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Means Test

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dAIS Means Test — FAQs & Scenarios

To ensure that the dAIS funding is allocated to those athletes who have the greatest need for support, dAIS is subject to means testing.

The after tax income threshold is $60,000 AUD per annum (averaged over the last four financial years ending 30 June) from all sources excluding previous dAIS and Direct Athlete Support grants provided by the AIS and discretionary grants issued by the Australian Sports Foundation arising from philanthropic donations.

When an athlete's average annual income over the last four financial years is over the income threshold, the athlete will get a percentage of the full allocation according to the income band above the income threshold, as per the table below:

 

Income band Annual income range (AUD) Eligible % of dAIS
Band A <=$60,000 100%
Band B $60,001 - $70,000 75%
Band C $70,001 - $80,000 50%
Band D $80,001 - $90,000 25%
Band E >$90,000 0%

 

It is important that athletes are aware that it is an offence for a person to make a false or misleading statement in, or in connection with, an application for a grant. The AIS will undertake a number of audits of athlete finances in each funding round. Athletes are strongly encouraged to seek financial and/or taxation advice if they are uncertain as to whether they satisfy the means test.

Below you will find FAQ's, some scenarios and the dAIS Means Test Checklist that athletes can use as a self-check tool.

FAQs

1. What does ‘after tax income’ mean?

2.  Do I have to include the dAIS grant in my tax return lodgement?

3.  For tax purposes, should I register sport as a business? If I don’t register sport as a business, does it mean that I don’t need to include all my sports income/payments in my tax return lodgement?

4 Why do I have to include my overseas income (post tax) as part of my after tax income calculation?

5.  For my overseas/foreign income, what exchange rate should I use? At the time of earning the income or at the time of completing this means test checklist?

6.  Do I have to include living allowance and meal allowance from my NSO, State/Territory Institute/Academy of Sport or my sponsors into the means test checklist? How about sporting equipment, playing uniform and gear provided by the NSOs, the Institutes/Academies or sponsors?

7.  Why are government pensions included in the means test?

8. Why is the means test based on the average of past four years’ income? Not just the past 12 months?

9. What is involved in the dAIS financial audit? What do I need to do and what are my rights and obligations? What is the consequence if I fail the financial audit.

Scenarios

1. Scenario 1 

2. Scenario 2 

3. Scenario 3 

FAQs

1.  What does ‘after tax income’ mean?

After tax income = Adjusted taxable income – Assessable tax payable – Previous dAIS/DAS grants – Discretionary grants issued by the Australian Sports Foundation (ASF) arising from philanthropic donations

 Where:

  • Adjusted taxable income = Taxable income for the financial year (as per the Notice of Assessment) + Additional income received during that financial year NOT reported in the Australian tax return, including but not limited to:

-  Athlete cash payments from NSOs

-  Athlete cash payments from the AOC, APC and ACGA

-  Cash scholarships from SIS/SAS

-  Domestic player contracts (cash only)

-  Overseas player contracts (cash only, post tax)

-  Other foreign income (post tax)

-  Tax-free government pensions and benefits

-  Sponsorship and endorsement fees

-  Reportable fringe benefit amounts

-  Reportable employer superannuation contributions

-  Total net investment losses.

  • Assessable tax payable is as per the Notice of Assessment.
  • Previous dAIS/DAS grants are deducted ONLY if they were reported as income in the Australian tax return.
  • Discretionary grants issued by the ASF arising from philanthropic donations are deducted ONLY if they were reported as income in the Australian tax return.

 2.  Do I have to include the dAIS grant in my tax return lodgement?

The Australian Taxation Office (ATO) has issued a class ruling for dAIS. The ruling states that grants received by an athlete under dAIS are not assessable income for the purposes of section 6-5 or section 6-10 of the Income Tax Assessment Act 1997, provided that the athlete is not carrying on a business as a sportsperson. The dAIS class ruling is available on the ATO website.

 3.  For tax purposes, should I register sport as a business? If I don’t register sport as a business, does it mean that I don’t need to include all my sports income/payments in my tax return lodgement?

