The 2019-2020 Budget saw the Government announce plans to establish a DGR general category to enable Men’s Sheds and Women’s Sheds to access DGR status. This change will be implemented through an amendment to the Income Tax Assessment Act 1997. This amendment will be proposed in Schedule 1 of the Treasury Laws Amendment (2020 Measures No. 2) Bill 2020: Deductible Gift Category – Community Sheds (‘the Bill’).
This new category will apply to any public institutions that are registered charities and satisfy the definition of a community shed.
Requirements for DGR status
To be considered a community shed for DGR status, the explanatory materials outline that the public institution must:
- Have the dominant purposes of advancing mental health and preventing or relieving social isolation;
- Primarily advance these purposes through providing a physical location at which individuals are supported to work on projects and undertake other activities in the company of others; and
- Have open membership to members of the public.
This new category is distinguished from the pre-existing ‘health promotion charity’ (HPC) in that the eligibility criteria for HPC is much narrower – requiring charities to have a principal activity to promote prevention or control of mental health diseases.
How can a shed show it has a dominant purpose aligned with these requirements?
In order to show that a shed has a dominant purpose which is aligned with the requirements set out in Schedule 1, it is necessary that their governing documents show a dominant purpose consistent with advancing mental health and preventing or relieving social isolation. Other purposes must serve this purpose or be otherwise secondary.
A shed must give evidence supporting this purpose. This could be done in a number of ways, such as:
- Supporting members to understand mental health issues;
- Inviting guest speakers to provide talks on issues of mental health;
- Helping members access mental health information and assistance;
- Promoting and facilitating activities to encourage social connection.
There is no requirement for these sheds to provide professional mental health assistance, or to be part of a peak shed association.
Tax deductibility for donations of $2 or more to community sheds will commence once the proposed legislation has been passed through parliament. For more information about whether your community shed may qualify deductible gift recipient status, contact us on (07) 3252 0011.
If you have questions on Men’s sheds or Women’s sheds, contact us
Call us on (07) 3252 0011 and speak with one of our client engagement team to set up an appointment with our not-for-profit lawyers. We can conduct an initial consultation with you either in person or via video or teleconference.
Authors: Terri Morrow