MINISTRY EXPENSE ACCOUNTS
A Ministry Expense Account is an account held by a parochial district on behalf of a clergyperson or ministry team member (i.e. ministry workers) into which money may be credited by the parish free of income tax, and from which agreed expenses may be paid.
The items which may be paid into a ministry account are:
- Allowances – travel (fixed and per kilometre), technology, book
- Any housing allowance that may be paid to a minister
- An agreed amount of stipend sacrifice (up to a maximum of 40%)
Stipend Sacrifice Arrangements
A stipend sacrifice arrangement is one where a ministry worker foregoes the payment of a portion of their cash stipend. In return, the Parish Council agrees to make certain payments to third parties on behalf of ministry workers. The value of the payments to be made shall not exceed the money held in the Ministry Expense Account at any given time.
It is important to note that while such benefits made to ministry workers are exempt from income tax, payment summary reporting and fringe benefit tax, social security and family assistance legislation may take the value of many of these benefits into account when assessing eligibility for income support payments and other benefits. The “Centrelink Benefits Assessment Guide” prepared by the Sydney Diocese is very helpful in this regard and can be found at https://www.sds.asn.au/ministry-staff-remuneration-related-benefits
Expenses that may be paid from a Ministry Expense Account
The type of expenses that may be paid from a ministry expense account include (but are not limited to):
- expenses in relation to the purchase, financing and operating costs of a motor vehicle (including a bicycle) used for ministry purposes; expenses for local, domestic or international travel related to the pursuit of the clergy’s or ministry staff’s pastoral duties and professional development; expenses of the clergy’s or ministry staff’s spouse and/or children in accompanying the ministry worker on ministry-related matters; and, expenses of the clergy and ministry staff’s spouse in representing the ministry worker on ministry-related matters;
- the costs associated with the provision or upkeep of a home in which a ministry worker is living, a holiday home or a home for retirement (one only). For example, loan repayments, utility costs, local government rates, home and contents insurance and building maintenance;
- education, professional development, supervision, mentoring and professional de-briefing costs for ministry workers, including but not limited to books, DVDs and conference fees;
- ministry-related expenses, including but not limited to telephone, mobile telephone, internet services, subscriptions, periodicals, newspapers, computer hardware and software, clerical shirts and attire, gifts made in relation to ministry (for example, offertories and gifts to mission organisations);
- the education expenses of dependent children;
- private health insurance premiums for the ministry worker and their family;
- personal contributions to superannuation; and
- other expenses of ministry workers that are approved by a Parish Council or the equivalent body.
Associated Administrative Arrangements
The following administrative arrangements are to apply to ministry expense accounts:
- Each year the beneficiary of a Ministry Expense Account is to enter into an agreement with their parochial district which sets out what allowances and stipend sacrifice amounts are to be put in the Ministry Expense Account, and what items this money may be spent on at the request of the beneficiary. It is recommended that this agreement be renewed in July each year to coincide with the first pay period after the annual update of clergy stipends and allowances.
- All amounts transferred to a ministry expense account, for whatever reason (vehicle allowance, book and technology allowance and salary sacrifice amounts), are to form one single pool of funds and may be used for the direct payment of, or the precise reimbursement for, any agreed expenses.
- The ministry expense account need not be a separate bank account, but should be a separate line item in an agency’s, parish’s or special district’s chart of accounts. If it is held as a separate bank account, clergy and ministry staff must not be able to operate the account on their own account but can be a co-signatory.
- When a ministry worker finishes their employment with their parochial district, the balance of their Ministry Expense Account may be transferred to their new ministry employer (if indeed they have moved to another paid ministry position). Otherwise the balance is to be paid to the ministry worker as taxable income.
- While ever a parochial district holds money in a Ministry Expense Account on behalf of a ministry worker, it must record the balance in its books as a liability owing to the ministry worker.
- Money can be paid by a parochial district from a Ministry Expense Account on behalf of a ministry worker by:
- A payment direct to a third party on the production of an invoice.
