What is a Special Disability Trust?

A Special Disability Trust (SDT) is a specific form of trust commonly used for beneficiaries who meet the statutory definition of “severe disability” under the Social Security Act 1991 (Cth) (‘Social Security Act’)¹. It is designed to provide financial support for care, accommodation and long-term welfare of an eligible beneficiary, commonly designated as a “Principal Beneficiary” while preserving the beneficiary’ entitlement to social security benefits, including the disability support pension. SDTs are frequently employed in succession planning, as they allow assets to flow seamlessly from the deceased estate into a protected legal structure for the ongoing benefit of the disabled beneficiary beyond the lifetime of parents or carers and finally to the residuary beneficiaries in accordance with the wishes of the donor(s).

Tax advantages of an SDT

The taxation regime applicable to SDTs further enhances their financial utility. Once an SDT is validly established with an eligible Principal Beneficiary, the Principal Beneficiary is deemed to be presently entitled to the income of the trust during their lifetime², and the trustee is assessed on the net income of the trust (including capital gains) at the Principal Beneficiary’s marginal tax rate³. This ensures that the trust’s income is taxed at Principal Beneficiary’s marginal tax rate rather than at the penalty rates otherwise assessed to the trustee.

Further, any capital gain from a transfer of a capital gains tax asset to a SDT or a trust that becomes a SDT as soon as practicable after the transfer, is disregarded. In many jurisdictions, stamp duty relief is also available for eligible transfers.

Estate Planning and Asset Protection Advantages

From an estate planning perspective, SDTs serve as a secure, transparent, and enduring mechanism for protecting the welfare of individuals with severe disabilities. The trust structure ensures that the assets are used solely for the reasonable care and accommodation for the principal beneficiary.

The SDT also enables continuity of financial support and care beyond the lifetime of parents or carers, providing families with peace of mind that their loved one’s future needs will be met. Furthermore, the terms of the trust may specify how residual assets are to be distributed upon the death of the principal beneficiary.

So what’s the catch?

Apart from the highly restricted eligibility criteria, limited ability on use of funds outside of care and accommodation needs of the Principal Beneficiary – i.e discretionary spending limited to $14,750 per annum (as at 1 July 2025) and stringent compliance rules to operate, we have also seen a common theme of certain uncertainties arising in relation to SDTs as to:

1. what would happen to the funds in the SDT when the Principal Beneficiary has died;
2. how any income derived by an SDT post Principal Beneficiary’s death is assessed, and
3. who pays the tax and at what rate.

Consequences of Principal Beneficiary’s death

An SDT generally terminates upon the death of the principal beneficiary or when the trust’s funds are fully expended. At that point, the trust immediately ceases to qualify as a SDT under the Social Security Act.

Upon termination, the SDT ‘vests’, and the principles applicable to trust vesting should apply. ‘Vesting’ refers to the vesting of an interest rather than a position. An interest is regarded as having vested when:

1. the beneficiaries or transferees have been ascertained⁴;
2. all conditions precedent to the creation or transfer of the interest have been satisfied⁵; and
3. in the case of a class gift, the quantum of each beneficiary’s share has been determined⁶.

Vesting of Special Disability Trusts

The vesting of an SDT does not automatically result in the termination of the trust or the creation of a new trust. Vesting merely signifies that the beneficiaries’ interests have become fixed, not that the trust has ceased to exist⁷. In Taxation Ruling TR 2018/6: Income tax – trust vesting – consequences of a trust vesting, the Commissioner takes the view that where a trustee continues to hold property for takers on vesting, the property is held on the same trust as existed pre-vesting, albeit the nature of the trust relationship changes. The trustee’s role transitions from a duty to properly consider whether to distribute the net income of the trust in accordance with the discretionary power of appointment, to a duty to hold the whole of the capital and income for the benefit of the relevant beneficiaries.

Vesting itself does not compel the immediate transfer of trust property, however, beneficiaries are entitled to call for the transfer of the trust assets as soon as practicable once their interests become fixed⁸.

Upon vesting, the SDT’s assets vest in accordance with the terms of the trust deed – i.e in the residual beneficiaries specified in the trust deed, in the proportions nominated by the donor(s). This nomination can generally be found in Schedule B of the model SDT deed as prescribed pursuant to the Social Security Act.

Assessment of income upon vesting

From a taxation perspective, upon vesting, the special tax concessions afforded for SDTs cease to apply, and any income derived by the trust post Principal Beneficiary’s death is taxed under general trust taxation rules in Division 6 of Income Tax Assessment Act 1936 (Cth) (‘ITAA36’). This means the assessment of any income derived post Principal Beneficiary’s death will depend on whether there is any present entitlement to the trust income.

By way of an example, if an SDT was established under a Will, and the donor has nominated the funds back to his or her estate upon the death of the Principal Beneficiary, it could be that the estate account is reopened, and the funds are distributed as part of the estate. As no beneficiary can be presently entitled to income of an estate until it has been fully administered – i.e the residual amount can be ascertained after all debts, expenses, and liabilities are satisfied⁹, the trustee is likely to be assessed either under section 99 or 99A of the ITAA36 depending on whether the Commissioner is of the opinion that it would be unreasonable that section 99A should apply¹⁰.

Once the residual beneficiaries acquire a vested interest in the remaining trust assets and income, the relevant beneficiary or the trustee, in case of residual beneficiaries who are non resident or under a legal disability, will be taxed on their respective share of the trust income at their individual marginal tax rate¹¹.

Alternatively, if the donor has directed the funds in the SDT directly to named beneficiaries as opposed to the estate, the interests of such beneficiaries should become ‘vested’ upon Principal Beneficiary’s death and the trustee of the SDT should hold the funds on trust for those beneficiaries until the distributions are made and the trust is wound up. In this scenario, any trust income derived post vesting should be made presently entitled to the residual beneficiaries together with the trust fund in the proportions as nominated by the donor and the beneficiaries will be taxed on their respective share of the trust income at their individual marginal tax rates.

What does this mean for you?

What this means is that the uncertainties surrounding  SDTs can be and should be managed and addressed right from the beginning at the planning stage so that there are no adverse tax consequences arising at the end.

As with any other trusts, the terms of the trust deed are paramount and, careful consideration should be given in nominating the residual/specified beneficiaries upon the end of the trust, and if an SDT is established under a Will, the terms of the Will should be in line with the terms of the SDT and ultimately your objectives.