This is a question of fact and circumstance. You will need to discuss this with your tax advisor, however the following are indicators of carrying on a business:

(a)  whether the activity has a significant commercial purpose or character; this indicator comprises many aspects of the other indicators;

(b)  whether the taxpayer has more than just an intention to engage in business;

(c) whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity;

(d)  whether there is repetition and regularity of the activity;

(e)  whether the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business;

(f)  whether the activity is planned, organised and carried on in a businesslike manner such that it is directed at making a profit;

(g)  the size, scale and permanency of the activity; and

(h) whether the activity is better described as a hobby or a form of recreation 

If you are not carrying on your sporting pursuit as a business and it is merely a private pursuit it is likely that any income derived from that activity would not be included in your tax return.

4 Why do I have to include my overseas income (post tax) as part of my after tax income calculation?

The dAIS means test includes athletes’ income from all sources. Your overseas income will be required for the means test checklist, if it has not been included in your Australian Tax Return.

5.  For my overseas/foreign income, what exchange rate should I use? At the time of earning the income or at the time of completing this means test checklist?

You should use the exchange rate at the time of earning the income.

6.  Do I have to include living allowance and meal allowance from my NSO, State/Territory Institute/Academy of Sport or my sponsors into the means test checklist? How about sporting equipment, playing uniform and gear provided by the NSOs, the Institutes/Academies or sponsors?

You only need to include the cash payments from the NSO, State/Territory Institute/Academy of Sport or your sponsors only, excluding allowances such as meals, living or accommodation. Non-cash support such as sporting equipment, playing uniform and gear, does not need to be included in the calculation of after tax income.

7.  Why are government pensions included in the means test?

The dAIS means test includes athletes’ income from all sources. Tax free pensions and benefits are any non-taxable pensions or benefits you might receive from the Department of Human Services. This can include payments such as Disability Support Pension, Carer Payment and Wife Pension, but not Family Tax Benefit, Child Care Benefit or Child Care Rebate.

8. Why is the means test based on the average of past four years’ income? Not just the past 12 months?

Averaging income on a 4 year basis is consistent with the income tax approach of averaging income for professional athletes. This also allows AIS to ensure that the funding is going to those athletes who have the greatest need for support. 

9. What is involved in the dAIS financial audit? What do I need to do and what are my rights and obligations? What is the consequence if I fail the financial audit.

The dAIS audits will be undertaken as part of each dAIS funding cycle to ensure that accurate financial information has been used in determining whether an athlete meets the dAIS means testing criteria.

 For each audit cycle, a proportion of funding athletes will be selected by the ASC to be subject to an audit. These athletes will be requested to provide additional documentation to support the financial information used as a basis for the means test.

 The audits and additional information requested will be in accordance with the dAIS athlete agreement, under which athletes have agreed to provide any information requested by ASC.

Where athletes audited are found to have provided misleading information or do not satisfy the means test, the ASC will take appropriate action in accordance with the athlete agreement. This may include requiring the athlete to repay funds provided under the dAIS scheme. 

Scenarios

The following scenarios are fictitious. They should be read as broad guidance only. If you are uncertain of your situation and/or how to complete the dAIS means test checklist, you should seek financial and/or taxation advice.

Scenario 1 

Nicole is a podium athlete who won a medal at the last World Championships. However, her sport is not a high-profile sport and it is generally difficult for even top athletes to attract sporting income from sponsorships or endorsement fees. She is a university student. In addition to studying demand, the physiological demands of her event means that she cannot work while training at the level required to be world class. Her sources of income are dAIS, grants from the Australian Olympic Committee and scholarships from State Institute of Sport. Her NSO does not provide any cash payments to her.

Nicole did not lodge any tax returns during the past four years because she did not do any paid work during this period and did not consider her payments in relation to sport to be taxable.

Nicole’s dAIS Means Test calculation will be as follows.  Her dAIS/DAS grants received in the past four years do not need to be included in the means test. Her average after tax income in the past four financial years is under $60,000 per annum. She meets the dAIS means test and will get 100% of the eligible dAIS allocation.

