephone, Hospitality, Books and Conference Costs
• Other Approved Benefits
• Housing
• Ministerial Expense Account Arrangements
• Annual Leave
• Long Service Leave
• Stipend Continuance and Workers Compensation
• Parental Leave
• Presentation and Exchange Ordinance 1988
• Part-time Pastoral Workers
• Male and Female Student Ministers
• Remuneration for Occasional Services
• Acting Ministers and Locum Tenens

Andrew Sillar
Secretary, Stipends & Allowances Committee

Summary of Stipends, Allowances and Benefits for 2001

This summary page must be read in conjunction with the remainder of this circular.

1. Minimum Stipends for 2001

Minimum stipends have increased by 5.4%. Minimum stipends for 2001 are -

Please note that payment of additional stipend is recommended. See item 2 of this circular.

Has your parish council considered these recommended additional payments?

2. Superannuation Contributions for 2001

Superannuation contributions have increased. The superannuation contributions for 2001 are -

See item 5 of this circular.

3. Travelling Allowances and Benefits for 2001

The diocesan scale has changed for 2001. The fixed component is $7457 per annum, plus a reimbursement at the rate of $145 for every 1,000 km travelled. Item 6 of this circular gives examples for various distances travelled.

4. Electricity, Water, Gas, Telephone, Hospitality, Books and Conference Costs

It is recommended that additional amounts be paid over and above the stipend. See item 7 of this circular.

5. Housing

Housing must be provided to ministers and certain assistant and lay ministers. A note has been added about the Archbishop's policy on ministers living other than in the rectory. See item 9 of this circular.

6. Part-time Pastoral Workers, Student Ministers, Acting Ministers and Locum Tenens

The recommended rates have increased for 2001. See items 16, 17 and 19 of this circular.

The recommended daily rate has increased for 2001. See item 18 of this circular.

1. Definitions

In this circular -

A minister is a priest licensed to a parochial unit (being a parish or provisional parish) as rector or curate-in-charge.

An assistant minister is a deacon or priest licensed to a parochial unit as an assistant minister or curate.

A lay minister is a person who holds an authority under the Deaconesses, Readers and Other Lay Persons Ordinance 1981 (deaconesses, parish sisters, student ministers (catechists), pastoral workers, youth workers, stipendiary lay workers, etc) and is employed on a full-time basis to assist a minister.

The minimum stipend has been increased by 5.4%. This means that the minimum stipends for 2001 are -

Notes

(a) For ministers and assistant ministers, the stipend paid should be increased above the relevant minimum stipend where-ever practicable and especially if -

(i) the minister or assistant minister has more than 2 children; or

(ii) there are abnormal demands upon the minister's or assistant minister's time arising through carrying out weddings and funerals.

The amount by which the stipend should be increased is a matter for negotiation, there being no diocesan recommendation.

(b) The amount of stipend and allowances paid by the parochial unit is taxable as income for PAYG Withholding purposes.

(c) The value of benefits provided by the parochial unit to ministers, assistant ministers and lay ministers do not have to be recorded on the group certificate (now called the PAYG payment summary) of the minister etc.

(d) If an assistant minister was previously a lay minister, the number of years of service as a lay minister shall be added to the number of years of service as an assistant minister for the purpose of calculating the minimum stipend for that assistant minister.

(e) Stipends must be paid calendar monthly, in advance, and no later than the 15th of the month unless other arrangements for the frequency and time of payment of stipends are agreed.

The Australian Taxation Office (ATO) considers that ministers, assistant ministers and lay ministers are employees or are to be treated in a similar way to employees for the purposes of PAYG Withholding. You should therefore withhold at the rates shown in the ATO's published tax tables. Withholding amounts are reported and paid to the ATO via the parochial unit's Business Activity Statement.

A minister, assistant minister or lay minister may sacrifice up to 30% of stipend to be paid into a Ministerial Expense Account (MEA). The actual amount to be sacrificed (up to the maximum 30%) is to be determined by the minister, assistant minister or lay minister involved. Arrangements for the commencement of stipend sacrifice can only be made prospectively and cannot include retrospective entitlements.

Notes

(a) This arrangement only applies to ministers, assistant ministers and lay ministers as defined in item 1 of this circular. The definition of "religious practitioner" in the Fringe Benefits Tax Assessment Act may make it difficult for part-time ministers to qualify and it is recommended that in cases of doubt, churchwardens seek professional advice. Administrative staff employed in parochial units do not qualify for these arrangements.