How we can help

The Wills, Estate Planning and Structuring team at Moores is one of the largest in Australia with expertise in trusts and taxation. We can provide strategic advice tailored to your specific circumstances and work with you and your advisors through complex structuring, succession planning and tax issues in relation to special disability trusts from planning stage through to administration of same upon vesting.

Contact us

If you have any general queries regarding a Special Disability Trust, please do not hesitate to contact us.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to your organisation.}

1. Section 1209M of the Social Security Act (Cth). ↩︎
2. Section 95AB of the Income Tax Assessment Act 1936 (Cth) (‘ITAA36’). ↩︎
3. Section 98 of ITAA36. ↩︎
4. Whitby v Von Luedecke [1906] 1 Ch 783. ↩︎
5. Re Legh’s Settlement Trusts; Public Trustee v Legh [1938] Ch 39). ↩︎
6. Pearks v Moseley (1880) 5 App Cas 714. ↩︎
7. Clay & Ors v James & Ors [2001] WASC 18. ↩︎
8. Saunders v Vautier [1841] EWHC J82. ↩︎
9. Section 101A of ITAA36; FCT v Whiting (1943) 68 CLR 199; 7 ATD 179; and Taxation Ruling IT 2622 ↩︎
10. Section 99A of ITAA36. ↩︎
11. Sections 97,98 of ITAA36. ↩︎

A binding death benefit nomination (BDBN) is a written instruction given by a member of a superannuation fund, directing the trustee to pay the member’s superannuation benefits to one or more of their ‘dependants’ and/or legal personal representative after their death.

Provided that the BDBN complies with the relevant fund’s requirements and is valid at the time of the member’s death, the trustee must comply with the direction in the nomination and pay the death benefit in accordance with that direction. Each super fund, including self managed super funds (SMSFs) will have their own requirements for making a valid BDBN, but generally, a nomination must:

• Clearly outline the recipients of the death benefit and the proportion or amount of benefit to be paid to them;
• Be signed by the member;
• In many cases, witnessed by two independent witnesses; and
• Provided to, or accepted by, the trustee of the fund.

Let’s look at why you might choose to have a BDBN and the issues that could arise if you do.

Reasons for completing a BDBN

There are a number of reasons for why you may have, or be advised to have, a BDBN in place. For example:

• A BDBN puts you in control and provides you with certainty that your superannuation death benefits will be distributed in the way you have outlined in the nomination. It prevents the trustee (who, in the case of externally managed funds, may be one or more individuals representing the trustee who have no connection to you) from exercising discretion over the payment of your benefits, which may otherwise not align with your intentions.
  
  You may require certainty because:
  
  
  • You have a challenge risk to your estate and want to avoid death benefits being paid to your estate to be distributed in accordance with your Will. Note that under current law in Victoria, superannuation is not an asset able to be challenged unless it forms part of your estate, but this is not the case in all Australian jurisdictions;
    
    
  • Alternatively, you want to direct your superannuation to your estate because:
    
    
    • Your Will includes provisions and structures which are intended to provide your beneficiaries with increased asset protection and permitted tax concessions (eg, testamentary trusts or a superannuation death benefits testamentary trust); or
    • Your priority is to restrict access to capital for certain beneficiaries which would not be possible if they received the benefits outright, even if this may not be the most tax effective way of distributing the death benefits; or
    • You have vulnerable beneficiaries or young children who you wish to benefit on death, and want to avoid such beneficiaries obtaining control of the death benefits via the trustee exercising its discretion to pay death benefits directly to them;
      
      
• A valid BDBN may speed up the death benefit payment process. Where there is no BDBN in place, trustees of superannuation funds will generally need to investigate and gather additional information to enable them to consider and determine the recipient of the benefits. This can result in payments being delayed and held up for months or years after the death of the member; and
  
  
• The circumstances in which a BDBN can be challenged are generally limited to the validity of the document, eg, a challenge based on the decision-making ability of the member to make the BDBN, or the formalities of the document. A valid BDBN cannot be challenged just because an aggrieved or disgruntled beneficiary believes it to be unfair or unreasonable.

Drawbacks of a BDBN

Whilst a BDBN provides you with certainty and allows you to direct how your superannuation entitlements are to be dealt with on death without the trustee involved in the decision, a BDBN can potentially have the following drawbacks:

• A BDBN should never be completed in isolation to addressing your overall estate planning, and without understanding the tax implications of directing death benefits to a particular person or in a particular manner. For most people, superannuation is likely to be only one part of their assets or structure and a BDBN may be inconsistent with other documents or planning strategies which may be advised by a lawyer;

• In many circumstances, there is a loss of flexibility as the trustee cannot consider the beneficiaries, circumstances or laws at the time of your death.  As death may be some time after the completion of a BDBN, it is advisable to regularly review your nomination, and, if appropriate, update or renew the nomination, notwithstanding that it would not otherwise expire;

• The BDBN may expire after a period of time, or upon the occurrence of a specified event, without your knowledge.  It is important to familiarise yourself with the rules of the fund and the occasions where a binding nomination may become ineffective or invalid. For example, the deed for the fund may specify that a BDBN:
  • Lapses after 3 years, even if in the case of SMSFs, BDBNs can be non-lapsing; or
  • Ceases on the occurrence of certain life events such as marriage, separation or divorce, or where the person nominated in the BDBN has predeceased the member;

• When you commence a pension, you may nominate a reversionary beneficiary to receive the balance of your pension on your death as part of the terms of the pension.  As such, when you die, there may be two documents in place – a reversionary nomination and a BDBN. The governing rules of the fund may specify that for benefits in pension phase, a reversionary nomination takes precedence over a BDBN.  In this case, the BDBN will be ineffective for the benefits subject to the reversionary nomination but may still remain valid for any benefits continued to be held in the accumulation phase. Problems can potentially arise if a deed is silent on which document or nomination prevails.

A discussion on death benefit payment strategy should always be considered as part of an estate plan and never in isolation. Whilst the overwhelming benefit of a BDBN is certainty and control, it is important to regularly review your BDBN to ensure that it aligns with your current wishes and objectives.

How we can help

For advice or guidance regarding Estate Planning and Family Law including BDBN, please do not hesitate to contact us.

