Fire Fighter Nation, a US based firefighter news service is reporting that a Bill has been introduced to the US Congress to allow volunteer emergency service workers to claim a tax deduction of $20 for each hour they volunteer up to 300 hours or US$6000 (National Volunteer Fire Council, Bill Introduced Giving Tax Credit to Nation’s Fire and EMS Volunteers, 18 December 2014).
There have been calls for tax benefits for Australian emergency service volunteers. In 2003, the House of Representatives Select Committee into the recent Australian bushfires (The Parliament of the Commonwealth of Australia, A Nation Charred: Report on the inquiry into bushfires, 23 October 2003) recommended that ‘the Commonwealth consider the feasibility of taxation relief on costs incurred by registered firefighting volunteers in the line of duty’. That recommendation would appear to allow volunteers to claim a tax deduction for expenses paid out rather than any credit for their volunteer hours. Currently such a deduction is not allowed (see ATO Interpretative Decision ATO ID 2002/910 Income Tax Volunteer Firefighter – Purchase of Equipment, 16 September 2002).
In 2006 the Australian Emergency Management Volunteer Forum (The Cost of Volunteering: A Report on a National Survey of Emergency Management Sector Volunteers (November 2006) pp 45-46) suggested that:
The ‘mutual obligation’ principle employed by the Federal Government in relation to unemployment and other welfare payments could be applied in ‘reverse’ to volunteers; ie where governments are heavily reliant upon volunteers in the provision of emergency management services. This donation of time and resources could be treated in the same way as donations of money to charitable organisations, and a tax break provided to an agree amount, or a reduction of fees and charges (eg motor vehicle registration, telephone line rental, property taxes).
In 2008 a report prepared for Emergency Management Australia (Jim McLennan, Issues Facing Australian Volunteer-Based Emergency Services Organisations: 2008 – 2010 (LaTrobe University, 2008)) said (at [4.3]):
In Australia, a range of possible incentive (exemptions/reimbursement/compensation) schemes have been proposed in various contexts (e.g., the Valuing Volunteers Conference, 2001), including:
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Income tax exemptions/benefits.
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Relief from local government emergency services property tax levies.
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Compensation for employers whose employees take time off work to attend emergency incidents and/or training. In NSW, Queensland, and Victoria employers whose staff volunteer for emergency services organisations such as SES and fire services are exempt from paying payroll tax for the hours staff spend away from work undertaking emergency response activities.
In a submission to the Senate Inquiry into the incidence and severity of bushfires across Australia, the Fire and Emergency Services Authority of Western Australia set out a history of claims for tax relief for volunteers (Letter from Jo Harrison-Ward, FESA CEO to The Secretary, Senate Select Committee on Agricultural and Related Industries, 21 July 2009, pp 16-18; see also
- Anthony Deceglie ‘Towns at risk as 2000 volunteer fire crews quit’ Perthnow 5 December 2009;
- The Rising Costs of Volunteering: A report prepared by the Costs of Volunteering Taskforce (u.d), pp 10-18;
In 2010 Tony Abbott suggested that volunteers should be able to claim $10 credit toward their HECS debt for each hour of volunteer work (Malcolm Farr and Stephanie Balogh, ‘Volunteer time to cut uni debt’ The Daily Telegraph, 19 August 2010).
The NSW Volunteer Fire Fighters Association has recommended that the Commonwealth ‘consider the introduction of a range of incentives to attract young people to join the NSWRFS as well as retain the services of experienced active fire fighters to lead and mentor the next generation of active fire fighters. Such incentives could include tax relief…’ (Michael Scholz, Volunteer Firefighter Recruitment and Retention, 17 June 2012).
Most recently, Victoria has moved to a property, rather than insurance levy, to fund fire brigades (Department of Treasury and Finance, Victorian Fire Services Property Levy: Options Paper, June 2011). CFA volunteers have called for an exemption from that levy on the basis that the ‘volunteers were essentially paying for a service that they themselves were providing’ (Nick Fogarty, ‘Volunteer Fire Fighters call for levy exemption’ ABC Goulburn Murray, 17 October 2013).
Notwithstanding these multiple recommendations none of them have been implemented. Tax law is a matter of Commonwealth law so it would be up to the Commonwealth to allow volunteer hours to be counted as the equivalent as a financial donation to a charitable organisation. Discounts in levy’s or vehicle registration would be a matter for state and territory governments. There would no doubt be issues of accountability and verification so emergency services would need to produce certificates to confirm a volunteer’s eligibility for whatever benefit is intended.
