What are my options if I have to take Leave Without Pay and I will not have salary contributions on my novated lease?
Firstly, we need to establish whether your employer will allow you to maintain your novated lease arrangement without any salary deductions and provided your novated lease account balance is sufficient to do so.
If this is allowed, the following three options may be available to you, depending on your individual circumstances. If your employer requires you to cease your novation arrangement whilst on LWOP, please skip to Option 2 or 3.
Please have your ‘stand-down notice’ from your employer ready to send to us so we can assist you with your individual circumstances.
Option 1: Maintain novation arrangements if you have a sufficient account balance
If you have a sufficient novated lease account balance, you may continue to utilise your available balance towards the minimum running costs of your vehicle which include:
- Finance payments (if these are not deferred – see below)
- Comprehensive insurance arranged by sgfleet
- LeaseGuard (insurance providing protection in the event of involuntary redundancy)
If your account balance is insufficient, options will be available for you to top up your account balance. This can be done by making a direct post-tax payment into our nominated bank account. Any additional post-tax top up payments will automatically offset any additional FBT liability over this period.
We strongly recommended that, if you have comprehensive insurance arranged by sgfleet, or LeaseGuard (insurance providing protection in the event of involuntary redundancy), you continue to maintain enough account balance to support these payments at a minimum so that your coverage continues throughout this period.
You can also apply for a finance payment deferral during this time. This will help reduce deductions from your novated lease account, so it can remain open longer. Options on how to do this will be provided to you during your discussions with an sgfleet representative. This will be assessed on a case by case basis to support your personal circumstance.
Other running costs such as fuel, maintenance and registration may continue to be paid through your account balance if there are funds to support this and this will need to be assessed at the time. However, it is more important to maintain finance payments (if not deferred) and insurance payments so, even if you have funds available, please consider paying for other running costs directly. These receipts can be claimed for future reimbursement when salary contributions re-commence.
Please note: Additional Fringe Benefit Tax (FBT) liability may result. This is because your scheduled pre- and post-tax salary deductions have ceased and therefore you will have no post-tax salary deductions to offset FBT liability during this period (applicable if you lease is on the Employee Contribution Method).
It is therefore recommended that you retain any receipts in relation to post-tax payments towards your vehicle expenses, as you can use these to offset any FBT liability.
Option 2: De-novate your Novated Lease
If your novated lease account balance cannot support Option 1 and you are not in a position to top it up during this period, sgfleet will be required to de-novate your lease. At this point, all services will be stopped and reconciled back to your employer and a direct arrangement will need to be put in place with the financier.
In this event, LeaseGuard coverage will be cancelled and you will also be required to seek your own comprehensive insurance.
Please note: This option will still allow you to apply for a finance payment deferral. However, new terms and conditions may apply with the financier and the decision may be subject to a full credit assessment and approval.
Option 3: Pay out your lease
If you wish to pay out your lease, we can provide you with an early termination payout invoice at any time. Upon payment, you will then own the vehicle outright and you can choose to either keep the vehicle or sell it at a time that suits you.
I have insurance providing protection in the event of involuntary redundancy – what does this cover?
How should I contact you to make arrangements in the event that my employment circumstances change?
We have a dedicated team to assist customers whose employment has been impacted. To initiate discussions, please email a copy of your stand-down notice from your employer and any questions to
[email protected]. A member of our team will then be in contact with you as quickly as possible.
If you have any additional questions, you can also contact our Novated Driver Support Team on 1300 138 235 and select option 4.
I need to speak to an sgfleet representative about a matter unrelated to COVID-19 – can I still call?
Yes, if your query cannot be managed via the self-serve options outlined above, call us on 1300 138 235 between 8:30am – 5:30pm, Monday – Friday or visit
our website for the relevant contact details depending on the nature of your enquiry.
We appreciate your patience as we work through higher than usual call and email volumes.
Please note: Our general
FAQs page is also a good reference point for questions about novating and managing a car.
I am interested in buying a new car – can I still do so?
Absolutely. If you’re in the position to make a move, these unprecedented times have led to strong car buying conditions. With car manufacturers keen to find ways to keep stock turning over, expect to see some major discounts on offer.
To see the latest novated deals pre-negotiated by
sgfleet exclusively for our customers, visit our
specials page.