Contact us

If you have any general queries regarding a BDBN, please do not hesitate to contact us.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to your organisation.}

Taxation Ruling TR 2013/2 (TR 2013/2) sets out the Commissioner’s interpretation of the law in relation to tax-deductible school building funds. The Australian Taxation Office published an updated ruling in October 2024 to reflect the more holistic approach taken by the Federal Court in the case of The Buddhist Society of Western Australia Inc v Commissioner of Taxation (No 2) [2021] FCA 1363 (the Buddhist Society Case). The updated ruling significantly broadens the categories of organisations that may be eligible for endorsement as school building funds.

Prior to October 2024, TR 2013/2 stated that:

• a ‘school’ was an organisation that provided regular, ongoing and systematic instruction in a course of non-recreational education; and
• the following factors ‘indicate’ that an organisation is providing instruction as a school: a set curriculum; suitably qualified persons providing instruction; enrolment of students; some form of assessment and correction; and creation of a recognised qualification or status.

In practice, many institutions providing ‘education’ were unable to satisfy these criteria.¹

In the Buddhist Society Case, the Court found that the factors expressed in the original version of TR 2013/2 did not reflect the ordinary meaning of the term ‘school’. In particular, TR 2013/2 inappropriately elevated factors referred to in case law to the level of “prerequisites or inherent requirements” for school building funds. The Court took the view that a more holistic approach was required.

The ATO released a Decision Impact Statement on 18 May 2023 advising that it would review and update 2013/2 to reflect the Buddhist Society Case. The ATO subsequently updated TR 2013/2 on 4 October 2024. The key changes are discussed below.

A broader definition of school

The updated TR 2013/2 now explicitly incorporates the broader judicial definition of a ‘school’ adopted in the Buddhist Society Case, being ‘a place where people, whether young, adolescent or adult, assemble for the purpose of being instructed in some area of knowledge or of activity.²

Importantly:

• Indicative factors for a school are now explicitly ‘not required’
  While the updated TR 2013/2 still lists factors that ‘can help demonstrate there is a school’, it now explicitly states that these factors ‘are not required’.³ Formal examination or testing, or the granting of formal awards of certificates of completion, is no longer required.
• A recreational course of instruction can be a school
  The original TR 2013/2 provided that ‘school’ did not include training in a mere hobby or recreational pursuit. The updated TR 2013/2 now states that ‘Schools are not limited to those focused on academic pursuits and includes (but is not limited to) recreational, technical, arts and agricultural schools’.⁴

A purpose based approach to when a building is ‘used as a school’

The Buddhist Society Case also provided crucial guidance on how to assess whether a building is ‘used as a school’. A building will be ‘used as a school’ where it is used to provide instruction (or its use is incidental to the provision of instruction – such as a kitchen or bathroom facilities) and the extent and character of that use is such that the building can be described as ‘used as a school’.

The original TR 2013/2 stated that for a building to be a school building, its school use must be ‘substantial’. It focused on whether non-school use is of such kind, frequency or relative magnitude as to preclude the conclusion that the building has the character of a school building. The factors considered were primarily quantifiable, including the time, physical area, number of people and degree of modification dedicated to school versus non-school use.

In the Buddhist Society Case, the Court rejected this quantitative approach and found that the proposition that school use must be ‘substantial’ was not explicitly reflected in the case law. Instead, the Court stated that regard must be had to the following factors. These are now explicitly included in the updated TR 2013/2 as factors that must be weighed to determine whether a building has the character of a school building:

• the overall purpose(s) for which the building has been established and maintained;
• the importance of each of the activities carried out to that purpose;
• any connection that the non-school activities may have to the school activities carried out; and
• the extent to which school and non-school activities contribute to the furtherance of that purpose.

This enables a more holistic assessment to be made about whether a building can be a ‘school building’. Quantifiable factors such as physical area and time may be indicative but are no longer determinative.

Greater access to tax deductibility

The updated TR 2013/2 has replaced the ATO’s restrictive approach to what constitutes a ‘school’ and ‘school use’ with a broader, more flexible approach. This may enable more organisations that provide ‘instruction in an area of knowledge or activity’ to seek tax-deductible gift recipient endorsement for the operation of a school building fund. In particular, organisations that provide less traditional forms of education (for example, that do not include assessment or correction or provide a recognised qualification or status) such as religious instruction (e.g. Sunday schools or Buddhist meditation schools) or recreational instruction (e.g. dance schools, cookery schools, riding schools or woodwork schools) may now be eligible for endorsement. This may unlock funding opportunities and fast track community fundraising initiatives for capital projects.

How can Moores support you?

Our Charity and Not-for-profit team can assist you in understanding the changes to the ATO’s position and assessing your eligibility for endorsement as the operator of a tax-deductible school building fund. We can support you to apply for endorsement and help you understand the rules and requirements for operating a school building fund, enabling the acquisition, construction, or maintenance of school buildings through tax-deductible donations.

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

1. TR 2013/2 superseded Tax Ruling 96/8 and had introduced a number of these indicative factors. Though the previous tax ruing had provided as follows: “The term “school” would usually connote a place where instruction is given by qualified persons in accordance with a set curriculum and there is some form of student assessment and correction.” (paragraph 46). ↩︎
2. McKerracher J, citing with approval the statement of Barwick CJ in Cromer Golf Club Ltd v Downs (1973) 47 ALJR 219 (The Buddhist Society Case at [94]) ↩︎
3. TR 2013/2, paragraph 12B ↩︎
4. ↩︎

Nine years ago, a Victorian court case significantly diminished the rights of injured people to argue that a bad waiver should be struck out. In the Bounce case, the court upheld one of these waivers for the first time.

This historic case has left its mark on the Victorian recreational services landscape. As a result of Rakich v Bounce, consumers can no longer be reasonably confident that they will be recompensed if injured. Schools can no longer adopt the presumption that a broadly worded waiver is unlikely to be valid.

Despite this, we still see documents from camp and excursion providers seek to include unacceptable waivers, often on the basis of “our insurer says we have to include this”.

Needless to say, schools should take pause before bundling waivers into the excursion documentation.

Heading outside the school gates

Snowboarding. Horse-riding. Rock climbing. Hiking.

Immersive experiences such as outdoor, wildlife and adventure excursions, help create rich educational experiences for students and are thought to deepen the benefits of in-class education.¹ These activities are often classed as ‘high-risk recreational activities’ and are facilitated by third parties with specialist expertise, equipment and licenses. Arrangements with these providers will often involve a liability waiver, sometimes as a condition of student participation.

