Motor Vehicle Transition 2012

Transcription

1 Motor Vehicle Transition Fully Maintained Vehicles Contents of this booklet Key Changes to the Motor Vehicle Policy 2 What does this mean for me? 3 Novated Lease 6 Vehicle Approval Criteria 7 Examples of Novated Lease 8 Process 10 What next? 13 Page

2 Dear Colleague, The geography of Australia and New Zealand means our leaders travel far and wide and for this reason, we ve always ensured our team have safe and reliable transport to reach our stores, suppliers and customers across the business. As our business grows and changes, so do the needs of our team. For this reason we have recently reviewed and implemented a new vehicle policy. Effective from 27 February 2012 we will begin a transition away from providing Fully Maintained Vehicles, to provide eligible employees with a Car Allowance when their current leases expire. The Car Allowance replaces the existing FMV fl eet and will give you the same value of benefi t but now the choice is yours. At the same time as introducing the Car Allowance, we will also be introducing our new Novated Lease benefi t. This new benefi t gives you the option to salary sacrifi ce the cost of your vehicle with over 800 vehicles to choose from. Please read through this pack for a full understanding of the change, and how it might impact you. Grant O Brien Managing Director and Chief Executive Offi cer

3 Key changes to Motor Vehicle Policy As of 27 February 2012, Woolworths will be transitioning from providing a Fully Maintained Vehicle (FMV) to the provision of a Car Allowance for FMV eligible employees. Note: There is no change to Tool of Trade vehicles at this stage. A review of our Tool of Trade policy will be announced by 30 June The decision has been made to: Give employees the fl exibility in vehicle choice they have been asking for. Give employees the opportunity to use the allowance to increase their take home pay. Align our business to current market practice in terms of our vehicle offer in order to attract and retain talent. All we ask is that you have access to a suitable vehicle for business car travel, with the car allowance designed so you will not be out of pocket for business expenses. Car Allowance What is the Car Allowance? The Car Allowance is designed to fund the leasing of a vehicle including running costs for up to business kilometres per annum. Part time employees will be paid the Car Allowance on a pro-rata basis. The allowance is paid in equal amounts based on your current pay cycle (fortnightly, monthly) and is subject to tax and superannuation requirements. You do not have to track or submit anything to receive payment. You will start receiving the allowance once your lease has expired and you have returned the vehicle. The amount of Car Allowance you are eligible to receive is determined by your role and may change, if you change roles. Category Current FMV Allowance 1 Volkswagen Golf Ford Mondeo TDCi Zetec Toyota Prius $ Volkswagen Jetta Ford Mondeo TDCi Titanium 3 Volkswagen Jetta (High Spec) Volkswagen Passat $ $ Note: If you currently elect to trade up, or trade down, your Car Allowance will be paid on the original eligible category. 2

4 What does this mean for me? The Car Allowance provides you with fl exibility in the type and size of your vehicle, and how you choose to acquire it. With the allowance you have a number of options: Leasing a vehicle through our new novated lease program Leasing a vehicle privately Purchasing a vehicle privately Running a vehicle you already own and retaining the remaining allowance to increase your take home pay Under a Novated Lease, the typical requirements of running a vehicle e.g. registration, are funded under a single lease payment. Whereas to purchase a car privately requires the owner to fund these items separately. Funding the running of a vehicle FMV Private Purchase Novated Operating Lease Lease payment Purchase Insurance Registration Servicing Roadside assistance Tyre replacement Note: there are different types of Novated Lease. Refer to the information on the lease provider s website for details on what is included in each lease. There are multiple options to consider. We recommend that you seek independent fi nancial advice when determining which option is best for you. Expenses As the Car Allowance is designed to fund the vehicle and running costs, if you receive an allowance you will not be able to claim expenses for: Fuel or oil Damage, or wear and tear Fines Maintenance (e.g. servicing) Taxes (e.g. FBT) You can claim for business related expenses only: Parking Tolls (for business travel during work hours, not for travel to and from work. Check the policy for conditions.) 3