(b) If the sacrificed amount is paid directly into a MEA and used in the manner set out in item 10, the amount will be regarded by the ATO as an exempt benefit meaning that the amount does not have to be recorded on the group certificate (PAYG payment summary) of the minister etc.

The superannuation contributions for 2001 are -

Superannuation contributions for ministers and assistant ministers are provided by the recoveries of parish ministry/property expenses through the Synod Appropriations Ordinance. Superannuation for lay ministers is paid directly to the Sydney Diocesan Superannuation Fund (SDSF).

The superannuation contributions are in addition to the payment of a stipend not less than the minimum stipend. The contributions include the contributions for the superannuation guarantee charge (SGC).

Information about superannuation contributions and superannuation generally can be obtained from the Administrator of SDSF, Mr Kevin Stonham, on 9265 1546.

Travelling Allowance and Benefit Entitlements
A minister must be paid a travelling allowance according to the diocesan scale although a parochial unit and a minister may agree that a travel benefit be provided in lieu.

All assistant ministers and lay ministers should be paid a travelling allowance calculated according to the diocesan scale although a parochial unit and an assistant minister or lay minister may agree that a travel benefit be provided in lieu.

Diocesan Scale
The diocesan scale is calculated by reference to the average overall costs of four popular makes of vehicle in the motoring cost schedule last published by the NRMA. For 2001 that scale is a fixed component of $7457 per annum to cover depreciation, registration, insurance etc plus a reimbursement at the rate of $145 for every 1,000 kilometres travelled by the minister etc on behalf of the parochial unit which he or she serves.

Examples of the amount of the travelling allowance or value of the travel benefit from 1 January 2001 for various distances travelled are -

Distance kms	Fixed Component $	Running Costs $	Total Allowance $
5,000	7,457	725	8,182
10,000	7,457	1,450	8,907
12,000	7,457	1,740	9,197

Notes

(a) The fixed component includes a discount for private usage of a vehicle and, accordingly, should not be discounted further for private usage of the vehicle.

(b) A travelling allowance, which must be paid on not less than a monthly basis is taxable in the hands of the recipient but expenses incurred in the course of conducting pastoral duties that are "substantiated" under the Tax Act may be claimed as deductions.

(c) A travel benefit may be provided in one of the following ways -

(i) by way of fully serviced vehicle owned by the parochial unit (see note (d) in this item);

(ii) by reimbursing the minister etc for travelling expenses through the ministerial expense account (see note (d) in this item and item 10); or

(iii) by direct payment by the parochial unit of travelling expenses from the ministerial expense account (see note (d) in this item and item 10).

(d) If a travel benefit is provided to a minister etc in the manner set out in notes (c)(i), (ii) or (iii), the benefit will be regarded by the ATO as an exempt benefit meaning that fringe benefits tax is not payable and the minister etc is not liable to income tax on the value of the benefit.

Guidelines for contributions to these expenses
A parochial unit and the minister, assistant minister or lay minister should agree in advance the extent to which the parochial unit will contribute to these expenses. In determining the extent to which a parochial unit will contribute to these expenses the following guidelines apply -

• A parochial unit should contribute to the payment of electricity, water and gas expenses if the rectory or residence is used extensively for parish business.
• A parochial unit should contribute to telephone expenses by paying for rental and parish calls.
  
• A parochial unit should contribute to hospitality expenses if a clear ministry of hospitality is exercised.
  
• A parochial unit should contribute to book and conference costs to an agreed amount to the extent those costs relate to a clear ministry.

Notes

(a) A parochial unit may contribute to these expenses in one of the following ways -

(i) by paying an agreed allowance to the minister etc (see note (b) in this item);

(ii) by reimbursing the minister etc for agreed expenses through the ministerial expense account (see note (c) in this item and item 10); or

(iii) by direct payment of agreed expenses, with the minister etc reimbursing the parochial unit for any private expenditure component (see note (c) in this item and item 10).

(b) An allowance paid to a minister etc for these expenses is taxable in the hands of the recipient, but expenses incurred in the course of conducting pastoral duties that are "substantiated" under the Tax Act may be claimed as deductions.

(c) If contributions to expenses are provided in the manner set out in notes (a)(ii) or (iii) in this item, the benefit will be regarded by the ATO as an exempt benefit meaning that fringe benefits tax is not payable and the minister etc is not liable to income tax on the value of the benefit.