- A payment to the ministry worker for expenses they have incurred from the agreed list of expenses. In this case, receipts need to be produced to verify these claims. It is recommended that such claims be submitted by the ministry worker once a month.
- A ministry worker may be given a credit card in the name of the parish which they can use for proposed ministry expense purchases. However, a transfer from the Ministry Expense Account to pay off the monthly credit card bill should only be done upon the receipt of a return from the ministry worker giving a receipt from every item of expenditure and checking these items against the list of agreed expenditure items. If the return and receipts are not received, then the monthly credit card bill should be paid from general parish funds (if that is possible), and an invoice issued to the ministry worker for that amount. If there are insufficient funds in the Ministry Expense Account to pay off the monthly bill, then the balance should be paid from general parish funds (if that is possible), and an invoice issued to the ministry worker for that amount.
- Payments to a financial institution or to a ministry worker for loan repayments relating to the purchase of an agreed item. In this case documentation should be supplied to the treasurer to establish the existence of the loan and the required repayment amounts. Repayments from a Ministry Expense Account towards a loan should not exceed the required repayment amounts.
- As described above, Clergy and ministry staff should supply their parish treasurer with documents to support expenses claimed from a Ministry Expense Account. If such documents are not supplied, the payment to clergy or ministry staff should be treated as a taxable allowance.
- Documents should be kept for audit purposes for five years so that if the ministry worker is the subject of a tax audit, proof exists that payments to clergy and ministry staff were precise reimbursements for expenses incurred.
- The accumulated balance in a ministry expense account can be carried forward from year to year and may, for example, be used to pay for major ministry-related expenses such as the purchase of a new motor vehicle.
- Ministry expense accounts are not to be reimbursed for any input tax credits that accrue in relation to GST paid on ministry-related expenses. These are to accrue to the Diocese, agency or parochial district by whom the clergyperson or ministry staff person is engaged.
Guidelines for the use of Ministry Expense / Salary Sacrifice Account Money
In the Armidale Diocese the type of expenses that may be paid from a minister’s expense account include (but not limited to):
- expenses in relation to the purchase, financing and operating costs of a motor vehicle (including a bicycle) used for ministry purposes; expenses for local, domestic or international travel related to the pursuit of the clergy’s or ministry staff’s pastoral duties and professional development; expenses of the clergy’s or ministry staff’s spouse and/or children in accompanying the clergy or staff member on ministry related matters; and, expenses of the clergy and ministry staff’s spouse in representing the clergy or ministry staff member on ministry related matters;
- the costs associated with the provision or upkeep of a home in which a clergy person or ministry staff member is living, a holiday home or a home for retirement (one only). For example, loan repayments, utility costs, local government rates, home and contents insurance and building maintenance;
- education, professional development, supervision, mentoring and professional de-briefing costs for clergy and ministry staff members, including but not limited to books (where their cost exceeds the Diocesan prescribed book and technology allowance), DVDs and conference fees;
- ministry related expenses including but not limited to telephone, mobile telephone, internet services, subscriptions, periodicals, newspapers, computer hardware and software (where the costs exceed the Diocese’s book and technology allowance), clerical shirts and attire, gifts made in relation to ministry (for example, offertories and gifts to mission organisations);
- the education expenses of dependent children;
- private health insurance premiums for the clergy or ministry staff member and their family;
- personal contributions to superannuation; and
- other expenses of clergy and ministry team members that are approved by a parish council or the equivalent body.
Why can’t a minister use their ME/SS account to make mortgage repayments in excess of the required amount?
First, some background on the way the Salary Sacrifice system works:
A stipend sacrifice arrangement is one where a ministry worker foregoes the payment of a portion of their cash stipend. In return, the Parish Council / Diocese agrees to make certain payments to third parties on behalf of ministry workers. (Quoted from the FAQ Ministry Expenses document on the Diocesan website)
The reason salary sacrifice payments are free from tax is because rather than getting money, the parish / diocese is providing you with a non-cash fringe benefit (and the church is exempt from Fringe Benefit Tax for pastoral workers). So, for a payment out of your ME/SS account to qualify as a fringe benefit, it needs to be an “Expense payment fringe benefit”. The ATO defines them as follows:
An expense payment fringe benefit may arise in either of two ways:
- you (the employer) reimburse an employee for expenses they incur
- you pay a third party in satisfaction of expenses incurred by an employee.