Many of the recommendations have favoured a rebate or deduction for costs incurred recognising that a tax deduction for hours volunteered will favour those volunteers that are tax payers. Those that are not would not enjoy any benefit from such a scheme. It would also seem that volunteers themselves don’t like the idea of financial reward as it changes the essential nature of volunteering and is inequitable (see the comments on the paper Anthony Bergin, ‘Keeping Australia’s emergency volunteer legacy alive’ ABC The Drum, 30 October 2014 and The Rising Costs of Volunteering: A report prepared by the Costs of Volunteering Taskforce (u.d), p 19).
The issue of recognising volunteers through either allowing them to claim a dollar amount for each hour they volunteer as a tax deduction, or by allowing them to claim a tax deduction for expenses incurred as part of their volunteering has been around for many years. Although there have been discussion papers and recommendations there appears to have been no changes in these areas. Those with an interest in this area may like to keep an eye on the US Bill to see if there are lessons in its implementation for Australia.
Australian Emergency Law 
Personally I would welcome something like this but have two concerns:
1. The administrative overhead on volunteer managers in administering it
2. The potential for abuse by people joining volunteers organisations just to claim the benefit rather than genuinely contribute to them
I’m a volunteer in the NSW RFS with around 14 years experience and have been thinking about this for a while. So here’s my 2 cents
1. The NSW RFS already records my time on the fireground, its part of BIRS (Brigade Incident Reporting System) and also comes up in myRFS on my attended incidents report. Besides, it’d be up to me to document any deductions I’m claiming, not the manager at Firecom. ATO can always audit, easy enough to ask the RFS for my attendance records.
2. All volunteer organisations would have some sort of recording system for their volunteers, it’d be part of their Work Health and Safety requirements. I suppose you could misrepresent your time but it’d be too easy to discover by going through the actual records.
I would support extending this to all volunteers, emergency services or not. I can see why it’s most relevant to emergency services because fires etc have a much greater capacity to damage a community and any means that reduces that impact must be considered.
As a volunteer I don’t see it would impinge on my sense of giving time to the community. Besides there is already a tax deduction for donations. If i donate $50 to the RSPCA i can get a tax deduction, why is a monetary donation valued but my donation of time isn’t? As for Treasury complaining, they’d much prefer a minute loss in tax revenue than having to budget for some sort of rebate scheme over the whole of Australia. The only rebate i would support is an exemption from the NSW Fire Services Property Levy for Brigade members’ properties. For the lols of actually having to pay a fire fighting levy and then go out and fight fires. 😉
I’m self employed so any time I spend at fires directly affects my income. When I go to fill in my tax return it would be nice to reduce my taxable income with a deduction. No matter what the income type, salary, self employed or retired every volunteer can benefit from a reduction in taxable income at their “other” job.
To give you a idea of how much time I spend at fire related activities, I did the following calculations. I’m a deputy captain and training officer so will have a greater time input than a average member, but here’s a rough idea:
Monthly training/exec meeting at 5 hours = 60 hours
We had 25 incidents last year, down from the usual average of around 45. Depending on the incident it can be as little as 6 hours or a max of 14 hours, lets average around 8 hours. Say 25 x 8 hours = 200 hours for a quiet year or 360 hours normally. Total of 260 or 420 hours annually.
A much bigger fire like a Section 44 could go on for weeks, with days and nights spent at the fire. Last section 44 we did the brigade put in over 320 hours combined on that one incident.
Don’t get me wrong, I’m not complaining. I love being part of my brigade and proud to be serving the community. I don’t begrudge the time at all.
I just think a cash donation being valued more than my time is a little weird.
Love the blog too Michael, we recommend it to all our brigade members.
Dear Michael,
I can’t see these sorts of proposals being easy.
The first thing people will notice is that Tony Abbott himself will be a beneficiary (with the Davidson Bushfire Brigade), and as a tapayer will be able to make a claim. Next, there will be a revolt at the thought that Tony will get a tax deduction , but non-taxpayers (for example students, the retired etc) won’t. Then, someone will want to means-test the deduction, so “the rich” don’t get it. Then the government will want to introduce a compliance regime to avoid the scheme being rorted. The emergency services will complain about the masses of red tape the compliance regime will require, which will take them away from the “real work” of providing services … and so it goes.
It’s a seemingly attractive idea, but politics, greed and envy will soon give emergency services volunteering a bad name as a tax rort, risking their good reputation in Australia. I think it would be a mistake to go here, and do more damage to emergency services volunteering than it is worth.