 

Income Source

2012-13

2013-14

2014-15

2015-16

1

Taxable income as per your ATO Notice of Assessment

0

0

0

0

PLUS:  The income items below if they have NOT been included in your Australian Tax Return Lodgement:

2

Support cash payments from your National Sporting Organisation

0

0

0

0

3

Support cash payments from the Australian Olympic Committee, Australian Paralympic Committee or

Australian Commonwealth Games Association

$20,000

$20,000

$20,000

$30,000

4

Scholarships (cash only) from your State/Territory Institute/Academy of Sport

$5,000

$5,000

$5,000

$7,500

5

Domestic player/athlete contract (cash only)

0

0

0

0

6

Overseas player/athlete contract (cash only, post tax)

0

0

0

0

7

Other foreign income (post tax)

0

0

0

0

8

Sponsorship and endorsement fees (cash only)

0

0

0

0

      ADD:

9

Tax free government pensions and benefits

0

0

0

0

10

Reportable fringe benefit amounts

0

0

0

0

11

Reportable employer superannuation contributions

0

0

0

0

12

Total net investment loss

0

0

0

0

      MINUS:

13

Assessed Tax Payable as per your ATO Notice Of Assessment

0

0

0

0

Was any previous ASC dAIS/DAS grants received

included as gross income in your

Australian Tax Return Lodgement?

If YES:

Please enter your dAIS/DAS grant received in

each financial year in item 14.

If NO: Please enter $0 in item 14.

14

dAIS/DAS grants received from the ASC

[only if this has been included in Gross Income in your Australian Tax Return Lodgement]

0

0

0

0

Did you receive any discretionary grants issued by the Australian Sports Foundation arising from

philanthropic donations that were included as gross income in your Australian Tax Return Lodgement?

If YES: Please enter the amounts in each financial year in item 15.

If NO: Please enter $0 in item 15.

15

Discretionary grants issued by the ASF arising from philanthropic donations [only if this has been included

in Gross Income in your Australian

Tax Return Lodgement]

0

0

0

0

After tax income

$25,000

$25,000

$25,000

$37,500

Average after tax income (per annum)

$28,125

 

Mark is a podium potential athlete who is married and has two young children. To support himself in sport and his family, he has a part-time job. His other income sources include dAIS, grants from the Australian Olympic Committee and a scholarship from a State Institute of Sport. His NSO does not provide any cash payments to him.

He has received a child care rebate as a tax free government benefit during the past four years. He does not have fringe benefits, but has received reportable employer superannuation contributions as per his annual payment summaries provided by his employer.

Mark’s dAIS Means Test calculation will be as follows.  Even though he has received child care rebate for the past four years, this does not need to be included in the means test checklist (refer to Checklist Guidance notes, tax-free pensions and benefits that need to be added back onto the checklists are Disability Support Pension, Carer Payment and Wife Pension). His average after tax income in the past four financial years is under $60,000 per annum. He meets the dAIS means test and will get 100% of the eligible dAIS allocation.

Income Source

2012-13

2013-14

2014-15

2015-16

1

Taxable income as per your ATO Notice of Assessment

$35,000

$35,500

$36,000

$36,500

PLUS:  The income items below if they have NOT been included in your Australian Tax Return Lodgement:

2

Support cash payments from your National Sporting Organisation

0

0

0

0

3

Support cash payments from the Australian Olympic Committee,

Australian Paralympic Committee or

Australian Commonwealth Games Association

$10,000

$10,000

$10,000

$10,000

4

Scholarships (cash only) from your

State/Territory Institute/Academy of Sport

$3,000

$3,000

$3,000

$3,000

5

Domestic player/athlete contract (cash only)

0

0

0

0

6

Overseas player/athlete contract (cash only, post tax)

0

0

0

0

7

Other foreign income (post tax)

0

0

0

0

8

Sponsorship and endorsement fees (cash only)

0

0

0

0

      ADD:

9

Tax free government pensions and benefits

0

0

0

0

10

Reportable fringe benefit amounts

0

0

0

0

11

Reportable employer superannuation contributions

$1,500

$1,550

$1,600

$1,650

12

Total net investment loss

0

0

0

0

      MINUS:

13

Assessed Tax Payable as per your ATO Notice Of Assessment

$2,520

$2,595

$3,382

$3,477

Was any previous ASC dAIS/DAS grants

received included as gross income in your Australian Tax Return Lodgement?

If YES:

Please enter your dAIS/DAS grant received in each financial year in item 14.

If NO: Please enter $0 in item 14.

14

dAIS/DAS grants received from the ASC

[only if this has been included in Gross Income in your Australian Tax Return Lodgement]

0

0

0

0

Did you receive any discretionary grants issued by

the Australian Sports Foundation

arising from philanthropic donations that were included as gross income in your Australian Tax Return Lodgement?