Knowing these cannot be signed by the school on behalf of students,² schools will often pass these on for signature by a parent or carer.

However, while waivers have become a mundane part of the consumer experience, they are not toothless. Additionally, the education context brings further matters to consider – some of them quite complex.

Common ‘red flags’

While, the non-delegable duty of care prevents schools from ‘pointing the finger’ at a third party provider, even if that provider holds the expertise, a school should not be quick to accept a waiver of liability as it can affect the school’s commercial position.

Although a waiver of liability can appear to be a checkbox measure, there are common ‘red flags’ which indicate an inherent conflict with the function of a waiver and a school’s obligations and activities.

For instance, issues arise when a third party waiver:

• is not with the school (who is the party procuring the services)
• purports to remove rights from a student
• asks a parent/carer/guardian to guarantee or agree to something when they won’t be present to supervise
• seeks to exclude liability for negligence or for failure to exercise due care and skill

or even –

• has permissible liability exclusions which could result in an injured party pursuing a school for costs, instead of the provider.

This last ‘red flag’ has become more prominent in recent years. Historically, waivers have been difficult to enforce because they are frequently too broad and considered largely unenforceable due to public policy. However, in the November 2016 Bounce decision, the Supreme Court of Victoria reversed the historical position on appeal in favour of the provider, and not the injured person.

Rakich v Bounce

Clinton Sean Rakich³ was an adult who attended Bounce Inc, a trampoline centre, with friends at 9pm on a Thursday night. Part-way through the evening, he joined a game of ‘dodgeball’ on a framework of sixteen trampolines separated by padded steel framing. During this game, Mr Rakich landed awkwardly on a padded beam, resulting in a significant tibial injury to his right leg.

As well as claiming that Bounce had failed in its duty of care to provide adequate warning and safety information, Rakich argued that Bounce wasn’t able to rely on their waiver.

Under the Australian Consumer Law (ACL), providers have to guarantee the use of due care and skill and fitness for a particular purpose. However, recreational service providers can be excluded from these guarantees if their terms meet very specific conditions.

Mr Rakich contended that Bounce could not access the exclusion because the terms did not meet the pre-conditions. Specifically, he argued that:

• If the exclusions were to be read as one whole, then they were broader than what was allowed and therefore all exclusions of liability had to be struck out.
• Alternatively, if the exclusions could be read as separate terms, then the specific conditions under the ACL had not been met.

Ultimately, the Court determined in favour of Bounce. It both read down the parts of the waiver that were too extensive to fit within the ACL’s parameters, as well as read the exclusion terms as a whole (recognising the presence of the specific conditions). Mr Rakich’s claim for damages was dismissed.

And whilst the Bounce case does not impact the non-delegable duty of care which schools owe to students, it means that even if a school does everything right by the children in its care, taking all reasonable steps to reduce the risk of reasonably foreseeable harm, it could still be left ‘holding the bag’ for loss and damages in the event of an incident.

For schools which are coordinating excursions involving high-risk activities across classes of diverse ages and abilities, even a brief waiver can now pose a substantial financial risk.

Dissolving the deadlock

We are increasingly seeing contention between third party providers who insist on their standard form waiver as a precondition to engagement, and schools who are unwilling to endorse the documents to parents/guardians.

But whether or not students are able to access enriching activities outside the classroom should not be at the mercy of the waiver.

How we can help

If you have a waiver with red flags on your desktop, the Education Team at Moores has successfully provided schools with pathways for managing the commercial risks and negotiating amendments with third parties. Subscribe to receive updates when we release our Excursion Risks Toolkit, and reach out for support putting proactive resources in place so that your school is on the front foot with a clear position and mechanisms for navigating provider expectations.

Contact us

To mitigate risks to your school whilst preserving and promoting rich educational experiences for students, contact Cecelia Irvine-So for further support and subscribe to receive updates directly in your inbox.

1. Frontiers | Getting Out of the Classroom and Into Nature: A Systematic Review of Nature-Specific Outdoor Learning on School Children’s Learning and Development ↩︎
2. Excursions: Liability, waivers and indemnities | VIC.GOV.AU | Policy and Advisory Library ↩︎
3. Clinton Sean Rakich v Bounce Australia Pty Ltd [2016] VSCA 289 – BarNet Jade ↩︎

This week the Victorian Parliament considered a bill to establish the Victorian Early Childhood Regulatory Authority (VECRA) to carry out the functions of the state regulator conferred by the National Law and other relevant laws.¹

Whilst this bill has yet to pass the lower house (let alone the upper house), the published text of the bill gives us an indication of what the future of the childcare sector could look like under this Regulator.

If made law in its current form, the bill would not only establish VECRA and the role of the Early Childhood Regulator, but would:

• Codify the requirements for the Victorian Early Childhood Worker Register (the Register);
• Provide guardrails for the treatment of and access to information entered into the Register;
• Grant powers to VECRA to share information with the Social Services Regulator;
• Make maintaining the Register a function of VECRA and grant it power to require information for the Register; and
• Creates offences in relation to failing to respond to a notice for information from VECRA.

In addition, it is possible that the power to make Regulations under this bill would (if made law) result in the VECRA being granted further functions to strengthen the integrity of the ECEC sector.

Whilst the establishment of the Early Childhood Workforce Register is already in the process of being established,² this bill is a key step to legislating transparency in the sector.

The debate for the Victorian Early Childhood Regulatory Authority Bill 2025 (Vic) has been deferred to 12 November 2025.

How we can help

Subscribe to Moores for further updates and reach out to the Moores Education and Safeguarding Teams for support assessing and mitigating risks of harm in your early learning centre or childcare.

Contact us

Please contact us for more detailed and tailored help.

1. Victorian Early Childhood Regulatory Authority Bill 2025 | legislation.vic.gov.au ↩︎
2. Early Childhood Workforce Register | vic.gov.au ↩︎

Australia’s pending age-restrictions on social media platforms aim to reduce online harm, but could also trigger isolation, anxiety, and shifts in cyberbullying.

In this article we cover key steps for schools to take ahead of the social media ban, both by utilising the new eSafety resources for educators¹ and around:

• communication practices and student supports;
• wellbeing practice and behaviour management frameworks; and
• digital safety and literacy.

