1. Introduction

As part of the University's salary packaging scheme, an employee may apply to enter into a novated leasing arrangement with Custom Fleet. The program provides employee's with a flexible approach to the acquisition of a motor vehicle (new or used, with various lease options).

Custom Fleet has been selected as the company to implement and manage the University’s novated leasing program. Custom Fleet has extensive experience in fleet management with a broad range of public and private sector clients.

For further information please refer to the Custom Fleet website or alternatively contact the Custom Fleet Help Desk on 1800 811 922 or 1800 812 681.

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2. Conditions

Employees are able to apply for the following novated leases:

• a Fully Maintained Operating lease,
• a Fully Maintained Finance lease
• a Budgeted Finance lease

For more information regarding the above lease options please refer to the Custom Fleet website. The Custom Fleet Help Desk can also be contacted on 1800 811 922.

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3. Operating Principles

Employees are encouraged to, and are responsible for, seeking independent financial advice on whether entering into a novated lease arrangement is beneficial.

It is the employees responsibility to be aware of the terms and conditions of the novated lease. Conditions are fully outlined in the Custom Fleet Lease documents...

Custom Fleet will organise the Novated Lease process from start to finish. They will provide all required information, prepare lease quotations, source new motor vehicles where appropriate, prepare all required documentation, organise delivery of the vehicle and provide ongoing management services.

Further information and advice about the lease arrangements is available by either contacting either the Custom Fleet Account Manager on 1800 811 922 or 1800 812 891, or contact your local HR representative.

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4. What is a "Novated Agreement"

A Novated Lease is a three-way agreement between the employee, the employer and Custom Fleet. The basic principles of a Custom Fleet Novated Lease are:

• The employee leases the vehicle directly from Custom Fleet.
• The employee, employer and Custom Fleet sign a Novation Agreement.
• The employer undertakes to cover all agreed vehicle expenses during the employee's term of employment.

4.1 Establishing the lease

This arrangement is formalised by means of a novated agreement between three parties. Once approval has been received the following arrangement will occurs:

• Custom Fleet and employee enter into a head-lease arranged by Custom Fleet.
• The employee and employer enter into a Deed of Novation (Sub lease), arranged by Custom Fleet. This service is available online at the Custom Fleet website.
• The employer gains possession of the vehicle by way of the Deed of Novation (Sub-lease). The vehicle is then returned to the employee as a fringe benefit for either private or business use.
• The employer pays the employee's lease payments to Custom Fleet. This is the novation.
• Payments, including the appropriate FBT and running cost charges, are debited pre and post-tax (where-ever legally permitted) to the employee's remuneration package in accordance with the agreed budget.

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5. Procedures and Conditions for Establishing the Lease

5.1 Approval to initiate a lease

Staff wishing to novate lease a vehicle will need to complete both a Custom Fleet and University application form.

Approval will be subject to Custom Fleet’s terms and conditions and their assessment of the individual's financial position.

5.2 Initiating a lease

• The employee visits the Custom Fleet website to access more information and the available options in regards to novated leasing. The novated lease process is fully automated and is available online through their website.
• The first salary deduction is initiated and normal deductions will commence on vehicle delivery.

5.3 Payment for the lease

The HR Remuneration and Benefits team will organise the cost of the lease to be deducted from the employee's remuneration package.This will include lease costs and appropriate FBT.

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6. Complaint Resolutions

Any service concerns that employees may have with Custom Fleet should be directed to 1800 811 922 or visit the Custom Fleet website.

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7. General Conditions

7.1 Fines/Infringements

The employee is responsible for all traffic fines and infringements (cannot be packaged).

7.2 Arrangements for periods of leave without pay (LWOP)

Prior to any period of LWOP, the employee must make arrangements with the HR Remuneration and Benefits team for payments to be made during the leave. If this is not arranged the University may terminate the novation agreement and all payments, including the running costs, will then be the responsibility of the employee (out of after-tax financial resources).

7.3 Registration

The lease costs include registration. Vehicles packaged under an operating lease are registered in the name of Custom Fleet.

Vehicles packaged under a Finance Lease are registered in the employee's name using Custom Fleet's address, enabling all administration and renewals to be handled by Custom Fleet.

7.4 Insurance

All vehicles will be covered by Custom Fleet's comprehensive insurance cover. For details about excess payments please refer to Custom Fleet’s website.

7.5 Administrative Fee

The University will charge a fee to cover the administrative cost associated with the establishment and maintenance of the lease and the FBT reconciliation.

Please refer to the HR32L (.doc) Salary Packaging: Application & Agreement for a Motor Vehicle Novated Lease form.

8. Fringe Benefits Tax

The FBT payments will be calculated based on your estimated kilometres and a provision toward FBT is deducted each fortnight as part of the lease payment.

An annual FBT Reconciliation will be undertaken and any liability will be deducted/paid in the next available pay.

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9. Arrangements on Cessation of Employment

In the event of cessation of employment with the University, the University will notify Custom Fleet. This will discontinue the sub-lease and novated agreement. All future payments and expenses will be your responsibility.

Lump sum final payments will be held until Custom Fleet forward the final lease account reconciliation.

The University will have the discretion to hold monies in association with the lease arrangement from the employee's final salary until a final reconciliation is performed.

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10. Further Information

Novated leasing further information.

You are also encouraged to access the Custom Fleet website for additional information.

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11. Forms

All initial forms can be obtained from the Custom Fleet website.

Please refer to the HR32L (.doc) Salary Packaging: Application & Agreement for a Motor Vehicle Novated Lease form.

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