Fair Go: Petrol vouchers for North Shore Hospital volunteers dry up

In organisations all over New Zealand, volunteers are no longer a nice extra, they're essential to key services, whether it's firefighting, guide dog training or helping in the hospital.

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Waitemata District Health Board says it’s not a matter of money – so what’s the issue? Source: Fair Go

The volunteers working for Waitemata District Health Board are no exception.

Michael Cairns-Cowan has helped anxious patients who can't find their way to wards, and offered reassurance to others, for some eight years now.

"We've been told so often by the CEO that without volunteers they couldn't run the hospital. We help to run so many different areas now." That includes offering comfort to elderly patients who don't have any family on what's known as the frail care ward.

Shirley Williams loves that side to her job, and seeing how much it helps. "It's learning what help people need and just talking to them," she explains.

They enjoy their work and have felt highly valued. Not least because the DHB was giving each volunteer a $10 petrol voucher for each four-hour shift they did to go towards the cost of travel. But in July, those vouchers abruptly stopped.

On behalf of most of the 30 or so volunteers at North Shore Hospital, Michael and Shirley queried why this was happening.

Meetings were arranged for the volunteers, and they were told that the change was due to the DHB becoming aware of the tax implications of giving vouchers on a regular basis that aren't a direct reimbursement for actual travel costs.

So nothing to do with cost-saving? It turns out the DHB had rung Volunteering Auckland to discuss best practice and the issue of tax arose. An employee of Volunteering Auckland said the DHB explained, "the $10 voucher was becoming too much money - the costs were adding up".

This would be completely understandable due to the escalating costs of running a health service but David Price, Director of Patient Experience refutes this whole-heartedly. He states, "the volunteer money is there waiting to be spent. It's not a cost-saving issue at all and we're looking forward to being creative at how we reward volunteers' time".

He added that stopping the petrol vouchers was "one of the most challenging decisions I've ever made. We know how much they're valued by volunteers, but the advice we have from our legal and finance departments, and the IRD is that if payments are regular and aren't in relation to actual costs then they are taxable".

Being a voucher for a set amount, they don’t reflect actual costs. Some volunteers live close by, but some live as far away as the Hibiscus Coast – that's a round trip of about 50km. But there were no complaints from any volunteers (they all appreciated getting the vouchers) and there were no problems with IRD.

Accordingly, Michael and Shirley asked Fair Go to look into the issue. They felt some volunteers would stop doing their shifts if they had to fork out for petrol, as many were on a basic New Zealand government pension, and petrol was increasingly expensive.

So Fair Go contacted the IRD who didn't dispute the claims made by the DHB about regular payments, but added that "an organisation can make a reasonable estimate of the cost typically incurred by their volunteers and pay all volunteers with a voucher of the same value. If an organisation can reasonably say the vouchers are to reimburse the volunteer for the costs the volunteer had likely incurred then the vouchers can be given tax free".

This latest advice suggests the IRD is happy with an estimate of costs, and subsequently with vouchers of a set amount being given tax free. So we put this to the DHB. They say the pot of money for volunteers won’t be reduced, so no issue there, and in their words, “we know how much [vouchers] are valued by volunteers”. Surely it’s a way of keeping volunteers happy.

However, the DHB said it was sticking to the advice it had received from its own accountants that the vouchers were regular payments and that they would lead to personal tax consequences for volunteers. Those personal tax consequences would mean volunteers having to do tax returns, something they see as a burden they’d rather not have.

So while David Price says continuing with vouchers is an option if the volunteers take on their tax responsibilities, he says he’d prefer to find an alternative system that’s fair to all volunteers. They want to hold meetings to suggest ways of continuing to recognise them, such as a birthday gift, or end of year party. Michael Cairns-Cowan pointed out this would be quite some birthday gift as most volunteers do one or two shifts a week, meaning an expenditure of $500 to a $1000! But Michael and Shirley say volunteers don’t want any expensive gifts, they simply want help with the cost of travel.

To be clear, the DHB isn’t incorrect in what it's saying, and it has the support of Volunteering Auckland. But it's one approach, and Fair Go believes another legitimate approach would be to run with the advice IRD offered to Fair Go, which would allow tax-free vouchers to still be given. An independent accountant would seem to back this idea saying, "how ridiculous! The IRD have much bigger fish to fry than making pensioners record petrol vouchers!".