In accordance with Scott Morrison’s speech to Parliament on 22 October 2020 in relation to the National Redress Scheme for Institutional Child Sexual Abuse (the “Redress Scheme”), the government is looking to expand the scope of institutions which will be obliged to join the Redress Scheme. At the moment, the proposed legislation is in draft form and open to public opinion until 8 January 2021. However, should the legislation be passed, it will have significant implications for many charities, not-for-profits, and religious entities.
The expansion of the scope of institutions required to join the Redress Scheme is planned to come about via the Australian Charities and Not-for profits Commission Amendment (2021 Measure No. 1) Regulations 2021. The proposed amendments would amend the Australian Charities and Not-for-profits Commission Regulation 2013 by adding a new “Governance Standard 6” to the existing 5 ACNC Governance Standards.
The effect of the addition of Governance Standard 6 is that a registered entity would have to take reasonable steps to become a participating non-government institution if the entity is, or is likely to be, identified as being involved in the abuse of a person.
An entity is, or is likely to be, identified as being involved in the abuse of a person if:
- There is an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018; or
- Information is requested under sections 24 or 25 of the same Act. Section 24 covers instances where information is requested from a person making an application for redress. Section 25 deals with a request for information from an institution.
Governance Standard 6 will only apply to entities that have a redress claim made against them, or are likely to have a redress claim made against them. However, it should be noted that the addition of Governance Standard 6 requires the institution to join the Redress Scheme even if the application is invalid. As such, the threshold for the requirement of institutions to join the Redress Scheme would become quite low.
In a “Frequently Asked Questions” memo published with the draft legislation, the concept of an institution “likely to be identified as being involved in the abuse of a person” is expanded, and notes:
“Entities considered likely to be identified as being involved in the abuse of a person include those entities who have been named in the Royal Commission into Institutional Responses to Child Sexual Abuse, but have not yet had a claim made against them. Entities may also become aware that an application is likely to be made against them, for example, if they are informed directly by a person that the person is going to make an application for redress, or the person is otherwise involved in litigation with the entity about past abuse. This could occur, for example, in the course of past or present legal proceedings.” (emphasis added)
In addition to the abovementioned proposed changes, the Government is proposing the introduction of legislation which would amend the definition of a basic religious charity (“BRC”) in the Australian Charities and Not-for-Profits Commission Act 2012. The amendment of the definition would remove a religious institution’s eligibility to be classified as a BRC if it has been named in an application for redress but refuses to join the Redress Scheme. Governance Standards have not previously applied to BRCs, but would apply if the proposed legislation is passed and the BRC in question had been named in an application for redress.
Under the proposal, if the BRC in question is named in an application for redress but does not join the Redress Scheme, the ACNC Commissioner may remove their registration. This is significant as it may cause the entities to lose access to certain exemptions, concessions, and benefits including charity tax benefits.
The proposed legislation is in draft form and open to public opinion until 8 January 2021. Further updates will follow in early 2021.