5 What about leave? The Car Allowance is paid during periods of paid leave, but not during periods of unpaid leave. Please refer to the Motor Vehicle Policy for more information. If you elect to take leave at half pay, your Car Allowance will continue to be paid on a pro-rata basis. Note: Paid leave does not include Government paid parental leave. What will I see on my payslip? Below is an example of how the car allowance will appear on a monthly payslip: 4

6 Below is an example of how the car allowance will appear on a fortnightly payslip: 5

7 Novated Lease What is a Novated Lease? A Novated Lease is an opportunity to salary sacrifice the cost of leasing a vehicle. Woolworths has entered into an arrangement with Custom Fleet to facilitate employee access to Novated Leases. Custom Fleet: Are owned by GE Capital Are the largest Fleet Manager in Australia and New Zealand Have Australia-wide fuel and repair network coverage Have significant buying power for new vehicles Are dedicated Novated Leasing specialists A Novated Lease is a three way agreement between you, Custom Fleet as the fi nancier and service provider and Woolworths. It enables you to pay for your motor vehicle running expenses and fi nance repayments out of pre-tax dollars. To be eligible for a novated lease you must: be an Executive, or salaried employee who is currently entitled to a FMV only salary sacrifi ce a maximum of 50% of Gross Salary (excluding STIP and including LAFHA where applicable) What is salary sacrifice? When you salary sacrifi ce you give up (sacrifi ce) a portion of your pre-tax salary in exchange for a benefi t, in this case, the payments towards a Novated Lease. By paying for a benefi t with your pre-tax salary, means you have more to spend because that portion of your salary has not had tax deducted. For example, if $1,000 of your salary was taxed at 30% you would have $700 to spend on a benefi t. By salary sacrifi cing that $1,000, you would not pay any tax on that amount and would therefore have $1,000 to spend on the same benefi t. 6

8 Vehicle Approval Criteria A Novated Lease provides fl exibility and choice with access to over 736 different new and used vehicles. To ensure your safety and continue to provide a greener choice, all vehicles available through Custom Fleet will meet the outlined criteria. New Vehicles All new vehicles available through Custom Fleet will meet the below criteria: Safety - Minimum ANCAP rating of 4 (the maximum ANCAP rating is 5) Environmental - Green Vehicle Guide (GVG) minimum rating of 3.5 (the maximum GVG rating is 5). This replaces the CO2 emission guidelines previously used to select our fl eet. The vehicle must not attract luxury car tax (LCT) - $57,466 total vehicle cost including optional extras, dealer delivery and GST - $57,467 to $75,375 classifi ed as Green Vehicles are excluded from LCT. Green Vehicles have fuel consumption of 7lt/per 100km or less. Used Vehicles All used vehicles available through Custom Fleet will meet the below criteria: Safety - Minimum ANCAP rating of 4 (the maximum ANCAP rating is 5) Environmental If the GVG rating Minimum 3.5 is not available for the vehicle it must meet the CO2 emission guidelines previously used to select our fl eet i.e. 224 grams per km or better. Vehicles must be approved for novation by Custom Fleet: - Must be purchased from a franchised authorised dealer or Custom Fleet - Less than 4 years old at the start of novation - Less than 7 Years old at the end of the novation The vehicle must not attract luxury car tax (LCT) - $57,466 total vehicle cost including optional extras, any applicable dealer delivery and GST. Insurance Today our FMV fleet is covered by QBE Insurance. If you apply to take out a Novated Lease with Custom Fleet, you will need to make a decision about insurance. The simple no fuss option is to select the car with fully comprehensive insurance, with insurance provided by Real Insurance which is part of Hollard Insurance Company. If this option is selected, the cost of insurance is included in your lease cost. As the cost of the insurance is included in the cost of the Novated Lease, it can therefore be salary sacrifi ced. A copy of the Real Insurance PDS is available on AllYours. You can also contact Real Insurance Monday to Friday, 8am-5pm (EST) on If you select own insurance, you will be responsible to source your own insurance and must present the insurance placement slip to to be able to take delivery of the vehicle from the dealer. Note: If you are under 25 years old and choose a high performance vehicle, you must organise your insurance personally, as you will not be covered by the Woolworths Novated Lease insurance program. 7