A minister, assistant minister or lay minister may have the following expenses paid from the amount in the MEA, to the extent that they are not already paid by the parochial unit -

• costs associated with the upkeep of the residence in which the minister lives eg insurance, rates and maintenance;
  
• education and professional development costs for the minister, including but not limited to books, tapes, conference fees, and camps;
• work related expenses including but not limited to - hospitality, subscriptions, periodicals, newspapers, computer software and hardware, provision of office furniture, office equipment and office supplies, clerical clothing, vestments, cleaning and maintenance, gifts made in relation to ministry and other expenses incurred in respect of a minister's duties;
  
• expenses for local, domestic or international travel related to the pursuit of the minister's pastoral duties and professional development (excluding holiday travel);
• additional payments to the minister's superannuation fund;
  
• expenses of the minister's spouse in directly accompanying the minister, or representing the minister on ministry related matters or where directly related to ministry;
  
• expenses of the minister's children incurred when accompanying the minister and/or the minister's spouse on ministry related matters;
  
• school fees (excluding tertiary education) of the minister's children.

In many of these categories there are expenses which are often paid by the parish in addition to the minister's stipend and allowances. Examples are energy costs, telephone expenses and hospitality. These arrangements should be continued with the parochial unit paying the expense directly to the supplier or by reimbursement to the minister.

If expenses are paid or reimbursed through a MEA in the manner set out in item 10, the benefit will be regarded by the ATO as an exempt benefit meaning that fringe benefits tax is not payable and the minister etc is not liable to income tax on the value of the benefit.

Guidelines for the Provision of Housing
Housing must be provided to ministers and should also be provided to assistant ministers and lay ministers. The parochial unit may do this -

(a) by providing rent free accommodation as approved by the Archbishop (this must be done for a minister); or

(b) by paying an agreed housing allowance to the assistant minister or lay minister (refer to the note in this item); or

(c) by directly making payments to a landlord from a ministerial expense account (refer to the note in this item and item 10) in respect of rent payable for a property in which the assistant minister resides; or

(d) by directly making payments to a lending authority from a ministerial expense account (refer to the note in this item and item 10) in respect of a loan to the assistant minister or lay minister concerned, such loan having been taken out for the purposes of acquiring the property; or

(e) by reimbursing the assistant minister or lay minister concerned from a ministerial expense account (refer to the note in this item and item 10) for a payment made by the person to a lending authority in respect of a loan taken out for the purpose of acquiring the property.

Notes

(a) If housing is provided in the manner set out in paragraphs (a), (c), (d) or (e), the benefit will be regarded by the ATO as an exempt benefit meaning that fringe benefits tax is not payable and the recipient is not liable to income tax on the value of the benefit. If housing benefits are provided in the manner set out in paragraph (b), the allowance will be taxable income to the recipient and it is unlikely that deductions can be claimed.

(b) The Archbishop has indicated that he will carefully consider an application for a minister to live other than in a parish owned rectory, provided that the parish maintains ownership and availability of a rectory standard residence.

Guidelines for the Operation of Ministerial Expense Accounts
The ministerial expense account arrangements referred to in items 4, 6, 7, 8 and 9 require the establishment of a ministerial expense account (MEA) for each minister, assistant minister or lay minister. The arrangements are optional. From this account, the parochial unit may make direct payments of the expenses referred to in items 6, 7, 8 and 9 or reimburse the minister etc for such expenditure. In administering ministerial expense accounts, the following principles apply -

(a) All amounts transferred to a MEA, for whatever reason, form one single pool of funds and may be used for the direct payment of, or the reimbursement for, any expenses of the minister etc which are directly related to ministry. Expenses which are directly related to ministry include the expenses referred to in items 6, 7, 8 and 9.

(b) The MEA need not be a separate bank account - it can be a separate ledger account in the churchwardens' accounts. If a separate bank account is used (which is preferable), the minister etc, must not be able to operate the account on the basis of his or her own signature. The minister may be a co-signatory (with, for example, one or more of the churchwardens) but not the sole signatory.

(c) Any balance in the MEA is the property of the parochial unit. Any interest earned on the MEA (if a separate bank account) is church trust property and must be accounted for by the churchwardens.

(d) Where a separate bank account is maintained, amounts should be transferred to the MEA on a periodic basis to enable the permitted expenses to be met. If a separate bank account is not opened, the churchwardens must ensure that the balance in the parochial unit's bank account is sufficient to enable permitted expenses to be met.

