And one further comment regarding the tittle of this thread.

Our clergy are never a burden on society.

Of course the mission of the church is to seek souls to be saved for the Kingdom. However the social links that are built around the church provide a huge benefit to our local communities. They are not a burden.

Heather.

John,

Your figures of $120K or $160K “grossed up” appear at first glance to be very exaggerated. It does no one any good to throw figures like this out there without any way of showing how you arrived at those figures.

Further, it’s a bit silly asking ministers to count for any reductions in school fees for their children as part of an income! Plenty of teachers working at private schools get a reduction of fees for their children that attend the school - shall we ask them to add that to their taxable income?

Housing has already been brought up as an issue of contention - there are certainly pros and cons to the clergy housing situation which mean that the actual financial benefit gained is not so easily accounted for as a raw figure on a sheet of paper.

What’s this thread about anyways? Is it that ministers are a burden on society, or that “ministers receive too high a stipend”? It seems like the latter is fast becoming the issue.

Jason,
My comments on this thread are to do with the interaction between clergy use of the fringe benefits exemption for ministers of religion and Fee help repayments.
As I said before I would be happy to be proven wrong on this.
Several commentators have argued that clergy have low incomes so that they would be liable for only a little Fee help repayments. And I agree many Christian workers live sacrificially on low incomes. (And I have no argument with low income workers not repaying fee help.) But not all christian workers’ incomes are low.
I gave an example of a minister on the minimum stipend of $49,000 salary sacrificing 30 percent of his income and receiving housing and school fee relief totalling $60,000.
I based this on a rental or mortgage allowance of $600 per week. I estimated conservatively a grossed up income of $160,000.
A minister receiving a mortgage allowance does have a property for himself at the end of his ministry career. And his children have benefited from their education.
But it does not affect my argument if we halve the grossed up value of the school fees and housing allowance to take account of the argument put by some that supplied housing is not as big a benefit as it might seem.
That leaves a minister receiving a grossed up income of $100,000 not repaying fee help.
It is this interaction between the FBT exemption and the fee help scheme I find uncomfortable. I am not arguing that ministers are paid too much, but that this double dipping is not something to our credit.

Here is the social security departments definition of grossed up income: “This means the fringe benefits value to be reported on each payment summary will factor in the income tax that would have been paid had the employee been paid in cash salary rather than in fringe benefits. This higher figure is the ‘grossed-up’ figure, which reflects the gross salary that would have to be earned to purchase the benefit from after tax dollars. For grossing-up purposes, the rate of FBT is equal to the highest marginal rate of income tax plus the Medicare levy. The grossed-up value is determined by the employer by using a formula supplied by the ATO.”

John, I may have led a very sheltered life on the wrong side of the tracks do you actually know any clergy who receive an extra $60,000 in mortgage assistance and fee relief?

[disclaimer - I write as ordained clergy who studied his BD before fee relief and who doesn’t use it for MA subjects because he hates filling out forms]

Craig,
Any minister who is supplied housing will recieve a benefit of $30,000 in a medium priced area of Sydney. Rental is often 7 or 8 per cent of a property’s value.  Some will be under this figure, some will be over. The grossed up figure will be almost double (see explanation above).  All the Sydney Anglican clergy I know would have this benefit.
It is not unusual for clergy to have 3, 4 or 5 children. I have heard of ninety per cent fee relief but YMMV. So in some cases another $30,000 can be added. Once again I know of families in this category. My guess is that clergy discount is becoming less common, however.
I believe that many/most clergy have not realised the grossed up value of what some of their fellows recieve.
Please don’t forget that the point I am trying to make is that clergy with even half the grossed up income instanced above ie a total grossed up income including stipend of $100,000 avoid paying fee help. It is this double dipping that is at the heart of this thread. When is taxpayer generosity too much?

Before I say anything, I fully support clergy education discounts. I think it is an important Christian discipline especially for the Anglican elite schools. And I think it is disgrace that a number have been moving to get rid of such discounts given the reason some were established in the first place was to educate clergy kids!

That said, Craig, note that fees for the elite Anglican schools are in the range $10-$21k per annum. Some clergy have large (even 75%+) discounts and have multiple kids (3 or 4) at these schools. Its quite feasible that some clergy are benefiting in the range $30k-$50k per annum just in school fee help alone.

