Policy Executive Remuneration Vehicle Scheme Procedure

Executive Remuneration Vehicle Scheme Procedure


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Intent

The provision of a fully maintained motor vehicle to the value of $50,000 (exclusive of GST) is included in the salary package for nominated senior executives employed by the University. This provision is to be included in contracts as they are negotiated or when new staff are employed.

The funds allocated to the purchase of a motor vehicle are not transferable to any other benefit.

In line with JCU sustainability objectives, eligible staff are encouraged to consider selecting a vehicle that is a low emission, fuel efficient vehicle.

Scope

This procedure applies to nominated senior executive staff who choose to participate in the Executive Remuneration Vehicle scheme as per their employment contracts. The Executive Remuneration Vehicle scheme and this procedure adopt the principles of the Executive Remuneration Framework. New executives appointed to positions from 1 January 2019 will no longer be eligible for this benefit.

The vehicle must be a vehicle eligible for Fringe Benefit Tax purposes, refer Schedule A ‘FBT Implications for employer and employee” and must be purchased new from a licensed motor vehicle trader as a tax invoice will be required.

The vehicle should be the primary vehicle used for business use, but may be made available to licenced spouse and other family members out of business hours.

Definitions

Nominated Senior Executive Staff – Vice Chancellor, Provost, Deputy Vice Chancellor

Cost Centre – The account code for the salary cost of the staff member

Fully maintained motor vehicle – As per ‘Schedule B – Vehicle Expenses’

ED Fleet – Estate Directorate Vehicle Fleet staff

Procedure

1.  Acquisition and Disposal of Vehicles

1.1   Acquisition

  • Eligible staff members can identify make and model of the vehicle required and request ED Fleet assistance in locating a vehicle or alternatively initiating discussions with a Licenced Motor Dealer.
  • ED Fleet will assess the information provided and obtain quotes for suitable vehicles and arrange purchase in line with JCU Purchasing Policy.
  • The cost of the vehicle must be no greater than $50,000 (exclusive of GST) (refer 1.2 Cost of the Vehicle).
  • Accessories included in the cost of the vehicle remain University property and should not be removed from the vehicle.
  • Vehicles are to be held for 5 years or 100,000 km whichever is earliest.
  • Vehicles eligible/ not eligible for packaging:-
    • Any motor car, four-wheel drive or station wagon is eligible.
    • Motor cycles are ineligible and are excluded from the Program (they are not defined as motor vehicles for fringe benefit tax purposes).
    • Utilities and dual cabs that have a carrying capacity of 1 tonne or greater, and vehicles with a passenger carrying capacity of more than 9 persons are ineligible and excluded from the Program (they are not defined as motor vehicles for fringe benefit tax purposes).

    Note: The University reserves the right to determine the eligibility of the Vehicle.

1.2   Cost of the Vehicle

The cost of the vehicle is not to exceed $50,000 (exclusive of GST) subject to the following:-

  • Items included in cost of the vehicle:-
    • Vehicle price
    • All accessories
    • State Government Discount (reducing cost of the vehicle).

  • Items not included in the cost of the vehicle:
    • Goods and Services Tax (GST)
    • Registration
    • Compulsory Third Party Insurance
    • Any other statutory on road charges.

On occasions the cost of a requested vehicle may exceed $50,000 and the staff member may wish to pay the difference to secure the vehicle. Approval of this transaction must be obtained from the Vice Chancellor. Approval for a vehicle for the Vice Chancellor is through the Chancellor.  The University retains full ownership of the vehicle including all disposal of vehicle proceeds (refer Section 4). This approval must be sought before committing to purchase the vehicle.

1.3   Disposal

ED Fleet will arrange for disposal of the vehicle at termination of the arrangement or changeover of vehicle.

A condition of the provision of a vehicle is that the vehicle be returned in “Good Condition” after allowing for “Fair Wear and Tear”.

‘Good Condition’ means, in relation to a vehicle’s age and usage,

  • serviced and maintained in terms of the manufacturer’s specifications,
  • good condition and appearance throughout and in sound mechanical order, having no major component failure, no upholstery or trim damage or tearing, no body or coach work damage, no paint scratches, dents or other damage, no sign writing or other distinctive markings,
  • no damage not repaired to a normal commercial standard,
  • no glass damage which might prejudice re-registration or affect roadworthiness, having five tyres bearing in a condition identified as ‘roadworthy tread’, and
  • no driver abuse or neglect.

