Fringe Benefits Tax Assessment Act 1986

Act No. 39 of 1986 as amended

Volume 1 includes: Table of Contents
Sections 1 – 78A

This compilation was prepared on 12 April 2005
taking into account amendments up to Act No. 41 of 2005

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

Volume 2 includes: Table of Contents
Sections 90 – 167
Schedule
Note 1
Table of Acts
Act Notes
Table of Amendments
Notes 2 and 3
Table A

Contents

Part I—Preliminary 1

1............ Short title [see Note 1]....................................................................... 1

2............ Commencement [see Note 1].............................................................. 1

2A......... Application of the Criminal Code...................................................... 1

Part II—Administration 2

3............ General administration of Act............................................................ 2

4............ Annual report..................................................................................... 2

5............ Secrecy................................................................................................ 2

Part IIA—Core provisions 5

Division 1—Working out an employer’s fringe benefits taxable amount 5

5A......... Simplified outline of this Division...................................................... 5

5B......... Working out an employer’s fringe benefits taxable amount............... 5

Division 2—Working out an employer’s aggregate fringe benefits amount 12

5C......... Aggregate fringe benefits amount...................................................... 12

Division 3—Employee’s individual fringe benefits amount 15

5D......... Simplified outline.............................................................................. 15

5E.......... Employee’s individual fringe benefits amount................................. 15

5F.......... Working out the employee’s share................................................... 17

Part III—Fringe benefits 19

Division 1—Preliminary 19

6............ Part not to limit generality of benefit................................................ 19

Division 2—Car fringe benefits 20

Subdivision A—Car benefits 20

7............ Car benefits....................................................................................... 20

8............ Exempt car benefits.......................................................................... 22

Subdivision B—Taxable value of car fringe benefits 24

9............ Taxable value of car fringe benefits—statutory formula.................. 24

10.......... Taxable value of car fringe benefits—cost basis............................... 27

10A....... No reduction of operating cost in a log book year of tax unless log book records and odometer records are maintained.......................................................................................................... 32

10B....... No reduction of operating cost in a non‑log book year of tax unless log book records and odometer records are maintained in log book year of tax.................................................... 33

11.......... Calculation of depreciation and interest........................................... 33

12.......... Depreciated value............................................................................. 36

13.......... Expenditure to be increased in certain circumstances....................... 36

Division 3—Debt waiver fringe benefits 38

Subdivision A—Debt waiver benefits 38

14.......... Debt waiver benefits......................................................................... 38

Subdivision B—Taxable value of debt waiver fringe benefits 38

15.......... Taxable value of debt waiver fringe benefits..................................... 38

Division 4—Loan fringe benefits 39

Subdivision A—Loan benefits 39

16.......... Loan benefits.................................................................................... 39

17.......... Exempt loan benefits........................................................................ 41

Subdivision B—Taxable value of loan fringe benefits 43

18.......... Taxable value of loan fringe benefits................................................. 43

19.......... Reduction of taxable value—otherwise deductible rule..................... 43

Division 5—Expense payment fringe benefits 49

Subdivision A—Expense payment benefits 49

20.......... Expense payment benefits................................................................ 49

20A....... Exemption—no‑private‑use declaration........................................... 49

21.......... Exempt accommodation expense payment benefits......................... 49

22.......... Exempt car expense payment benefits............................................. 50

Subdivision B—Taxable value of expense payment fringe benefits 51

22A....... Taxable value of in‑house expense payment fringe benefits............. 51

23.......... Taxable value of external expense payment fringe benefits.............. 53

24.......... Reduction of taxable value—otherwise deductible rule..................... 53

Division 6—Housing fringe benefits 62

Subdivision A—Housing benefits 62

25.......... Housing benefits............................................................................... 62

Subdivision B—Taxable value of housing fringe benefits 62

26.......... Taxable value of non‑remote housing fringe benefits........................ 62

27.......... Determination of market value of housing right............................... 66

28.......... Indexation factor for valuation purposes—non‑remote housing...... 67

Division 7—Living‑away‑from‑home allowance fringe benefits 69

Subdivision A—Living‑away‑from‑home allowance benefits 69

30.......... Living‑away‑from‑home allowance benefits..................................... 69