So, if the parish/diocese were to pay your scheduled mortgage repayment for you, or were to reimburse you for it, then that would be an expense payment fringe benefit.
However, to pay in excess of the required repayment amount is doing more than paying (or reimbursing you for) a bill you owe, and indeed, with a redraw account, that extra money is available to you, in one of your bank accounts, as cash regardless of whether you choose to withdraw that money from the account or not. This would mean that the amount in addition to the required repayment is not an expense payment fringe benefit, and should be reported to the ATO by the parish/diocese as taxable income.
3 July 2019
Clergy and Ministry Staff Housing
As stated in the Parish Governance and Administration Ordinance 2015, it is expected that parochial districts in particular will provide housing for an Incumbent and any other clergy ministering in a parochial district. In the event that the Diocese, parish or special district does not have a property for a clergyperson or ministry worker to live in, they, provided the Bishop, or, in his absence from the Diocese or a vacancy in the See, the Vicar-General, and the parish or special district have given their consent, may live in their own home and receive a housing allowance. The allowance should be at least two-thirds of the rent the vicarage in the parochial district in which they serve or nearest to where they are, or intend, living could attract if rented.
(Diocesan Council, 5 May 2015)
No tax is payable on the Housing Allowance if it is paid directly to a financial institution or to the clergyperson’s Ministry Expense Account. Where is it paid directly to the clergyperson, it is to be treated as taxable income.
All full-time stipendiary staff engaged by parishes and special districts are entitled to the following:
- four weeks annual leave which is not cumulative past the end of the year following the year in which it is accrued. That is, leave, for example, accrued in the year to 31 December 2018 must be taken before 31 December 2019. Special arrangements can, however, be made with the Bishop, or the Vicar-General in the absence of the Bishop from the Diocese or a vacancy in the See, to extend this time limit; and
- refreshment and/or study leave for two weeks each year but it is not cumulative. It may be taken in one segment or in any series of segments before 31 December each year.
Every Incumbent should inform their churchwardens and the Bishop or Vicar General if he intends to be absent from his parish or special district for two or more successive Sundays. He should arrange with the churchwardens for the holding of Divine Service in his absence and any costs incurred will be a charge on parish or special district funds. Where doubts arise as to leave entitlements the Bishop or the Vicar-General should be consulted.
On leaving a parish or special district, or a non-school chaplaincy role, clergy are either to take leave they have accrued and not taken in the preceding two years, or be paid in full for the leave they have accrued but not taken during this period.
It is important that Incumbents let their Archdeacon know what arrangements have been made to cover emergencies such as funerals when there is no clergyman available in the parish or special district. Archdeacons who also have parochial responsibilities should inform the Bishop’s Assistant of the arrangements they have made to cover emergencies. Churchwardens should also be made aware of these arrangements.
What to do when a workplace injury happens
- Check for danger to make sure no one else gets injured
- Ensure that the injured person is treated for their injury
- Document the incident and the injury immediately
- Pass this report on to the Registrar within 24 hours
- Have your Parish Council review the circumstances of the injury to see if something can be done to minimise the chance of such an injury happening again. Any such report by the Parish Council should also be forwarded to the Registrar.
11 September 2019
Clergy Removal and Relocation Costs and Leave
The costs associated with the transport of furniture and other goods belonging to clergy are shared between the Diocese and parishes and special districts. For moves of clergy within the Diocese the costs are shared equally, that is, 50:50, between the Diocese and the parochial district concerned. For people coming into the Diocese from elsewhere in Australia, the Diocese meets 75 per cent of the costs and the parochial district 25 per cent. For clergy coming from overseas to minister at a parish level within the Diocese, or returning to Australia for this purpose, the Diocese and the parochial district where they are to minister share (75:25) the costs of transporting any furniture and other goods within Australia to the place where they are to minister.