The changes and the role of the school

With the deadline fast approaching, schools across Australia must prepare for the introduction of new age restrictions on social media platforms on 10 December 2025 under the amended Online Safety Act 2021 (Cth).²

The eSafety Commissioner has clarified that the changes represent a lifting of the minimum age of access rather than as a ‘ban’, for the primary purpose of protecting children from harmful online environments.

The ‘ban’ will prevent children under 16 from being able to register accounts with certain platforms (expected to include Facebook, TikTok, Instagram, X (formerly Twitter), Snapchat and YouTube, and potentially Roblox³) in order to restrict access to harmful content and curtail avenues through which they may be bullied. It will not prevent the use of platforms such as YouTube by educators for learning purposes.

This shift is more than a technical adjustment. It signals a broader cultural change in how young people will be able to engage with digital spaces, information and each other.

Not only are schools able play a critical role in supporting students through the transition, the changes may introduce new risks to the school environment which schools will need to account for in their child safety risk management practices.

Why the Social Media changes matter

The Australian Government has framed the measure as a necessary step to safeguard children from harmful online content and mitigate risks associated with excessive social media use.⁴ These risks include:

• Mental health concerns: Anxiety, depression, and body image issues are increasingly linked to social media use. The World Health Organisation estimates that one in seven teens currently experience mental health conditions. Locally, the Australian Institute of Health and Welfare reports that rates of depression and anxiety among 15–34-year-olds have more than doubled since 2009.
• Exposure to harm: According to the eSafety Commissioner’s 2021 report, 44% of young Australians have experienced negative online interactions, with 15% reporting threats or abuse.

However, even though the unregulated use of social media poses significant risks, it can also offer connection and community, particularly for marginalised groups. While a 2024 ANU study found that regular social media use negatively impacted life satisfaction for Year 10 and 11 students, it also noted that non-binary students reported higher satisfaction levels when using platforms like Twitter (now X), highlighting the complexity of the issue.⁵

What Schools should do to prepare for the Social Media Ban

Although the Online Safety Act amendments do not impose new legal obligations on schools, the age restrictions will have practical implications for child safety policies, duty of care, and student wellbeing. Schools should act now to ensure they are ready. Emerging risks must be identified and proactively managed:

• Isolation: Students may experience social disconnection as familiar communication platforms are restricted.
• Mental Health Strain: Increased anxiety or distress may arise during the transition, especially for students who rely on social media for support or identity affirmation.
• Exacerbation of Existing Behaviours: Students already experiencing behavioural or emotional difficulties may see these issues worsen due to disrupted routines and reduced access to online coping mechanisms.
• Cyberbullying Migration: Harmful behaviours may shift to less regulated or harder-to-monitor platforms, including messaging apps, or migrate into in-person interactions. 

1. Review Communication Practices

Ensure that staff are not communicating with students via platforms that may now fall under the social media umbrella (e.g., WhatsApp). Instead, use purpose-built educational platforms that are age-appropriate and secure.

2. Update Policies and Protocols

Child safety and acceptable use policies need to be updated to address new online risks or student needs.

• Child Safety Policies: Reflect the impact of reduced social media access in your child safety documentation. This includes protocols for responding to mental health concerns, online bullying, and mitigating isolation.
• Acceptable Use Policies: Review and update IT restrictions to ensure that any emerging platforms which may pose risks are identified and blocked.

Strategic policy amendments can also assist Schools who face the need to discipline students for out-of-hours conduct which is inconsistent with the Student Code of Conduct and takes place on age-restricted platforms.

4. Support Student Wellbeing

As students lose access to familiar communication channels, schools must provide alternative support systems within the school environment:

• Counselling Services: Prepare for increased demand as students adjust to new norms.
• Workshops and Feedback Channels: Engage students and parents in discussions about the changes. Use these forums to gather insights and refine your approach.
• Peer Support Programs: Help students maintain social connections in healthy, offline ways.
• Data Collection: Monitor student wellbeing to assess the effectiveness of your interventions.
• Resources: Identify and provide connections to resources and services that children may have previously found or accessed via social media.

5. Promote Safe Digital Habits

According to the eSafety Commissioner’s 2021 report, teens want online safety information delivered through trusted channels, including from their school.⁶ Support students to say “not yet” to social media and “yes” to healthy and safe digital habits through proactive education and community engagement. This includes:

• Teaching students how to find trustworthy sources of information.
• Encouraging participation in non-social media communities and activities.
• Continuing to embed digital literacy and online safety into the curriculum.

Looking ahead

While the intent behind the age restrictions is clear, questions remain about their broader impact because lack of consultation with key stakeholders has left some uncertainty.

Will they effectively reduce harm, or inadvertently isolate young people from valuable online spaces?

What is clear, however, is that schools must take reasonable steps under their duty of care to support students through this transition and protect from the reasonably foreseeable harms that may emerge in the school environment. Now is the time to act, before the December deadline arrives.

How we can help

Moores can assist with helping you:

• Ensure you are taking reasonable steps and meeting your child safety obligations with respect to emerging online risks under Ministerial Order 1359.
• Evaluate whether your child safety practices (including the engagement with family and children) meet your obligations under the Minimum Standards for School Registration in light of the changes.
• Provide training to your staff and students on the traps and protective measures available with respect to online harms, image-based abuse, and e-Safety.

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

1. Social media age restrictions hub | eSafety Commissioner ↩︎
2. Online Safety Amendment (Social Media Minimum Age) Act 2024 – Federal Register of Legislation; Online Safety (Age-Restricted Social Media Platforms) Rules 2025 – Federal Register of Legislation ↩︎
3. Roblox wants exemption from social media ban despite evidence of predators targeting children – ABC News ↩︎
4. Albanese Government protecting kids from social media harms | Prime Minister of Australia ↩︎
5. Social media negatively impacting teens’ life satisfaction | Australian National University ↩︎
6. Digital lives of Aussie teens | eSafety Commissioner ↩︎

On 5 September 2025, the Federal Court of Australia delivered its long-awaited decision in FWO v Woolworths Group Limited; FWO v Coles Supermarkets Australia Pty Ltd¹, which provides critical clarification on the operation of set-off clauses in employment contracts. Employers relying on annualised salary arrangements must now ensure that Award entitlements are met within each pay period, not retrospectively or prospectively.