Subdivision B—Taxable value of living‑away‑from‑home allowance fringe benefits 70

31.......... Taxable value of living‑away‑from‑home allowance fringe benefits. 70

Division 8—Airline transport fringe benefits 71

Subdivision A—Airline transport benefits 71

32.......... Airline transport benefits................................................................. 71

Subdivision B—Taxable value of airline transport fringe benefits 71

33.......... Taxable value of airline transport fringe benefits.............................. 71

34.......... Reduction of taxable value—otherwise deductible rule..................... 72

Division 9—Board fringe benefits 74

Subdivision A—Board benefits 74

35.......... Board benefits................................................................................... 74

Subdivision B—Taxable value of board fringe benefits 74

36.......... Taxable value of board fringe benefits.............................................. 74

37.......... Reduction of taxable value—otherwise deductible rule..................... 74

Division 9A—Meal entertainment 76

Subdivision A—Meal entertainment 76

37A....... Key principle.................................................................................... 76

37AA.... Division only applies if election made............................................. 76

37AB.... Employee contributions to be excluded............................................ 76

37AC.... Meal entertainment benefits............................................................. 76

37AD.... Meaning of provision of meal entertainment.................................... 77

37AE..... Fringe benefits only arise if employer is provider............................ 77

37AF..... No other fringe benefits arise if election made.................................. 77

37AG.... Some benefits still arise.................................................................... 77

Subdivision B—50/50 split method of valuing meal entertainment 78

37B....... Key principle.................................................................................... 78

37BA.... Taxable value using 50/50 split method............................................ 78

Subdivision C—12 week register method 78

37C....... Key principle.................................................................................... 78

37CA.... Election by employer....................................................................... 78

37CB..... Taxable value using 12 week register method................................... 79

37CC..... Choosing the 12 week period for a register...................................... 79

37CD.... FBT years for which register is valid............................................... 80

37CE..... Matters to be included in register..................................................... 80

37CF..... False or misleading entries invalidate register................................... 81

Division 10—Tax‑exempt body entertainment fringe benefits 82

Subdivision A—Tax‑exempt body entertainment benefits 82

38.......... Tax‑exempt body entertainment benefits......................................... 82

Subdivision B—Taxable value of tax‑exempt body entertainment fringe benefits 82

39.......... Taxable value of tax‑exempt body entertainment fringe benefits..... 82

Division 10A—Car parking fringe benefits 83

Subdivision A—Car parking benefits 83

39A....... Car parking benefits.......................................................................... 83

39AA.... Anti‑avoidance—fee on first business day not representative......... 85

39AB.... When fees are not representative...................................................... 85

39B....... When commercial parking stations are located within a 1 km radius of business premises or associated premises.......................................................................................................... 85

Subdivision B—Taxable value of car parking fringe benefits 86

39C....... Taxable value of car parking fringe benefits—commercial parking station method 86

39D....... Taxable value of car parking fringe benefits—market value basis.... 86

39DA.... Taxable value of car parking fringe benefits—average cost method 87

39E........ Fees charged by commercial parking stations for all‑day parking.... 88

Subdivision C—Statutory formula method—spaces 89

39F........ The key principle............................................................................. 89

39FA..... Spaces method of calculating total taxable value of car parking fringe benefits 90

39FB..... Number of spaces exceeds number of employees............................ 91

39FC..... Meaning of daily rate amount........................................................... 92

39FD..... Meaning of availability period.......................................................... 93

39FE..... Meaning of relevant recipients contribution..................................... 93

Subdivision D—12 week record keeping method 93

39G....... The key principle............................................................................. 93

39GA.... Employer may elect to use 12 week record keeping method........... 93

39GB.... Value of fringe benefits for year....................................................... 94

39GC.... Meaning of total value of car parking benefits (register)................. 94

39GD.... Meaning of car parking availability period...................................... 94

39GE..... Choosing the 12 week period for a register...................................... 95

39GF..... FBT years for which register is valid............................................... 95

39GG.... Matters to be included in register..................................................... 96

39GH.... Fraudulent entries invalidate register................................................ 96

