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Last updated: 21 May 1997
Circular 1996/16: Frequent flyer benefits
This publication remains current but needs to be read taking into account the repeal of the old Act and the proclamation of the new Act
The purpose of this Circular is to confirm earlier advice about public servants' participation in frequent flyer schemes and the use of frequent flyer points for personal travel.
Background
The recent Federal Court decision (Janet Payne vs Commissioner of Taxation) dealt with a person working in the private sector, who used frequent flyer points accrued as a result of work-related travel to provide international and domestic travel for family members. The question was not so much the ethical nature of the action, but the tax liability for Ms Payne i.e. whether the free trips were in the nature of taxable salary. The Court decision was that the free trips were not to be considered as salary (and therefore were not taxable). It has been reported to us that some public servants are now uncertain as to how frequent flyer points may be used.
PSC Circulars 1992/12 and 1994/2 and the 1995 Guidelines on Official Conduct of Commonwealth Public Servants indicated that public servants are in breach of Regulation 37 if they use for personal benefit any free travel earned through points accrued by official travel and accommodation.
Current situation in the APS
The position to be adopted by Commonwealth public servants has not changed, i.e. any free travel resulting from frequent flyer points earned in official travel should be used only for further official travel, and not for private purposes. Where a public servant earns frequent flyer points through private travel or accommodation, he/she is entitled to use any resulting free travel for personal use.
Officers who accrue frequent flyer points through flights and accommodation both for official purposes and for personal reasons are advised to keep separate records of the trips made for work-related purposes and to ensure that any redemption of points returns to the agency.
In summary, the Federal case of Payne vs Australian Taxation Commissioner in no way changes the requirements set out in earlier Circulars and the Guidelines on Official Conduct, i.e. that public servants must not participate in frequent flyer schemes that bring personal benefits as a result of official travel.
If you have any enquiries about this Circular, please contact the PSMPC on telephone (02) 6202 3859.
Mike Jones
Managing Performance Team
July 1999