[Disclaimer: My wife teaches at SASC school and my daughter’s schooling receives a staff discount].

John I think there could be some problems with your economics here.

Firstly while it is correct ministers do not pay rent they do not directly benefit from it in cash. Their actual cash flow is exactly what they receive in cash.
The other thing to consider is the high fluidity of ministerial positions where the minister of any parish is not normally there for the long term. Yes they could be placed in a high rental market area - or they could be placed in a lower income area where rents are much lower.
It seems to me that you are arguing from a point of Sydney ministry whereas the ministry of the church is a lot wider throughout Australia.

I think that any housing provided needs to be kept out of the equation when it comes to the monetary gains of a minister.

Jeremy Halcrow - 07 April 2008 01:49 PM

That said, Craig, note that fees for the elite Anglican schools are in the range $10-$21k per annum. Some clergy have large (even 75%+) discounts and have multiple kids (3 or 4) at these schools. Its quite feasible that some clergy are benefiting in the range $30k-$50k per annum just in school fee help alone.

.

I agree that it is important that clergy get some preferential treatment in Anglican schools (admission priority is possibly even more important), but at least some of the discount is available to others.  At the SASC school I am connected to (on the board plus relatives attending), we offer clergy discounts, staff discounts and sibling discounts.  So for the clergy with multiple children part of the discount would apply anyway. 
As Jeremy said, schools were often founded to provide education for clergy children, so it is only right that they get the discount.  Whether we should see this as part of the “package”, I’m not so sure.  Lots of people get discounts for lots of things (I can’t remember the last time I paid full price for an appliance), but it isn’t being provided by their employer, so it’s not seen as “package”.
J

PS What a pity they don’t offer “board member discounts to nieces and nephews”!

Jean would you see SASC staff discounts as part of a ‘package’??… personally I see clergy/school staff discounts as the same thing because they are designed to help support people committed to Christian ministry.

Craig (B),
I am discussing whether ministers should repay fee help. To compare what Joe Blow recieves in his package versus what the Rev Joe Blow recieves in a mix of stipend, salary sacrificed expenses, housing and other arrangements is far from straight forward I agree. But I don’t know another way to establish whether ministers should recieve fee help without repayment. Feel free to tear my figures apart. Perhaps you could set out how you would provide for equal treatment of those with access to FBT exemption with those who do not have it with regard to fee help.
Fringe benefits by their very nature are not cash benefits. Most graduates have to include any FB in their fee help returns but ministers do not. It is this anomaly I am addressing.
Sydang Ministers in some cases can get their mortgage paid rather than live in supplied housing. I know of one parish for example that rents out the rectory while paying the minister’s mortgage. The situation is not as clear cut as you make out.
Sadly the economics of the Sydney housing has spread across Australia.
I would be delighted if anyone here could establish that I have this clergy package scenario wrong.

If people consider the average rental return on a property to be 7 - 8% of it’s value and the median rental cost of a ‘clergy standard’ house in Sydney to be almost $600 then I really must have led an extremely sheltered life much further away from the right side of the tracks than I realised.

As a family we once had an income of $150,000 and while life is perfectly pleasant and comfortable now on an assistant minister’s stipend + allowances (for which I am very grateful) the ‘fiscal situation’ certainly does not feel the same as it did in those days.

I agree with you John that clergy should have the attitude that they will repay their Fee Help. I also agree that it should be right that the ATO have set a income thresh hold before repayments start.

As to ministerial discounts I wonder if there is a bit of peer pressure for the minister to send their kids to the local Anglican school? Could you imagine a minister sending his children to the local Catholic school which has much cheaper fees and the chiding he may cop? How many ministers do we know who send their kids to the local public school? I don’t know any myself.

There may be a few ministers whose parish pay their mortgage while they rent - there are also a few Anglican ministers who are millionaires as well - but they are not the norm.

I like this thread.  There is just something nice about thinking through these sorts of issues.

To think through how much it might cost for a rector’s housing benefit, you have to think through how much it would cost to rent a 4 bedroom house (I think clergy standard from memory is 4 bedroom + study).  If you got the study by renting a fifth bedroom, then it would get even harder to even find suitable property.