Division 11—Property fringe benefits 97

Subdivision A—Property benefits 97

40.......... Property benefits.............................................................................. 97

41.......... Exempt property benefits................................................................ 97

Subdivision B—Taxable value of property fringe benefits 97

42.......... Taxable value of in‑house property fringe benefits.......................... 97

43.......... Taxable value of external property fringe benefits........................... 99

44.......... Reduction of taxable value—otherwise deductible rule................... 100

Division 12—Residual fringe benefits 106

Subdivision A—Residual benefits 106

45.......... Residual benefits............................................................................. 106

46.......... Year of tax in which residual benefits taxed.................................... 106

47.......... Exempt residual benefits................................................................. 107

47A....... Exemption—no‑private‑use declaration......................................... 112

Subdivision B—Taxable value of residual fringe benefits 113

48.......... Taxable value of in‑house non‑period residual fringe benefits........ 113

49.......... Taxable value of in‑house period residual fringe benefits............... 113

50.......... Taxable value of external non‑period residual fringe benefits......... 114

51.......... Taxable value of external period residual fringe benefits................ 114

52.......... Reduction of taxable value—otherwise deductible rule................... 115

Division 13—Miscellaneous exempt benefits 121

53.......... Motor vehicle fringe benefit fuel etc. to be exempt in certain cases 121

54.......... Provision of food or drink to be exempt benefit in certain cases.... 122

55.......... Benefits provided by certain international organisations to be exempt 122

56.......... Preservation of diplomatic and consular immunities...................... 122

57.......... Exempt benefits—employees of religious institutions................... 123

57A....... Exempt benefits—public benevolent institutions, some hospitals and public ambulance services 123

58.......... Exempt benefits—live‑in residential care workers......................... 124

58A....... Exempt benefits—employment interviews and selection tests...... 125

58B....... Exempt benefits—removals and storage of household effects as a result of relocation 126

58C....... Exempt benefits—sale or acquisition of dwelling as a result of relocation 128

58D....... Exempt benefits—connection or re‑connection of certain utilities as a result of relocation 132

58E........ Exempt benefits—leasing of household goods while living away from home 134

58F........ Exempt benefits—relocation transport.......................................... 134

58G....... Exempt benefits—motor vehicle parking....................................... 135

58GA.... Exempt benefits—small business car parking................................ 136

58H....... Exempt benefits—newspapers and periodicals used for business purposes 137

58J........ Exempt benefits—compensable work‑related trauma.................... 138

58K....... Exempt benefits—in‑house health care facilities............................ 139

58L........ Exempt benefits—certain travel to obtain medical treatment......... 139

58LA..... Exempt benefits—compassionate travel........................................ 141

58M...... Exempt benefits—work‑related medical examinations, work‑related medical screening, work‑related preventative health care, work‑related counselling, migrant language training............... 143

58N....... Exempt benefits—emergency assistance........................................ 145

58P........ Exempt benefits—minor benefits................................................... 146

58PA..... Exempt benefits—worker entitlement contributions..................... 148

58PB..... Meaning of approved worker entitlement funds............................. 148

58PC..... Exempt benefits—existing worker entitlement funds..................... 151

58Q....... Exempt benefits—long service awards........................................... 152

58R....... Exempt benefits—safety awards.................................................... 153

58S........ Exempt benefits—trainees engaged under Australian Traineeship System 154

58T....... Exempt benefits—live‑in domestic workers employed by religious institutions or by religious practitioners 155

58U....... Exempt benefits—live‑in help for elderly and disadvantaged persons 156

58V....... Exempt benefits—food and drink for non‑live‑in domestic employees 157

58W...... Exempt benefits—deposits under the Small Superannuation Accounts Act 1995 157

58X....... Exempt benefits—provision of certain work related items............ 158

58Y....... Exempt benefits—membership fees and subscriptions.................. 159

58Z....... Exempt benefits—taxi travel.......................................................... 159

58ZB..... Exempt benefits—approved student exchange programs............... 159

58ZC..... Exempt benefits—remote area housing benefits............................. 160

58ZD.... Exempt benefits—meals on working days..................................... 162

