That ICPA (Aust) advocate to the Department of the Prime Minister and Cabinet and relevant ministers to ensure that the Commonwealth’s recurrent school funding model includes provisions for boarding schools to receive a Fringe Benefits Tax (FBT) exemption on accommodation provided to essential boarding staff, where the school accommodates students from remote and very remote areas as defined by the Accessibility/Remoteness Index of Australia (ARIA) score.
In the past year, ICPA Federal Council identified the Fringe Benefits Tax (FBT) on boarding school staff accommodation as a Federal Focus issue. As part of this advocacy, during face-to-face delegations in Canberra, all relevant Senators and Ministers were extensively briefed on the matter, with comprehensive supporting documentation provided. This issue is therefore not new to the current government.
The nature of boarding schools is that they are primarily located in metropolitan areas. However, these schools enroll students from across Australia—predominantly from geographically isolated, remote, and very remote regions, as defined by the Accessibility/Remoteness Index of Australia (ARIA) score. For these students, boarding is not a choice but a necessity due to the absence of accessible local schooling options.
Under the current policy, schools that provide on-site residential accommodation to essential supervisory staff are subject to FBT on that housing. This taxation imposes unnecessary and disproportionate financial pressure on schools that are already working to support some of Australia’s most educationally disadvantaged students.
These increased operational costs are often passed directly onto families in the form of higher boarding fees, further compounding the financial burden on rural and remote families who already face significant expenses to access education.
ICPA calls for an exemption from FBT on residential accommodation provided to essential boarding staff, specifically for schools that serve students from rural, remote and very remote areas, as determined by ARIA.
Removing this tax would:
• Reduce operational costs for boarding schools;
• Enable schools to pass savings onto families through lower boarding fees;
• Assist in attracting and retaining qualified, committed staff in a demanding residential setting;
• Help ensure equitable access to education for isolated students.
Accommodation provided to essential supervisory staff at boarding schools is not a luxury or optional benefit—it is a core component of student care and safety. Therefore, boarding schools should not be penalised through FBT for providing this essential service