(e) Any amount paid to a minister etc from a MEA will be taxable in the recipient's hands unless it reimburses the recipient for ministerial expenses which the recipient has incurred. If the minister etc -

(i) moves to another parochial unit, any balance of the MEA not paid into a MEA operated by the new parochial unit is to be paid to the minister etc and will attract income tax;

(ii) moves into retirement or to a secular position, any balance of the MEA not used to meet agreed expenses is to be paid to the minister etc and will attract income tax although concessional tax treatment may be available in some circumstances (professional advice should be obtained); or

(iii) dies, any balance of the MEA not used to meet agreed expenses of the minister or the estate is to be paid to the estate and will attract income tax although concessional tax treatment may be available in some circumstances (professional advice should be obtained).

(f) Receipts for expenses must be kept for parish audit purposes and for 7 years after so that if the minister or parochial unit is the subject of a tax audit, proof exists that payments to the minister were to reimburse for expenses incurred.

(g) If a MEA is used to pay travelling expenses or to reimburse a minister etc, for travelling expenses incurred, the account may build to a sizeable sum over a few years. If this sum is paid to the minister etc it will be taxable income in the recipient's hands. If the sum is used to pay part or all of the purchase price of a new vehicle at the appropriate time or to pay or reimburse repayments of a loan taken out by the minister etc to finance the purchase of the vehicle the payment will not attract income tax and is exempt from fringe benefits tax.

(h) A parish may consider making use of a credit card for those expenses which may be paid from the MEA.

Entitlement for Ministers and Assistant Ministers
Under the Annual Leave Ordinance 1983, ministers and assistant ministers are entitled to 4 weeks annual leave for each period of 52 weeks during which the minister or assistant minister is licensed to a parochial unit. Generally, annual leave must be taken -

(a) before the expiry of 2 years after the date on which the leave entitlement accrued;

(b) as far as possible after consultation with the churchwardens or, in the case of the Dean, with the St Andrew's Cathedral Chapter; and

(c) as far as possible only where suitable arrangements have been made for a person or persons to perform the minister's or assistant minister's duties in that person's absence.

During any period of annual leave, a minister or assistant minister must be paid his or her ordinary stipend and be provided with any allowances or benefits to which he or she may be entitled.

Entitlement for Lay Ministers
Under the Annual Holiday Act 1944, a lay minister is entitled to 4 weeks leave at the end of each year of the lay minister's employment with the parochial unit. The lay minister must be paid his or her stipend during the period of annual leave and receive allowances or benefits to which he or she may be entitled.

Annual Leave Loading
Having regard to common community practice, a loading on annual leave may not be considered appropriate. However, persons employed under an award will be entitled to the payment of an annual leave loading if the award so prescribes.

Ministers, Assistant Ministers and Deaconesses
Ministers, assistant ministers and deaconesses are entitled to long service leave under the Long Service Leave Canon 1992. In general terms, the leave entitlement is 10 weeks for 10 years of service. Entitlements may be carried from one parish or organisation to another if the required contributions are paid to the General Synod Fund.

The annual contributions to the General Synod Fund are presently paid by the Synod and are recovered from parochial units by way of the recoveries of parish ministry/property expenses through the Synod Appropriations Ordinance. When a minister or an assistant minister takes long service leave, the parochial unit must pay the stipend, allowances or benefits at the current rate and a claim is made on the General Synod Fund through the diocesan office. The proceeds of the claim are paid to the parochial unit to be used to engage temporary assistance while the person is on leave. A supplementary allowance is paid to ministers, assistant ministers and deaconesses on leave.

Further details on the operation of the General Synod Fund can be obtained from Mr Kevin Stonham on 9265 1546.

Lay Ministers
Lay ministers are entitled to long service leave under the Long Service Leave Act 1955 and the Long Service Leave Ordinance 1973. Generally, the leave entitlement is 13 weeks for 15 years of service but leave can be taken pro-rata after 10 years. When a lay minister takes long service leave, the parochial unit must pay the stipend, allowances and benefits at the current rate.

The requirements laid down by the Standing Committee under the Long Service Leave Ordinance 1973 include the following -

(a) The churchwardens of the principal church in each parochial unit must certify in their annual return that adequate provision has been made to cover any liability the parochial unit may have for long service leave.