If YES:

Please enter the amounts

in each financial year in item 15.

If NO: Please enter $0 in item 15.

15

Discretionary grants issued by the ASF arising from philanthropic

donations[only if this has been included

in Gross Income in your Australian Tax Return Lodgement]

0

0

0

0

After tax income

$46,980

$47,455

$47,218

$47,673

Average after tax income (per annum)

$47,331.50

 

Scenario 3 

Melissa is the captain of a team sport which attained gold in the London Olympics and came second at the last World Championships. Her sport is high-profile and has attracted many corporate sponsors. Melissa herself has also got her own sponsorship.

She is a skillful and experienced player and was spotted by an overseas club in 2011 for a two year contract. She returned to Australia after the contract finished and has joined a domestic club to play domestic league.

She is a full time athlete and has registered sport as a business. Her other sources of income are dAIS, grants from the Australian Olympic Committee and scholarships from State Institute of Sport. She has signed player agreement with her NSO and received cash payments and meal and living allowances under the agreement.

With the annual tax return, she has reported all income from sports sources including dAIS and other sports grants received. She also reported deductible expenses in the tax return for her training, competition, sporting gear and apparel.

She purchased an investment property in 2013 and reported it in the 2013/14 tax return for negative gearing purposes.

Melissa’s dAIS Means Test calculation will be as follows.  Given she has already included all her sports income, including sports grants and sponsorships in the tax return, she does not need to include most of the add-back income items in the checklist. However, she has not included her overseas player contract value in her tax return and therefore she has to add it back on the checklist. She also has to add back the net investment loss of the property she purchased in 2013.

Since she is carrying sport as a business, the dAIS Class Ruling will not apply in her case, and therefore her dAIS grant is not tax exempt and she needs to report it in her tax return. On the checklist, she can ‘minus’ the dAIS grants she received in the past four years as she has included them in her tax return.

Her average after tax income in the past four financial years is between $60,001 - $70,000 per annum (income band B). She meets the dAIS means test and will get 75% of the eligible dAIS allocation.


Income Source

  2012-13

     2013-14

     2014-15

 2015-16

1

Taxable income as per your ATO Notice of Assessment

$80,000

$50,000

$50,000

$90,000

      PLUS:  The income items below if they have NOT been included in your Australian Tax Return Lodgement:

2

Support cash payments from your National Sporting Organisation

0

0

0

0

3

Support cash payments from the Australian Olympic Committee,

Australian Paralympic Committee

or Australian Commonwealth Games Association

0

0

0

0

4

Scholarships (cash only) from your State/Territory Institute/

Academy of Sport

0

0

0

0

5

Domestic player/athlete contract (cash only)

0

0

0

0

6

Overseas player/athlete contract (cash only, post tax)

0

$45,000

$45,000

0

7

Other foreign income (post tax)

0

0

0

0

8

Sponsorship and endorsement fees (cash only)

0

0

0

0

      ADD:

9

Tax free government pensions and benefits

0

0

0

0

10

Reportable fringe benefit amounts

0

0

0

0

11

Reportable employer superannuation contributions

0

0

0

0

12

Total net investment loss

0

0

0

$10,000

      MINUS:

13

Assessed Tax Payable as per your ATO Notice Of Assessment

$9,111

$3,340

$3,510

$6,230

Was any previous ASC dAIS/DAS grants received included

as gross income in your Australian Tax Return Lodgement?

        If YES:

Please enter your dAIS/DAS grant received in each

financial year in item 14.

If NO: Please enter $0 in item 14.

14

dAIS/DAS grants received from the ASC

[only if this has been included in Gross

Income in your Australian Tax Return Lodgement]

$20,000

$20,000

$27,000

$27,500

Did you receive any discretionary grants issued by the

Australian Sports Foundation arising

from philanthropic donations that were included

as gross income in your Australian Tax Return Lodgement?

If YES:

Please enter the amounts in

each financial year in item 15.

If NO: Please enter $0 in item 15.

15

Discretionary grants issued by

the ASF arising from philanthropic donations

[only if this has been included in

Gross Income in your Australian

Tax Return Lodgement]

0

0

0

0

After tax income

$50,889

$71,660

$64,490

$66,270

Average after tax income (per annum)

$63,327.50

 

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