Division 14—Reduction of taxable value of miscellaneous fringe benefits 164

59.......... Reduction of taxable value—remote area residential fuel............... 164

60.......... Reduction of taxable value—remote area housing.......................... 166

60AA.... Guideline price for repurchase of remote area residential property 169

60A....... Reduction of taxable value—remote area holiday transport fringe benefits subject to ceiling 170

61.......... Reduction of taxable value—remote area holiday transport fringe benefits not subject to ceiling 173

61A....... Reduction of taxable value—overseas employment holiday transport 175

61B....... Reduction of taxable value of certain expense payment fringe benefits in respect of relocation transport 178

61C....... Reduction of taxable value—temporary accommodation relating to relocation 179

61D....... Reduction of taxable value of temporary accommodation meal fringe benefits 183

61E........ Reduction of taxable value of certain expense payment fringe benefits in respect of employment interviews or selection tests................................................................................................ 184

61F........ Reduction of taxable value of certain expense payment fringe benefits associated with work‑related medical examinations, work‑related medical screenings, work‑related preventative health care, work‑related counselling or migrant language training................................................................. 185

61G....... Reduction of taxable value of fringe benefits if certain deductions relating to payments to associates are not allowed........................................................................................................ 186

62.......... Reduction of aggregate taxable value of certain fringe benefits....... 187

63.......... Reduction of taxable value of living‑away‑from‑home food fringe benefits 187

63A....... Reduction of taxable value in respect of entertainment component of certain fringe benefits 188

65A....... Reduction of taxable value—education of children of overseas employees 189

Division 14A—Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes 192

65CA.... Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes 192

65CB..... Amendment of assessments........................................................... 195

Division 14B—Reducible fringe benefits relating to remote area home repurchase schemes 196

65CC..... Reducible fringe benefits relating to remote area home repurchase schemes 196

Division 15—Car substantiation rules for otherwise deductible provisions 197

65D....... Car substantiation rules.................................................................. 197

65E........ No compliance with substantiation rules in log book year of tax unless log book records and odometer records are maintained....................................................................................... 197

65F........ No compliance with substantiation rules in non‑log book year of tax unless log book records kept in previous log book year of tax....................................................................................... 197

Part IIIA—Rebates of tax 199

65J........ Rebate for certain non‑profit employers etc.................................. 199

Part IV—Liability to tax 207

66.......... Liability to pay tax......................................................................... 207

67.......... Arrangements to avoid or reduce fringe benefits tax....................... 207

Part V—Returns and assessments 210

Division 1—Returns 210

68.......... Annual returns................................................................................ 210

69.......... Further returns................................................................................ 210

70.......... Keeping records of indirect tax transactions................................... 210

70D....... Tax agent to give taxpayer copy of notice of assessment.............. 210

Division 2—Assessments 212

72.......... First return deemed to be an assessment........................................ 212

73.......... Default assessments....................................................................... 212

74.......... Amendment of assessments........................................................... 213

74A....... Effect of public ruling..................................................................... 214

74B....... Effect of private ruling.................................................................... 215

74C....... Assessment where conflicting rulings............................................. 215

74D....... Final Tribunal decision about private ruling conclusive................. 216

74E........ Final court order about private ruling conclusive........................... 216

74F........ Final court order about Commissioner discretion........................... 217

75.......... Refund of amounts overpaid.......................................................... 218

76.......... Amended assessment to be an assessment..................................... 218

77.......... Notice of assessment...................................................................... 219

78.......... Validity of assessment.................................................................... 219

78A....... Objections....................................................................................... 219

An Act relating to the assessment and collection of the tax imposed by the Fringe Benefits Tax Act 1986, and for related purposes

Part I—Preliminary

1 Short title [see Note 1]

This Act may be cited as the Fringe Benefits Tax Assessment Act 1986.

2 Commencement [see Note 1]

This Act shall come into operation on the day on which it receives the Royal Assent.

2A Application of the Criminal Code

Chapter 2 of the Criminal Code applies to all offences against this Act.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Part II—Administration

3 General administration of Act

The Commissioner has the general administration of this Act.

4 Annual report

(1) The Commissioner shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the working of this Act, including any breaches or evasions of this Act of which the Commissioner has notice.