In his judgement, Justice Perram found that the relevant set-off clauses could not be used to discharge obligations under the General Retail Industry Award (the Award) across different pay periods and can only lawfully operate to offset any obligations falling due in one pay period. This decision has significant implications for employers seeking to rely on set-off clauses in employment agreements with annualised salary arrangements to meet their obligations under the relevant award. 

Whilst the Court considered other several issues, of most significance is the Court’s decision on set-off clauses, annualised salaries, and record keeping obligations.

Background

This judgement concerned four separate causes of action, including proceedings brought by the Fair Work Ombudsman and class action suits against Woolworths and Coles. All four causes of action concerned alleged underpayments of employees in store-based management positions, employed under written contracts providing for an annual salary.

The relevant clauses contemplated that the annualised salary would satisfy all obligations under the Award. Employees were paid on a fortnightly basis in accordance with the Award.

Woolworths and Coles had not kept track of these employee’s entitlements under the Award, and therefore, in many cases, the employees did not receive payment for these entitlements. While both Woolworths and Coles had previously made remediation payments to affected employees, the applicants considered these payments were insufficient to discharge the relevant obligations.

The decision

Set-off clauses and annualised salaries

The Federal Court rejected Woolworths and Coles argument that the relevant set-off clauses effectively enabled an employee’s entitlements to be set-off, or ‘pooled’ across different pay periods, finding that the relevant set-off clauses could only lawfully operate within a pay period. 

Section 323(1) of the Fair Work Act 2009 (Cth) (the FW Act) requires that an employer must pay an employee the amounts payable for the performance of work in full. The Court observed that Woolworths had two sets of payment obligations: one being its obligation to pay a fortnightly instalment of the annualised salary under the employment agreement, and the second being its obligation to pay amounts due under the Award.

The Court found that these obligations under the Award – such as overtime, penalty rates, and allowances – must be discharged by actual payments within the same pay period by virtue of section 323(1), rejecting the use of accounting abstractions or pooled overpayments across multiple periods.

In coming to this decision, the Court observed it is unlikely payments that have occurred in the past, or payments in the future, could be characterised as payments for the purposes of the Award, and stated more generally that “If this is to be correct, then a six monthly pooling operation for cl 6 cannot be resurrected by careful drafting”.

Record keeping obligations

Section 535(1) of the FW Act requires that an employer document and maintain certain employee records, in accordance with the Fair Work Regulations 2009 (Cth) (the FW Regulations). For the purpose of these proceedings, the Court focussed on an employer’s obligations as set out in regulations 3.31, 3.33 and 3.34 of the FW Regulations. These regulations require that an employer must maintain records in a form that is readily accessible to an inspector demonstrating, among other things:

1. the details of an employee’s pay, including, the details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance if the employee is so entitled; and
   
2. the details of any overtime worked.

Neither Woolworths nor Coles had kept track of the affected group of employees’ entitlements under the Award.  For example, Woolworths did not keep records of any separately identifiable amounts of loadings or penalty rates, or of the number of overtime hours for the concerned employees. Woolworths and Coles argued that these record keeping obligations were not engaged for employees on annualised salary arrangements, as they were not entitled to additional payment (i.e. for overtime).

The Court rejected this argument, finding that record-keeping obligations under the FW Regulations apply even where employees are paid annualised salaries, and set-off clauses did not relieve either party of these obligations. It follows, that employers must record entitlements such as overtime and penalty rates, even where those entitlements are notionally absorbed into a salary.

The Court further held that Woolworths’ ‘clock-in, clock-out’ system, was not sufficient to discharge its obligation to keep a record specifying overtime hours worked in accordance with regulation 3.34. Although the Court acknowledged that information might be deduced from rosters and clocking data, it did not accept that this met the requirement for records to readily accessible and available under the FW Regulations.

The Court went on to apply section 557(C) of the FW Act, which reverses the burden of proof in proceedings where an employer has failed to keep the required records. This means Woolworths and Coles were required to disprove allegations of underpayment where records were missing or complete.

Key takeaways

1. ‘Set-off’ clauses, must operate within a set pay period – while an employer can off-set the relevant obligations under an Award, a contractual provision that purports to discharge those obligations across previous or future pay periods is not legally compliant. 
   
2. Employers must maintain comprehensive and accessible records of all entitlements, including for salaried employees.
   
3. A ‘clock-in, clock-out’ system combined with an employee’s rosters, is not sufficient for the purposes of the FW Regulations.
   
4. Where an employer fails to maintain the required records, it will have the burden of disproving any underpayment allegations.

Implications and further class action

The representatives for the applicants in the class action suits against Woolworths and Coles have signalled that similar class action will be taken against the Super Retail Group in the coming weeks. It is alleged that the Super Retail Group, owner of Supercheap Auto, Rebel, BCF, and Macpac, paid retail managers an annualised salary insufficient to meet weekly entitlements, such as overtime, under the Award.

This follows proceedings filed by the Fair Work Ombudsman against the group in 2023 over self-reported underpayments, which were stayed until the judgement in the Woolworths and Coles proceedings were handed down.  Alongside that order, Justice Katzmann ordered that the parties confer within four weeks of the delivery of the Woolworths and Coles judgement, with respect to case management steps.

While a class action suit is yet to be filed, and the outcome of the Fair Work Ombudsman’s proceedings are yet to be seen, proceedings against other employers appear to be likely.

While it is important to note that the decision and potential action against the Super Retail Group is in relation to entitlements under the General Retail Industry Award 2010, the decision could have wider implications for employers operating similar arrangements under other Awards. Whether that is the case is yet to be seen, but it will be essential for employers to carefully consider whether they are compliant with the relevant award.

Things employers need to do now

1. Assess whether any annualised salary and set-off arrangements are sufficient to meet an employee’s entitlements under the relevant award in each pay period.  Employers should consider any busy periods where it might expect employees to work additional overtime hours. 
   
2. Consider the benefit of moving to a longer pay cycle (i.e. monthly instead of fortnightly pay) as far as is permitted by the relevant Award.
   
3. Review their record-keeping systems to assess whether they are sufficient to satisfy their obligations. We note that just relying on log-in and log-out data that may not be accurate may not be sufficient, and employers may need to consult with staff and see to implement better systems. 
   
4. Consider directing employees not to work more than specified maximum hours or their contracted hours, and seek prior written approval for any additional hours worked.