For clergy taking up Diocesan appointments, and these involve a relocation, the Diocese meets costs associated with the move.
The effects, furniture and other household goods of clergy while in transit are covered by the Diocese’s insurance arrangements.
Where clergy are either moving into or within the Diocese they should obtain three written quotations for the packing and transport of their effects, furniture and household goods and forward them to the Registrar for his consideration.
Since July 2015 the Diocese has been assisting with the costs of clergy moving into retirement, or their surviving spouse moving where the clergyperson dies while holding a stipendiary position in a parish, special district or Diocesan agency. The amount of assistance is currently $5,200. This will rise to $5,400 from 1 July 2019 and will rise in $200 increments in July 2021 and 2023 until it reaches $6,000 in July 2025.
In terms of time off for clergy during a move, the Diocesan Council has approved Paid Relocation Leave of one week for all clergy and their families moving between parishes in the Diocese, with stipend and other associated expenses to the value of 3.5 days being contributed by both the outgoing and the incoming parishes, with the leave to include one Sunday.
Section 4.37 of Faithfulness in Service says:
You need to know the relevant principles of the applicable privacy legislation in relation to the collection, use, disclosure and management of personal information. These have implications for:
- the publication of personal information in church directories, newsletters, rosters and websites;
- the recording and publication of voices and images of individuals; and
- the use and security of all personal information, and especially sensitive information, held by clergy and church workers or in church offices.
At the moment, technically all of our parishes are exempt from the Privacy Act 1988, as their annual turnover is less than $3,000,000.
However, having said that, the Registrar nevertheless encourages parishes to respect people’s expectations and wishes when it comes to privacy. It would be good practice to have explicit permission from those in any Parish Directory to have their details published, and when the parish gets that permission, to be clear about who the Directory would be distributed to. So yes, you can distribute it to all regular members of your church (including those who haven’t signed up to be in it), just so long as you tell people that that’s what you’re going to do. This would then also allow you to give a copy of the book to any new people who subsequently join your congregation. But of course this also means that it wouldn’t be a good idea to just leave piles of them lying around the church for people to pick up.
22 August 2018
The Sale of Buildings and Lands
Where the parish council of a parochial district wishes to sell a building or land it should make this known to parishioners by giving public notice at two different but successive Sundays on which services are held. It is important that this requirement is observed, particularly where the sale of a branch church building is contemplated. It is, however, also observed that where services are no longer held on a regular basis at the branch church building concerned the requirement might be waived but there is still a requirement for parishioners to be consulted through public notice at the principal place where services are held. Once the consultation process has been completed, and the Parish Council is satisfied that there is sufficient support for the sale to proceed, the Parish Council should write to the Registrar asking Diocesan Council to pass an ordinance to permit the sale of the property. In writing to the Registrar, the parochial district should indicate to what ends it proposes to put the sale proceeds after the payment to the Diocese (see below) and other costs relating to the sale have been met. If the parochial district is uncertain, or does not specify a use for the funds, the default position is that the funds, after the payment to the Diocese and other costs relating to the sale have been met, are to be invested in the Diocesan Development Fund on the understanding that the money can subsequently be withdrawn and used at the Parish Council’s discretion.
In the ordinary course of events, property sale ordinances passed by Diocesan Council give the Corporate Trustees of the Diocese the ultimate responsibility for overseeing the sale process. They do this in concert with the parochial district intending to sell the property. It is normally left to the parochial district to settle the arrangements for the sale – auction, tender or individual offer and whether an agent will be used to facilitate the sale process. The Corporate Trustees will generally only intervene in a proposed sale if it is thought that the proposed sale price does not reasonably reflect the value of the property. The legal aspects of the sale, from the Diocesan side, are handled by the Diocesan Solicitor, Mr David White of A. W. Simpson & Co. Armidale.