(b) If a lay minister transfers to another parochial unit or organisation constituted by ordinance or resolution of Synod, the parochial unit concerned must pay to the parochial unit or organisation to which the lay minister is transferring, 2% of the product of the salary (per annum) of the lay minister at the time of the transfer and the period of his or her continuous service in parochial units and/or organisations in the Diocese, expressed in years and fractions thereof.

Ministers and Assistant Ministers
Ministers and assistant ministers are not "workers" for the purposes of the Workers Compensation Act and, accordingly, are not entitled to benefits under that Act.

If a minister or an assistant minister is unable to perform his or her duties due to sickness or accident, the parochial unit must continue to pay the agreed stipend until the minister or assistant minister recovers or a course of action can be mutually agreed upon (eg. early retirement, superannuation etc).

Where a minister or assistant minister, under the age of 65, suffers a permanent disability, the Stipend Continuance Plan (SCP) provides the minister or assistant minister with an amount equal to 75% of the minimum stipend applicable at the date of the disability. Payments under the SCP commence 6 months after the permanent disability occurs and continue until age 65 or earlier death. Payments are indexed in line with the annual movements in CPI or at the rate of 5% per annum, whichever is the lesser.

The SCP does not cover expenses (such as medical or hospital) which are incurred by a minister or assistant minister and so each minister and assistant minister should ensure that they have adequate medical and hospital cover. A basic cover is provided by Medicare.

Enquiries about the SCP should be made to Mr Kevin Stonham, on 9265 1546.

Lay Ministers
As lay ministers are workers, the churchwardens must take out workers compensation for all lay ministers. This is a legal obligation which is not negotiable.

14. Parental Leave

All lay ministers with at least 12 months of continuous service are entitled to maternity leave, paternity leave or adoption leave (as appropriate) under the Industrial Relations Act 1996. Enquiries about this leave should be made to Mr Andrew Sillar, on 9265 1686.

Parishes are reminded that under clause 8(a) of the Presentation and Exchange Ordinance 1988 a parish may elect parish representatives to the Presentation Board only if during the 12 months immediately before the election, the minister was paid at least the minimum stipend, was paid a travelling allowance or provided with a travel benefit in accordance with the diocesan scale and was provided with rent free accommodation approved by the Archbishop. If a minister is to move to another residence, the approval of the Archbishop must be obtained before the move if the right of presentation is to be retained. Under clause 15(a), a parish only has rights of presentation if during the period from the election of the parish representatives until the occurrence of the vacancy, the rector was paid the amounts previously mentioned in this item.

The following guidelines apply for part time pastoral workers, whether clergy or lay, who are remunerated for their services -

(a) Subject to any relevant award, the worker should be paid at the rate of $130 per day.

(b) The worker should be paid a travelling allowance at the rate of 65 cents per kilometre for kilometres travelled in performing their duties.

(c) Other allowances, such as housing, should be provided in appropriate circumstances.

The recommended remuneration for male and female student ministers for 2001 is  -

Notes

(a) Transport costs (whether private vehicle or public) should be paid by the parochial unit. Where extensive travel time is involved, consideration should be given to paying for the travel time.

(b) Where a student minister serves for a half day in addition to a full day, account should be taken of the additional time and cost in travelling and care taken to ensure that the student minister is not disadvantaged by the additional expense.

(c) Arrangements should be made to ensure student ministers are provided with appropriate hospitality. For example, appropriate breaks should be provided especially in long working days.

(d) Preparation time adds to the total time incurred in service for the parochial unit and should be allowed for when the amount of payment is considered.

Recommended Rates
The recommended rates for clergy who take occasional services are -

Notes

(a) This item applies to assist in determining the remuneration to be paid by a parochial unit to a member of clergy, not licensed to that parochial unit, who takes a service in a church in that parochial unit. This item does not condone fees commonly known as surplice fees.

(b) If the total return journey of the person taking the occasional service is not more that 75 kilometres a travelling allowance of 65 cents per kilometre must be paid. If further kilometres are travelled, the amount of the travelling allowance should be determined at a rate mutually agreed upon between the parochial unit and the clergy concerned.

(c) Meals should be provided where necessary.

(d) As pension benefits may be reduced according to other income received, the recommended rates are open to negotiation between the clergy and the parochial unit.

(e) Where a minister etc is invited to take, or assist in, services in a church outside their parochial unit any payment for the services of that minister etc should be made to the parochial unit to which the minister etc is licensed or employed rather than to the minister etc himself or herself.

The daily rate is $130 but is subject to negotiation by the parties concerned. An adequate amount for reimbursement of travelling costs must be negotiated.

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