9 Examples of how Novated Lease may impact your take home pay are outlined below. These examples are indicative only and you should seek independent financial advice before entering into a Novated Lease agreement. Novated Lease - VW Golf 103 TDi Comfortline over 3 yrs and kilometres Excludes the impact of STIP and other earnings Novated Lease VW Jetta 103 TDi DSG over 3 yrs and kilometres Excludes the impact of STIP and other earnings 8

10 Process You will start receiving the Car Allowance once your lease has expired and you have returned the vehicle. This means that the timing of the transition from a FMV to an allowance will differ for employees. Your lease expiry date is listed on your fl eet statement provided by Custom Fleet each month. The date is listed under Lease End Date. Ordering Your Vehicle Novating a new vehicle up to $57,466 A quote for a vehicle can be obtained directly from the Custom Fleet website: 1. Visit 2. Use the Custom Fleet link to register for the Custom Fleet website. 3. Your login, password and pin will be ed to you. You can obtain as many quotes as you like. Once you are ready to proceed with an order you can do so online. When you place an order you will be asked to provide some details, including your salary and a scanned copy of a recent pay slip. Note: If you are an employee with a 457 visa your must ensure the lease expiry date is no later than your visa expiry date. Novating a new green vehicle ($57,467 to $75,375) There are a number of criteria that these vehicles need to meet. Adding optional extras may easily make the vehicle non compliant. Contact the Custom Fleet Novated Lease team directly on and they will run the quotes for you. Novating a used vehicle There are a number of criteria that these vehicles need to meet including where it is purchase from. Contact the Custom Fleet Novated Lease team directly on and they will run the quotes for you. 10

11 Vehicle Swapping In order to the support the transition from FMV to Car Allowance a temporary vehicle swapping scheme will be in place from 27 February 2012 to 29 January The swapping scheme is only open to FMV drivers with no less than 4 months remaining on their vehicle lease. If you wish to participate in the scheme you can only do so once. Therefore: If you want to retain access to a FMV past your current vehicle s lease expiry date, you can apply to swap your vehicle with an FMV driver who elects to transition earlier to a Car Allowance. If you want to access the Car Allowance prior to your current lease expiry date, you can apply to swap vehicles with another FMV driver whose vehicle s lease expiry date is earlier than your own. You can then access the Car Allowance once that lease has expired. To participate in the scheme you will need to complete the Swapping Scheme Application Form available on AllYours and send it to [email protected]. Applications will be reviewed monthly and if a match is found you will be contacted. Note: The Scheme does not guarantee you will receive a replacement FMV. You will be liable for any trade up / down impacts of the swapped vehicle. Swapping is on a fi rst come fi rst served basis. The physical exchange of vehicles must be conducted in your personal time. 11

12 Lease Expiry 6 Months You should consider your options and make a decision. If you choose a Novated Lease, place order for delivery of your new car at the expiry of the FMV lease. Note: it can take 4-5 months for imported vehicles to be delivered. 4 Months Benefi ts Offi cer contacts you to confi rm lease end date. 1 Month Benefi ts Offi cer contacts you to agree vehicle collection location, date and process. 2 Weeks Benefi ts Offi cer contacts you to confi rm vehicle collection details. Expiry Vehicle lease expires and Car Allowance activated. 12

13 What next? First, use your fl eet statement to determine your current lease end date. If: your lease expires before 31 March 2012 your car has been ordered and you will receive a new FMV. You have the option to retain your vehicle for the term of the lease, or apply to swap vehicles with another employee in order to access the Car Allowance earlier. your lease expires between 1 April and 31 July 2012 upon the expiry of your lease and return of your vehicle you will be paid the Car Allowance. You have the option to extend your current lease for four months, apply to swap vehicles with another employee (if more than 4 months is remaining on the lease), or move to the Car Allowance once your lease expires. your lease expires on or after 1 August 2012 upon the expiry of your lease and return of your vehicle you will be paid the Car Allowance. You have the option to apply to swap vehicles with another employee, or wait until lease expiry and move to the Car Allowance. You should seek independent fi nancial advice on the best option for you. You will be contacted directly prior to the end of your lease to discuss transition and the options available. More information: For more information on the Car Allowance and the options available to you please speak to your HR Representative. For more information on Novated Lease, please visit The site will have further information and a link to Custom Fleet for you to register your interest or call Custom Fleet on