COVID-19: Update for Charities following the special ACNC Advisor’s Forum (as of 27/03/2020)

Cash flow boost for charities – PAYG credit

New charities registered with the ACNC after 12 March 2020 are still eligible.

Consider other payments that may be reportable in your Activity Statement other than salary & wages – e.g. Directors fees, voluntary withholding payments to contractors.

For more information click here

ACNC COVID-19 landing page

See: https://www.acnc.gov.au/node/5781959

This page is being regularly updated with useful information and links for charities including for example blanket extension for lodging your AIS.

Treasury update

Men’s and Women’s Shed law reform will not occur on 1 July 2020 but sometime after 12 August 2020 on a date not yet known.

DGR reforms (including disparate DGR registers moving to the ACNC) will now not occur by 1 July 2020 but a later date to be advised.

Law reforms in the Government response to the ACNC Legislation Review are on hold for now.

These delays are understandable in the circumstances.

Urgent law reform needed

In my view, urgent law reform is needed to:

  • Extend the proposed ‘for-profit’ six month insolvent trading safe harbor law reforms to the not-for-profit and charitable sector (regardless of entity type). Charity governors need to be able to continue to operate their charity in the ordinary course of business during this time without the risk of personal liability from dipping temporarily below the insolvent trading line. Remember these governors do not personally gain from the “up side” as for-profit governors may. All the more reason that their personal assets should achieve some reasonable protection during this period. Additionally many charities, based on the manner in which they are structured, do not have a voluntary administration lever to pull but need to go straight to receivership or liquidation. None of this encourages governors of charities (most of whom are volunteers) to ‘stay the course’ at the very time when stability of governance is essential. This law reform should provide safe harbor from relevant duties however arising whether by statute, common law, equity or contract.
  • Introduce machinery in the ACNC legislation to allow remote meetings of charity governors and members (regardless of entity type). Most charity Governing Rules do not deal with this to the extent required. The ability to make decisions in a manner beyond dispute is more important than ever for the proper and efficient application of charitable resources to those most in need during this COVID-19 crisis.

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