(2) The Minister shall cause a copy of a report furnished under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

(3) For the purposes of section 34C of the Acts Interpretation Act 1901, a report that is required by subsection (1) to be furnished as soon as practicable after 30 June in a year shall be taken to be a periodic report relating to the working of this Act during the year ending on that 30 June.

5 Secrecy

(1) In this section, officer means a person:

(a) who is or has been appointed or employed by the Commonwealth; or

(b) to whom powers or functions have been delegated by the Commissioner;

and who, by reason of the appointment or employment or in the course of the employment, or by reason of, or in the course of the exercise of powers or the performance of functions under, the delegation, as the case may be, may acquire or has acquired information with respect to the affairs of any other person disclosed or obtained under or for the purposes of this Act.

(2) For the purposes of this section, a person who, although not appointed or employed by the Commonwealth, performs services for the Commonwealth shall be taken to be employed by the Commonwealth.

(3) Subject to subsection (5), a person who is or has been an officer shall not directly or indirectly:

(a) make a record of any information with respect to the affairs of a second person; or

(b) divulge or communicate to a second person any information with respect to the affairs of a third person;

being information disclosed or obtained under or for the purposes of this Act and acquired by the person by reason of the person’s appointment or employment by the Commonwealth or in the course of such employment, or by reason of the delegation to the person of powers or functions by the Commissioner, or in the course of the exercise of such powers or performance of such functions, as the case may be.

Penalty: $10,000 or imprisonment for 2 years, or both.

(3A) Subsection (3) does not apply to the extent that the person makes the record of the information, or divulges or communicates the information, for the purposes of this Act or in the performance of the person’s duties as an officer.

Note: A defendant bears an evidential burden in relation to the matters in subsection (3A), see subsection 13.3(3) of the Criminal Code.

(4) Except where it is necessary to do so for the purpose of carrying into effect the provisions of this Act, a person who is or has been an officer shall not be required:

(a) to produce in court any document made or given under or for the purposes of this Act; or

(b) to divulge or communicate to a court a matter or thing with respect to information disclosed or obtained under or for the purposes of this Act;

being a document or information acquired by the person by reason of the person’s appointment or employment by the Commonwealth or in the course of such employment, or by reason of the delegation to the person of powers or functions by the Commissioner, or in the course of the exercise of such powers or the performance of such functions, as the case may be.

(5) Nothing in subsection (3) shall be taken to prohibit the Commissioner, a Deputy Commissioner or a person authorised by the Commissioner or a Deputy Commissioner from communicating any information to:

(a) the Tribunal in connection with proceedings under an Act of which the Commissioner has the general administration; or

(b) a person performing, as an officer, duties arising under an Act of which the Commissioner has the general administration, or regulations under such an Act, for the purpose of enabling the person to perform those duties; or

(c) the Secretary of the Department dealing with matters relating to the social security law (within the meaning of the Social Security Act 1991), for the purpose of the administration of that law; or

(d) the Chief Executive Officer of the Commonwealth Services Delivery Agency established by the Commonwealth Services Delivery Agency Act 1997, for the purpose of the administration of the social security law (within the meaning of the Social Security Act 1991).

(6) For the purposes of subsection (3), an officer shall be deemed to have communicated information to another person in contravention of that subsection if the officer communicates the information to any Minister.

(7) An officer shall, if and when required by the Commissioner or a Deputy Commissioner to do so, make an oath or declaration, in a manner and form specified by the Commissioner in writing, to maintain secrecy in conformity with the provisions of this section.

Part IIA—Core provisions

Division 1—Working out an employer’s fringe benefits taxable amount

5A Simplified outline of this Division

The following is a simplified outline of this Division:

This Division explains how to work out an employer’s fringe benefits taxable amount for a year of tax. This is the amount on which the employer must pay fringe benefits tax (see section 66).

Years of tax before year of tax 2000‑2001

5B Working out an employer’s fringe benefits taxable amount

(1) An employer’s fringe benefits taxable amount for a year of tax earlier than the year of tax beginning on 1 April 2000 is the amount worked out using the formula:

Note: Other provisions affect the fringe benefits taxable amount. For example, see section 124 (about assessments).

