FAQ: Healthscope Salary Packaging Proposal

Updated 22.09.25

HSU National Office have provided the following helpful FAQ for those affected by the Healthscope receivership

Healthscope Salary Packaging Proposal FAQs

• What is Salary Packaging?

Salary packaging allows employees to receive part of their income in the form of benefits (like mortgage repayments, rent, or living expenses) before tax is applied. This can reduce taxable income and increase take-home pay.

In Australia, not-for-profit organisations can offer more generous salary packaging benefits due to Fringe Benefits Tax (FBT) exemptions – up to $9,010 per year for general living expenses and $2,650 for meals/entertainment.

• How would salary packaging work at Healthscope?

Healthscope proposes a shared arrangement between employees and the new not-for-profit entity, PurposeCo, where:

• PurposeCo retains up to 90% of the total financial benefit of salary packaging.
• Employees receive 10% of the benefit 

This is referred to as a 90/10 split.

• What does the 90/10 split mean?

Let’s say:

• You earn $80,000 per year.
• You opt into salary packaging.
• The maximum benefit available is $5,900 (based on packaging $9,010 of expenses).

Before salary packaging:

• You pay full income tax on your $80,000.
• Your take-home pay is based on that.

With salary packaging (90/10 Split)

• You still earn $80,000.
• You package $9,010 of that toward eligible expenses (e.g. rent, mortgage, bills).
• Because of the FBT exemption, that $9,010 is not taxed – it’s treated as a tax-free benefit.
• The tax saving from this packaging is $5,900.
• Healthscope keeps 90% of that saving: $5,310.
• You only keep 10%: $590 – this is extra take-home pay.

Your base salary stays the same. Your superannuation stays the same. But you only get a small bonus of 10%, not the full 100% you are entitled to.

Take-home pay comparison table

Scenario	Base salary	Tax paid (approx)	Packaging benefit to employee	Take-home Pay
Without packaging	$80,000	$17,947	$0	$62,053
With packaging (90/10 Split)	$80,000	$17,947	$590	$62,643
With packaging (100/0 Split)	$80,000	$17,947	$5,900	$67,953

Healthscope 90% / Employees 10% Split: You get a modest boost of $590.

Healthscope 0% / Employees 100% Split: You get the full $5,900 benefit – a substantial increase in take-home pay.

• What percentage will employees be able to salary sacrifice if the proposal were to be accepted?

Employees will be able to salary package up to $9,010 per year for general living expenses under the Fringe Benefits Tax (FBT) exemption available to not-for-profit hospitals. This amount is not a percentage of salary, but a fixed cap set by the ATO.

For most employees, this equates to around 11–16% of their income being eligible for packaging, depending on their salary level. For example:

• On $80,000 salary: $9,010 is 11.3%
• On $55,000 salary: $9,010 is 16.4%

• Why would employees choose to salary sacrifice, knowing how much will go to the employer?

Employees might choose to opt in because:

• Even with the 90/10 split, they receive some financial benefit (e.g. $590 extra take-home pay).
• Healthscope is not being fully transparent about the split or its implications. Healthscope may provide financial services and advice to employees, but we recommend that employees seek independent financial advice.
• Healthscope is promoting it as the only way to support hospital sustainability and jobs, which may not be the case.

However:

• This is an unprecedented and unfair arrangement.
• It diverts the majority of the benefit away from workers, who are the ones entitled to it.
• It sets a dangerous precedent where workers are expected to bail out private companies in financial distress.

• Healthscope says that salary packaging arrangements are common in the not-for-profit health sector, and sharing arrangements have also been used previously in the sector (for example, NSW Health).

Yes, sharing arrangements have existed, but this proposal is unprecedented in its structure and intent.

NSW Health:

• In 2002, NSW Health and unions agreed to a 50/50 split of salary packaging benefits.
• The savings were used to fund wage increases for employees – not to cover employer debt.
• In 2023, the split shifted to 70% in favour of HSU members, and in 2024 to 100% – meaning all benefits now go to workers.

Why Healthscope’s proposal is different:

• It proposes a 90/10 split in favour of the employer – far worse than any public sector precedent.
• The savings are not used to improve wages or conditions – they are used to offset $1.6 billion in corporate debt.
• It sets a dangerous precedent: that private companies can use worker entitlements to fix financial mismanagement.

No HSU member should be left behind – and no worker should be asked to give up their entitlements to bail out a private employer.

• Healthscope say the 90/10 split is temporary. What guarantees will ensure that these splits will change, given that the ballot is only to vary the current entitlements?

Healthscope has stated that the 90/10 split is temporary, but no guarantees have been provided about if or when the arrangement will change. We have put these questions directly to Healthscope and received no answer.

There is no binding commitment, timeline, or mechanism to ensure the split improves for employees.

The ballot only seeks to vary current enterprise agreements to allow salary packaging – it does not lock in any future improvements to the split.

Employees are being asked to give up 90% of the benefit with no guarantee of future fairness.

Healthscope is in receivership, and the proposal is designed to offset corporate debt, not improve wages or conditions.

Once the EBA is varied, Healthscope has full control over the split – and workers have no legal recourse to demand a better deal.

This sets a dangerous precedent: that private companies can use worker entitlements to bail themselves out, without accountability or transparency.

Please contact VAHPA if you have any further questions or concerns.