‘Fair Wear and Tear’ means any moderate deterioration of the vehicle’s condition due to normal and careful use of the vehicle. Without limitation,

  • it does not include any damage or wear which would prevent the vehicle passing a roadworthiness test or;
  • scratches (excluding minor stone chippings) where the paint surface is broken to the level of the undercoat or deeper;
  • paint discoloration on the exterior bodywork;
  • dents or impact damage or any visible sign of having been involved in an accident;
  • roof and gutter damage caused by the fitting of a roof rack;
  • broken or cracked lenses;
  • tears, rips or cuts to any portion of the interior;
  • any marks on the interior from oil, glue, chemicals or other substances which cannot be removed by upholstery cleaners;
  • burn to upholstery;
  • any missing mechanical component or accessory.

If the staff member ceases employment with the University and desires to retain the vehicle, ED Fleet will determine an appropriate market based price and the employee can either accept the price and purchase the vehicle, or reject the price and the University will dispose of the vehicle as per fleet vehicle disposal procedures.

On return of the vehicle the University will have the vehicle assessed and any repairs required to return the vehicle to “good condition" will be undertaken with costs forwarded to the relevant cost centre. Repairs other than ‘fair wear and tear’ may be required to be borne by the executive staff member.

2.  Vehicle Operations

2.1   Driver’s Responsibility

Drivers of executive vehicles are required to:

  • Be appropriately licenced
  • Obey all traffic laws and parking restrictions
  • Pay any traffic fines or similar
  • Pay tolls
  • Ensure the safe and efficient operation of the vehicle, and that any cargo is appropriately secured
  • Report vehicle and accident defects to ED Fleet
  • Ensure the care and security of the vehicle
  • Comply with the provisions set out in these guidelines.

In some circumstances drivers may be liable for vehicle costs as per Schedule B.

2.2   Maintenance

  • ED Fleet will arrange for vehicle services and other maintenance activities as required and will charge the cost centre a monthly fee which will cover the vehicle costs as per the ‘Schedule B – Vehicle Expenses’.
  • Fuel cards will be issued for the vehicle which entitle the holder to purchase fuel and top up oil. The card must not be used for any other vehicle. Monthly fuel and other costs of vehicles identified by their specific registration number will be recovered to the relevant cost centre.
  • Fringe Benefit Tax on the vehicle will be charged directly to the cost centre once a year usually in period six. Estimates of the FBT for specific vehicles can be obtained from the FaBS Finance and Taxation Team.

2.3   Maintenance, Fuel and Running Costs while on leave

The University will meet the maintenance, fuel and running costs associated with the use of executive vehicles during periods of paid leave.

Where the executive staff member wishes to retain and use an executive vehicle during a period of leave without pay, they must first seek the approval of the Vice Chancellor. In this circumstance the executive must meet the costs of fuel associated with that period of leave.

3.  Accidents and Replacement Vehicle

In the event of an accident or breakdown where the vehicle is off the road for a period of time and a replacement vehicle is required, a hire vehicle from the short term hire pool may be provided if available. Normal hire rates will apply and the cost of the vehicle will be charged to the relevant cost centre of the staff member. In the event of an accident the University is responsible for the cost of any repairs and any excess payable and will be charged to the relevant cost centre of the staff member.

4. Vehicles in excess of allowable limit

If an eligible staff member wishes to purchase a vehicle with a cost price above $50,000 (exclusive of GST) approval may be sought from the Vice Chancellor. Approval for a vehicle for the Vice Chancellor is through the Chancellor.  Any approval to purchase a vehicle on this basis is on the understanding that any difference in price (between the allowable limit and the cost price) may be paid from the eligible staff member’s personal funds (after tax dollars). When the vehicle is returned at the end of the period the staff member will forfeit the right to recover any portion of the sale price.

FBT implications for a purchase of a vehicle in excess of the allowable limit are outlined in Schedule A (example 2) of this document.

Related policy instruments

Executive Remuneration Framework

Schedules

Schedule A - FBT Implications for employer and employee

Schedule B – Vehicle expenses

Administration

Approval Details

Procedure sponsor:

Deputy Vice Chancellor, Services and Resources

Version no:

19-1

Date for next review

25/03/2022

Revision History

Version

Approval date

Implementation date

Details

Author

19-1

25/03/2019

03/04/2019

Procedure established

Director, HR

Keywords

Executive remuneration, vehicle, maintenance, Fringe Benefits Tax