Following the sale of a church property, the Diocesan Solicitor will forward to the Registrar the proceeds of the sale less the fees and expenses that his firm has incurred in the sale process. By a resolution of Synod, the Diocese retains 15% of the gross sale price (ex GST). The balance is forwarded to the parochial district to be put to use or to be deposited with the DDF.
Where an agent has been used and he or she is holding the deposit for the sale, this deposit, less the agent’s commission, is to be similarly forwarded to the Registry who will then pass it on to the parochial district.
GST will generally be payable on the sale of church property, unless the sale in question is of a used residential house. Parochial districts are advised to take the 10% GST into account when determining the sale price. Parochial districts will be responsible for paying any GST out of the proceeds of the sale via their next Business Activity Statement lodged with the Australian Taxation Office. This can be offset to some extent by the GST that may be claimed back from agents’ fees and legal fees. The Registry will supply the parochial district with a copy of the tax invoices required to meet these GST responsibilities.
The main Diocesan grants available are:
- Worboys Grants – available for one off evangelistic initiatives, or for the seeding of new evangelistic or discipleship enterprises
- Seeding Ministry Grants – to enable parishes to employ an evangelist, or minister to work primarily in evangelism, to assist the growth of a parish
- Indigenous Ministry Grants – for ministry focussed on indigenous people and communities in our Diocese
Please contact the Registrar for more details on any of these grants.
For an application to be considered for funding in any given financial year, the application needs to have been submitted to the Registrar by the end of July of that financial year.
The final decision on grant applications is made by Diocesan Council, who considers the range of applications received and the money available to fund them.
Anglican Diocese of Armidale – Building Approval Protocol
Scope: This protocol deals with the erection, addition or alteration of any church building, vicarage or other building to be erected, altered, added to on lands for which The Corporate Trustees of the Diocese of Armidale are responsible. Repair and maintenance work which does not make an addition or alteration to a building does not fall within the scope of this protocol.
- Parish Consultation – if the building work involves a licensed or consecrated building, then the consultation must be as per the Parish Governance and Administration Ordinance, Schedule E, Clauses 3(a) and 3(c) as reproduced below.
(a) prior public notice has been given at church services on at least two different but successive Sundays on which services are held;
(c) opportunity is given for five or more parishioners to petition within one month of the first public notice being given, as provided for in section 3(a) above, to disallow such proposed action.
- An outline of the project and the proposed building plans are forwarded to the Registrar. If the value of the building project is less than $20,000, then the Registrar may formally approve the project on behalf of the Bishop without the need for any further examination. However, if the proposal involves an ornament or monument within or on the walls of a church building, then special permission in the form of a faculty will be required regardless of the value of the project.
3. If the value of the building project is $20,000 or greater, then the Registrar arranges for 3 members of the Building Approval Panel (see Parish Governance and Administration Ordinance, Schedule E, Clause 2) to consider the proposal and write a report making a recommendation to the Bishop.
4. Upon receipt of the report from the panel, the matter is brought to the Corporate Trustees to seek their recommendation
5. If finance outside of the DDF is required, this will be brought to Diocesan Council and the Corporate Trustees.
6. The Bishop makes his decision, be it approval, conditional approval or rejection, taking into account the recommendations he has received.
Approved by Diocesan Council, 24 July 2018
For “one off” casual visitors to a parish who have a worship or safety agreement in another Diocese and are therefore a “person of interest” (POI), or indeed another parish, they have agreed to inform their “home” diocese or parish of their intended visit. It would also be good if the POI informed the parish they are visiting though that probably cannot be enforced as the parish would not know that they were a POI unless they disclosed it.
If a parish or Vicar becomes aware that a visitor is a POI, the Vicar should mention it to his church wardens to ensure some rudimentary “supervision” by observation, notify by email the Armidale Director of Professional Standards (DPS) at email@example.com cc’d to Bishop’s Assistant firstname.lastname@example.org and keep a diary note.
The DPS I would then make enquires of the “home” diocese DPS to clarify if there are any particular matters the Armidale Diocese needs to be aware of.