Barry, I suspect the reasons you’ve set out are part of the very reasons it’s never happened.
Thanks Michael,
It is great that this is starting to get some legs, I floated the idea back in 1995 when I was in NSW SES even going as far as a Superannuation enhancement package as well because in the country some blokes have 30 years of service or more and some of them are living on the poverty line. I believe we should acknowledge them in their retirement for a job well done.
Anyway, I must Thankyou for your dedication and service in providing this post and I am sure you have plenty of readers.
Make sure you have a very Happy Christmas and a prosperous New Year.
As long as we capture and allow all volunteer emergency services. All too often it seems to be fire focused….
Absolutely, and although I’ve quoted from agencies representing fire fighters and fire inquiries, I don’t mean to suggest, nor do the more generic sources such as the Volunteer Forum, that the benefit shouldn’t extend to all volunteer emergency workers, so SES, volunteer ambulance officers etc.
An interesting article Michael. I also would be concerned about any administrative overhead on volunteer managers in administering tax breaks for volunteer emergency workers. Many volunteers are also self-employed, casual workers, unemployed, retired pensioners and self-funded retirees so compensation recognition through the tax system would be inequitable. Also, as volunteers, I think many would reject the idea of any form of direct or indirect financial payment for the ‘time’ they volunteer. Compensation for expenditure they have to make out of their own pocket to be in a position to volunteer their time would be more fair and reasonable. I do like the idea however of exemption from insurance levies and rebates in motor vehicle registration. Perhaps members of any volunteer emergency organisation could be put on the same level as holders of a pensioner’s card – giving them the same partial relief from motor vehicle registration, rates, insurance levies and travel discounts for seniors. The membership base of volunteer fire-fighters and other emergency workers in many areas is aging with an increasing difficulty in attracting younger people to join. Rebates along these lines may provide a more equitable financial incentive to attract younger volunteers without being seen as a direct financial payment for the time the are asked to freely and willingly volunteer. Chris Searle.
I notice that throughout this piece you quote positions taken by various people and organisations in relation to tax benefits for emergency service volunteers. Unfortunately however no reference is made to the efforts of the RFSA in respect of this matter.
I draw your attention to the comprehensive report “Building a Rural Fire Service for 2030” lodged in 2011 with the NSW Government wherein it was recommended , amongst other things, that the State Government should support a national review of income tax assessment provisions to recognise deductions for personal expenditure incurred by emergency service volunteers in performing their duties.
The RFSA also recommended that the NSW Government should advocate a national approach in this regard directly with the relevant Federal Ministers and agencies as well as via the relevant ministerial councils.
Trevor, thanks for that. I did think the RFSA had said something on the topic but I was unable to locate it. Now that I have the title I see it can be located at http://www.rfsa.org.au/content/upload/files/Building_RFS_2030_061210.pdf. The relevant recommendations are set out on p. 24:
What a great Idea,. Should replace work for the dole for any volunteering individuals too.
I’d like to add that such a great idea should be available for reducing HECS or meeting Auststudy obligations. and the way to administer it is to provide (Commonwealth paid for) Volunteers with a scanable card to register their attendance. They could even pool a few card options and functions and call it the “Australia Card” (Yes I did vote for that!).
In reference to this post, I saw an article from South Australia ( http://www.adelaidenow.com.au/news/south-australia/emergency-services-to-join-forces-in-2016/story-fni6uo1m-1227161295790) that talks about grants to volunteers as part of the creation of a new fire and emergency services department – “Details of the merger come as Mr Piccolo announced a new grants program to support farm fire fighters, and rural and regional emergency services by upgrading fire fighting equipment. He said it was a way to show appreciation for volunteers in a practical way because the Government had no plans to provide Emergency Service Levy concessions.”
Extraordinarily thin ice to want tax relief for emergency service volunteers rather than ALL volunteers.
Why are emergency volunteers more valuable to the community than volunteers who say, provide meals on wheels services, Surf Life Savers, take disabled kids/adults on outings, coach children in sports and life skills, run Scout groups, provide land care service, etc?
It will be pretty much impossible to apply tax benefits to one specific group in Australia when there are a multitude of other similar groups who will miss out.
Once you start ranking volunteers in order of worth or value, your movement will fail due to the opposition of those who will miss out despite providing similar hours with similar expenses for similar benefit to their communities.
Anyway once the treasury sees the hit on revenue from tax benefits to volunteers, this movement will be doomed.