How we can help

Our Workplace Relations team can review your employment contracts, payroll and record-keeping systems to ensure compliance with the latest Fair Work requirements. We provide practical advice on managing annualised salaries, set-off clauses and Award entitlements, helping organisations reduce risk and avoid costly disputes.

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

1. [2025] FCA 1092 ↩︎

Private ancillary funds (PAFs) are a vehicle for private philanthropy. They allow donors to make tax-deductible contributions, invest those funds and make grants to charities in line with the founder’s philanthropic goals. The federal government’s resurrection of its proposed tax on superannuation balances over $3 million has resulted in increased interest in the role of PAFs in structured giving.

What is a PAF?

A PAF is a type of charitable trust in Australia that allows individuals, families or businesses to make tax-deductible donations, invest those funds and then distribute investment income each year to deductible gift recipients (DGRs). It does not deliver services or undertake its own charitable work – rather, it is a pool of money and/or property that is managed to make distributions to DGRs.

Most donations to a PAF must come from the PAF’s founder (or the founder’s associates or relatives)¹ and PAFs must not solicit donations from the public². These features make PAFs suitable vehicles for private philanthropy. By contrast, a public ancillary fund (PuAF) is public in nature and must regularly invite the public to contribute to the fund.³

The Hon Dr Andrew Leigh MP recently announced proposed reforms in relation to PAFs and PuAFs⁴. This includes a proposal that they be renamed “giving funds” to better reflect their role in supporting charitable giving and two proposed changes in relation to distributions from giving funds (considered below).⁵

Key governance requirements

PAFs are regulated by the Taxation Administration Act 1953 (Cth) (TAA 1953) and Taxation Administration (Private Ancillary Fund) Guidelines 2019 (Cth) (PAF Guidelines). Under these statutes, a PAF must:

• be established and maintained under an instrument of trust (such as a trust deed or will)⁶;
• have a corporate trustee⁷, which must exercise a reasonable degree of care, diligence and skill when managing the PAF⁸;
• distribute at least 5% of the market value of the fund’s net assets (or the higher of 5% or $11,000 if costs are paid out of the PAF) each financial year⁹;
• keep proper accounts in respect of all of the fund’s receipts and payments and all financial dealings connected with the fund¹⁰;
• prepare a financial report showing the fund’s financial position for each financial year¹¹;
• prepare and maintain a current investment strategy for the fund that sets out the investment objectives of the fund and details the investment methods the trustee will adopt to achieve those objectives¹²; and
• not enter into any uncommercial transactions or provide benefits to individuals associated with the fund.¹³

Though PAFs are not required to be registered as charities with the Australian Charities and Not-for-profits Commission (ACNC), most PAFs choose to register as charities so that they can access charity tax concessions (including income tax exemption). PAFs that are registered as charities must comply with the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (in addition to the TAA 1953 and PAF Guidelines), which entails:

• complying with the ACNC Governance Standards;
• lodging an Annual Information Statement (and, depending on charity size, an annual financial report) with the ACNC; and
• notifying the ACNC of key changes to charity details.

Why establish a PAF?

PAFs are designed for people who want to take a structured, long-term approach to philanthropy – rather than making one-off donations – while retaining control over investment decisions and distribution priorities. For those who are seeking to give in this way, there are several compelling reasons to consider establishing a PAF, including the following:

• Tax effectiveness: Contributions to PAFs are fully tax-deductible and PAFs that are registered as charities can be endorsed for income tax exemption.
• Strategic philanthropy: PAFs provide a structured way to give over the long term, ensuring support for DGRs continues year after year.
• Family legacy: PAFs allow families to involve the next generation in structured charitable decision-making, embedding values of generosity and stewardship.
• Flexibility: Donors retain control over investment strategies and distribution priorities, within the regulatory framework referred to above.
• Responding to tax changes: Some high net worth individuals are establishing PAFs as a structured giving vehicle to receive funds as part of a strategy to reduce super balances ahead of the proposed tax on superannuation balances over $3 million taking effect.

How we can help

Our Charity and Not-for-profit Law team assists for-purpose organisations from the ground up, from the establishment process through to compliance and governance matters. Moores can assist you to establish a well-designed PAF that is tailored to your objectives and aligns with your philanthropic goals.

To hear more about the benefits of PAFs as a vehicle for tax-effective giving, you are welcome to join our live webinar on Tuesday 16 September 2025 from 1-2pm. This practical session will explore how PAFs can be used to maximise tax effectiveness while supporting long-term philanthropic goals, with time to put your questions to our legal experts. In this one-hour session, we will cover the complex issues you raise with us, including:

• how to establish and structure a PAF;
• compliance obligations and trustee responsibilities;
• investment strategies within the PAF framework;
• distribution rules and meeting minimum annual requirements; and
• governance best practices and building a lasting legacy.

Further reading

Taxation Administration (Private Ancillary Fund) Guidelines 2019 (Cth)

Giving fund reforms: distribution rate and smoothing

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

---

1. See s 24(2) of the PAF Guidelines. ↩︎
2. See s 24(1) of the PAF Guidelines. ↩︎
3. See s 24(1) of the Taxation Administration (Public Ancillary Fund) Guidelines 2022. ↩︎
4. See Supporting philanthropic giving (5 December 2024) and More to give: new giving fund rules aim to boost charity support (10 June 2025). ↩︎
5. Consultation on these changes took place from 10 June to 1 August 2025. Further information about the consultation, including the consultation paper, is available on the Treasury website. ↩︎
6. See s 9(1) of the PAF Guidelines. ↩︎
7. See s 426-105 of the TAA 1953. ↩︎
8. See s 12(1) of the PAF Guidelines. ↩︎
9. See ss 15(1)-(2) of the PAF Guidelines. The federal government is currently considering increasing the minimum annual distribution rate from 5% and allowing distributions to be averaged over three years. ↩︎
10. See s 17(1) of the PAF Guidelines. ↩︎
11. See s 18(1) of the PAF Guidelines. ↩︎
12. See ss 20(1)-(2) of the PAF Guidelines. ↩︎
13. See s 22 of the PAF Guidelines. ↩︎

Significant changes are underway in the Early Childhood Education and Care sector, with new reforms impacting how organisations operate and keep children safe. Our Safe & Sound series explains these updates in clear, practical terms so providers can understand what’s changing and what they need to do.