It does not take long in many suburbs to get a benefit well over $600 a week (which if it wasn’t for an FBT exemption, would gross up to $1,121 each week or $58k per year).  Of course the gross up isn’t always fair, because it assumes that all of that money would be taxed in the hands of the individual at 46.5%.

There are also as has been pointed out, many suburbs where the amount would be closer to $400 per week, and in this situation the benefit is just under $40k rather than a bigger amount.

I’m sure I could again say something about the other issues raised, but that will do for now.

Craig Bennett - 07 April 2008 02:41 PM

As to ministerial discounts I wonder if there is a bit of peer pressure for the minister to send their kids to the local Anglican school? Could you imagine a minister sending his children to the local Catholic school which has much cheaper fees and the chiding he may cop? How many ministers do we know who send their kids to the local public school? I don’t know any myself.

I’m not sure that the Catholic school was considered but ... all our MK’s go to public schools.  I know for a couple of families that the decision was that it was a theological decision.  I would imagine that our ministers would not be the only ones to make it a theological issue rather than just go with the sheep. 

Whats the experience elsewhere.

Martin

Thanks Martin. I think there are some good theological and mission issues to think through regarding schooling - particularly if there were no local Anglican schools in the area.

Peter and John another issue about the rectors housing is that the diocese has fairly strict guidelines as to the type of house the parish must provide for the minister. So is it really a FB regarding the housing issue and in reality how many ministers have 5 or more kids?

It would be interesting to see how many children on average ministers have.
And is it a real FB if the employer insists that the type of house one lives in is a job requirement?

Craig B,
If my employer insisted I drive a Rolls Royce they provided home each night, it would be still be a fringe benefit whether I wanted to drive it or not.

Craig Bennett - 07 April 2008 02:41 PM

As to ministerial discounts I wonder if there is a bit of peer pressure for the minister to send their kids to the local Anglican school? Could you imagine a minister sending his children to the local Catholic school which has much cheaper fees and the chiding he may cop? How many ministers do we know who send their kids to the local public school? I don’t know any myself.

I reckon minister’s kids are in enough of a “churchy” bubble as it is without sending them to the Anglican School as well.

Send them to the public school instead to mix with “real” kids.

Craig B,
If my employer insisted I drive a Rolls Royce they provided home each night, it would be still be a fringe benefit whether I wanted to drive it or not.

And John, it would be the employer paying the tax on it, not the employee.

Therefore really the Parish should be paying back the Fee Help and not the minister.

In the case of a normal employer FBT increases the cost to the employer. FBT does not apply to ministers so I am unsure of your logic.
My contention that the FBT exemption for ministers means they will never repay fee help does not appear to have been challenged on this thread..yet

Fee help is not a fringe benefit. It is provided by the government not an employer. But a minister could ask for an allowance to voluntarily repay it. That allowance would then be a fringe benefit. Neither the parish or the minister would pay tax on it.

I won’t get into the employment status of ministers. We will leave that fun for later.

John you worked it out that ministers were double dipping because they received housing with it being worked into their wages.
We did agree that the employer not the employee pays the FB if it was a compulsory part of the job. Therefore housing should not be considered part of your estimate of the ministers income as the provision of the house has to be provided whether the minister wants it or not.

How many people who go through theological college will also then go into full time ministry? Perhaps many or some of them will go into other vocations, where the degree will still help them earn much more money where they will be required to pay that amount.
Perhaps the question needs to be raised, do we in fact pay our ministers the right amount of money compared to the secular market where they would be payed in return for the kind of study expected them?

It has been already established on this thread that there was dialog with the government regarding this issue.  If it really is a conscience issue, then the diocese needs to put into place an allowance to be paid to the minister that causes the Fee Help to be repaid. 

The ministerial sacrifice is also something that the minister can’t get his hands on to spend as he likes. There are checks and balances for as any expenditure from it has to be in certain areas and can’t be used to pay for his wifes dental bill or holidays for example. It has to be used for his personal educational purposes as well as some other areas which I can’t remember at the moment - books, other study, expenditure for conferences etc which ministers are expected to attend and furthermore professionally stretch themselves.
It is the church that administers that account and the minister has to provide a receipt of expenditure to be reimbursed. So its not like he / she is double dipping by investing it into their super.

I don’t think you have proven that the minister is double dipping.