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:
Income tax exemptions/benefits.
Relief from local government emergency services property tax levies.
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.