In this episode, hosted by Moores Special Counsel Tal Shmerling and featuring Practice Leader Cecelia Irvine-So, we focus on the issue of CCTV cameras in early childhood education and care settings. We break down what’s being proposed by the Federal Education Minister and what it could mean for your organisation.

The goal is simple: to give you the information you need to stay informed, manage risks, and prepare for change.

Contact us

If you would like to discuss how we can support your organisation, our education and safeguarding teams are here to help. Please contact Tal Shmerling or Cecelia Irvine-So if you would like further support. 

View our dedicated page on the Childcare and Early Education Reforms and subscribe to receive updates directly in your inbox.

For many boards¹, the decision to close a not-for-profit (NFP) or charity is not made lightly. Whether the organisation has fulfilled its purpose, become unsustainable, or is merging into another entity, there are important legal and practical steps to take.

Below are some of the key discrete issues to consider when bringing a NFP or charity to an end.

Deregistration, winding up or dissolution?

The detail of the process to close an entity down will depend on its legal structure, which may be an incorporated body (such as a company limited by guarantee or incorporated association) or an unincorporated entity (such as a trust of unincorporated association).

There are two main ways to formally close an incorporated entity: deregistration (sometimes called cancellation of incorporation) or winding up.

• Deregistration is generally cheaper and faster. A deregistered entity may, in some circumstances, be reregistered – something that isn’t possible once an organisation has been wound up. There are often threshold limits that apply to deregistration. For example, in Victoria, an incorporated association is only eligible to deregister if it has assets worth less than $50,000.
• Winding up is a more formal process that involves appointing a liquidator and, in some cases, a court application. It is usually required if the entity has higher-value assets, more complex affairs or is insolvent.

The choice of deregistration or winding up can have significant implications. Boards should seek advice early to determine the most appropriate path.

An unincorporated entity such as a trust or unincorporated association may be dissolved. For a trust this involves a deed of dissolution. For an unincorporated association the process will depend on the governing document.

Whose decision is it to close?

Closing an entity is a major decision. In most cases (save trusts), it is not a decision that can be made by the board alone.

• Companies limited by guarantee – members typically need to pass a special resolution to deregister or wind up.
• Incorporated associations – the requirements vary across each jurisdiction. For example, in Victoria, unanimous member consent is required. In Queensland, a special resolution of the members is required.
• Trusts – the trustee(s) may dissolve the trust by trustee resolution and deed of dissolution. 

Ensuring reporting is up to date

Before a NFP or charity can be closed, it is important to make sure that all reporting obligations are up to date. Regulators such as the Australian Securities and Investments Commission (ASIC), state regulators for incorporated associations or the Australian Charities and Not-for-profits Commission (ACNC) (depending on the structure) will not process an application to deregister or wind up if annual returns, financial reports or other compliance filings are outstanding. Bringing reporting up to date also helps to provide a clear financial picture for members and ensures that assets are properly accounted for before they are distributed.

Employees

Specific advice will be required if your NFP or charity has employees. Generally, employment must be finalised in line with the Fair Work Act 2009 (Cth) and any relevant awards or enterprise agreements. This includes engaging in genuine consultation about a major change, giving the required notice, paying out any outstanding entitlements (including in relation to wages, superannuation, and leave). Subject to the size of your workforce, the length of service of each employee, and whether employees are engaged on a permanent or casual basis, you may also need to provide employees with redundancy pay.

Insurance

Even after an entity has been closed, directors and officers can still face claims relating to decisions made while the NFP or charity was operating. Run-off Directors’ & Officers’ insurance provides ongoing protection for board members and officeholders against those risks. It is worth checking how long the cover should be maintained and whether the existing policy automatically provides run-off cover, or if a separate policy needs to be arranged.

Distribution of surplus assets

A NFP or charity may have surplus assets (after the payment of any debts and liabilities, including – subject to the terms of the grant – the return of unspent grant monies). The NFP or charity will need to identify an appropriate recipient(s) to receive its assets.

Generally, the distribution of assets will be provided for in the winding up clause of the entity’s governing document. The winding up clause usually states who has the power to determine who receives assets – this is often the members or (if the members cannot agree) a Court. Even if member approval is not required, it may be prudent for the board (particularly the board of a charity) to consult with the members as part of its responsibility to be accountable to members.

When identifying an appropriate recipient, the following considerations should be taken into account:

• The winding up clause may:
  • specify eligibility criteria for recipients (for example, that they must be NFP or a charity with a similar purpose); or
  • provide that assets must be distributed to a specific recipient (even if this is the case, the board should confirm that the specific recipient still meets any eligibility criteria, e.g. it is still endorsed as a deductible gift recipient (DGR) if this is an eligibility criterion).

• DGR constraints – generally DGR assets should be kept separate from an entity’s other assets (usually in a gift or public fund). This includes funds or property that have been received by an entity through tax-deductible donations or contributions while it was endorsed as a DGR. These assets must only be distributed to another entity that is endorsed as a DGR with a similar charitable purpose.

• It may be possible to impose constraints on a recipient of a NFP or charity’s assets by negotiation or agreement with the recipient. For example, a recipient entity may agree to use assets for a limited purpose, a particular program or a specific geographic area. This may assist the NFP or charity to ensure the ongoing promotion of its purpose after it ceases to exist.

Documenting the decision

The closure of a NFP or charity must be properly documented. This may include:

• passing resolutions at board level;
• passing resolutions at properly convened meetings of the members; and
• for trusts – executing a deed of dissolution.

It may be appropriate to identify the recipient of the assets in the board resolution and include confirmation that the board is satisfied that any eligibility criteria have been met (e.g. that the purposes are sufficiently similar).

Notifying regulators

Once the decision is made, there are a number of regulators that may need to be notified, including:

• the state regulator or ASIC, depending on the structure;
• the ACNC; or
• the Australian Taxation Office, particularly where the entity has DGR endorsement or tax concessions.

Each regulator has its own forms, processes and timing requirements.

How we can help

Closing a NFP or charity involves more than simply shutting the doors. The rules are complex – and differ between states, structures, and tax statuses. From member approvals through to the distribution of assets and regulator notifications, each step requires careful attention – Moores can assist your organisation to complete all steps in the closure process in a compliant manner.

Contact us

Please contact us for more detailed and tailored help.

Subscribe to our email updates and receive our articles directly in your inbox.

---

_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

1. The term “board” is used interchangeably to refer to various types of governing bodies, including committees and trustee(s). ↩︎