The purpose of this Circular is to clarify Australian Taxation Office (ATO) Ruling 98/10 'Income tax: reasonable allowance amounts for the 1998-99 income year'.

In respect of the application of taxation to allowances for staff of Ministers' offices, Host Agencies are to comply with guidelines provided by the Public Sector Management Office (PSMO). Relevant PSMO Circulars are Nos 97/33, 97/66, 98/43, 98/45 and 98/78.

Taxation of travel allowances paid to Ministers is benchmarked against members of the Federal House of Representatives and Parliamentary Secretaries. The current reasonable limit set by the ATO is $320 for a Capital City stay and $184 for elsewhere.

As Ministers of the NSW Parliament receive travel allowances below their federal counter parts, the ATO has ruled that payment is not regarded as income for taxation purposes.

Ministers who elect reimbursement of actual expenses are not affected by the ATO ruling.

Any enquiries should be directed to Kevin Hogan on 9228 4738 or email [email protected] .

Yours sincerely

C. Gellatly
Director General