(As advised in Circular 2002-61, salary packaging was extended to non-SES staff with effect from 1 January 2003. Agencies have the choice of either administering salary packaging in-house (provided it is cost-neutral to the agency) or using McMillan Shakespeare Australia Pty Ltd (MSA), which has a government contract to supply such a service.

Among benefits allowed to be packaged is a motor vehicle for 100 per cent private use that is subject to a Deed of Novation. A Deed of Novation is an agreement signed by three parties - the employee, the organisation financing the motor vehicle and the employer. It assigns to the employer responsibility for meeting the lease payments while the user of the motor vehicle remains an employee. These payments are deducted from the employee's salary.

Agencies are reminded that the Government requires that only the Deed of Novation as approved by the Crown Solicitor should be used for such arrangements. Please ensure that officers authorised to sign Deeds of Novation on behalf of the employing agency observe this requirement.

A copy of the approved Deed of Novation is attached.

C Gellatly
Director-General

Issued : Workforce Capability ( Public Employment Office)
File no: PSM/00361
Date: 11 December 2003