Year of tax 2000‑2001 and later years

(1A) Subject to subsection (1D), an employer’s fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax is the sum of the subsection (1B) amount and the subsection (1C) amount.

Note: Other provisions affect the fringe benefits taxable amount. For example, see section 124 (about assessments).

Subsection (1B) amount

(1B) The subsection (1B) amount is the amount worked out using the formula:

Subsection (1C) amount

(1C) The subsection (1C) amount is the amount worked out using the formula:

Increase in fringe benefits taxable amount for year of tax 2000‑2001 and later years

(1D) If any benefits provided in respect of the employment of an employee of an employer are exempt benefits under section 57A, the employer’s fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax as worked out under subsection (1A) is increased by the employer’s aggregate non‑exempt amount for the year of tax concerned.

How to work out aggregate non‑exempt amount

(1E) An employer’s aggregate non‑exempt amount for the year of tax is worked out as follows.

Method statement

Step 1. For each employee, add:

(a) the individual grossed‑up type 1 non‑exempt amount (see subsection (1F)) in relation to the employer for the year of tax; and

(b) the individual grossed‑up type 2 non‑exempt amount (see subsection (1G)) in relation to the employer for the year of tax.

The result is the individual grossed‑up non‑exempt amount for the employee.

Step 2. If:

(b) the employer is a government body and the duties of the employment of one or more employees are as described in paragraph 57A(2)(b) (which is about duties of employment being exclusively performed in or in connection with certain hospitals); or

(c) the employer is a public hospital; or

(ca) the employer provides public ambulance services or services that support those services and the employee is predominantly involved in connection with the provision of those services; or

(d) the employer is a hospital described in subsection 57A(4) (which is about hospitals carried on by non‑profit societies and associations);

subtract $17,000 from the individual grossed‑up non‑exempt amount for each employee of the employer referred to in paragraph (c), (ca) or (d), or each employee referred to in paragraph (b), for the year of tax. However, if the individual grossed‑up non‑exempt amount for such an employee is equal to or less than $17,000, the amount calculated under this step for the employee is nil.

Step 3. If step 2 does not apply in respect of one or more employees of the employer:

(a) reduce the individual grossed‑up non‑exempt amount for each such employee for the year of tax beginning on 1 April 2000 to zero; and

(b) reduce the individual grossed‑up non‑exempt amount for each such employee for a later year of tax by $30,000, but not below zero.

Step 4. Add together the amounts calculated under steps 2 and 3 in relation to the employees of the employer. The total amount is the employer’s aggregate non‑exempt amount for the year of tax.

Individual grossed‑up type 1 non‑exempt amount

(1F) For the purposes of step 1 in the method statement in subsection (1E), the individual grossed‑up type 1 non‑exempt amount of an employee in relation to the employer for the year of tax is:

Individual grossed‑up type 2 non‑exempt amount

(1G) For the purposes of step 1 in the method statement in subsection (1E), the individual grossed‑up type 2 non‑exempt amount of an employee in relation to the employer for the year of tax is:

Working out the type 1 individual base non‑exempt amount

(1H) An employee’s type 1 individual base non‑exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 3 of the method statement in subsection (1K) and step 3 of the method statement in subsection (1L).

Working out the type 2 individual base non‑exempt amount

(1J) An employee’s type 2 individual base non‑exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 4 of the method statement in subsection (1K) and step 4 of the method statement in subsection (1L).

Working out the subsection (1K) amounts

(1K) An employee’s subsection (1K) amounts for the year of tax are worked out as follows.

Method statement

Step 1. Work out under subsection 135Q(3) for each of the employer’s employees the amount that would be the employee’s individual fringe benefit amount for the year of tax in respect of the employee’s employment by the employer if subsection 135Q(1) were amended:

(a) by omitting “or 58”; and

(b) by omitting “one of those sections” from paragraph (b) and “those sections” from paragraph (c) and substituting in each case “that section”.

Step 2. Identify the benefits taken into account in step 1 that are GST‑creditable benefits (see section 149A).

Step 3. So much of the amount worked out under step 1 that relates to the benefit