Catholic Social Services Australia chief Frank Quinlan says proposed government changes to tax laws will hit low paid charity and church workers who could lose up to $50 a week in net salary benefits.
"This is a very substantial impact on people who are often doing some of the hardest work in the charities and community sector," Mr Quinlan told ABC Radio.
"The people who will be hit hardest by the proposed changes are providing crucial services in the charitable sector. They often work because they are committed to helping the public even though they could attract higher salaries in private industry or the public sector," Mr Quinlan said.
Mr Quinlan said charities and other non-government organisations have used salary packaging to compensate workers for low wages.
"The changes will have the biggest impact on workers with children," Mr Quinlan said.
"Many workers and families with salary packages could be out of pocket by as much as $50 a week or more. This is especially significant in the face of the rising cost of petrol, food and housing.
"We are already under great pressure to attract and retain workers, because of low salaries across the sector.
"These changes will make it much harder for our agencies to retain these workers in our struggling workforce.
"Many employees of charitable organisations can currently package up to $16,049 of their salary effectively increasing a salary of $45,000 to $52,149 in the marketplace.
"But under the proposed legislation, a salary of $45,000 will be deemed to be $58,951 for the purpose of determining eligibility to government benefits. This change will effectively treat low income people as if they are earning an income which would be taxed at the top tax marginal rate. Currently, people on over $150,000 are taxed at this rate," Mr Quinlan said in a statement.
Community Services Minister Jenny Macklin said the government was looking into the matter.
"We were only made aware of the impact on a wide range of people, particularly in the non-government sector, fairly recently," Ms Macklin said.
"We've certainly asked the Department of Families, Housing and Community Services to look into the issue and to provide us with advice as to how we might address this issue."
SOURCE
Union seeks fringe benefit tax changes (Sydney Morning Herald, 18/6/08)
Fringe benefits changes to hit low paid workers (ABC News, 17/6/08)
Low-paid workers hit by tax changes (Sydney Morning Herald, 17/6/08)
Tax changes will damage charitable sector (CSSA, Media Release, 17/6/08)
LINKS
Catholic Social Services Australia