Recent distressing events in the childcare sector have drawn renewed attention to the importance of robust child safety practices. It is appropriate in this context for board members of all organisations that care for and educate children to reflect on their role in creating and maintaining safe environments.
At the end of this article, we have provided a checklist for boards to consider as they review their child safe practices.
Regulatory changes have been proposed at the state and federal level (including bringing forward existing proposed reforms in relation to creating a Victorian register of childcare workers and banning personal devices in childcare centres by Friday 26 September 2025). Additionally, the Victorian government has announced a review of childcare safety. Prudent boards will ensure that their organisations do not wait until regulatory changes are imposed and reviews are finalised (although they must monitor and respond to developments in this space). Instead, organisations must act now to anticipate foreseeable risks, mitigate those risks and promote a culture of safety and continuous improvement. In this, the board has a vital role to play.
Media reporting has been critical of the childcare centres which operate for profit. This might be false comfort for not-for-profit operators. Child safety risks exist across all types of early years providers and not just in long day care. Boards of occasional care, sessional kindergartens and school-based ELCs also need to act. It is worth emphasising that the law is not more lenient towards boards of not-for-profits – the duties and penalties are substantially the same. Board members of not-for-profit centres will not be treated with kid gloves just because they are unpaid volunteers.
Child safety isn’t just an operational concern: it is a governance issue that directly impacts an organisation’s ability to deliver on its purpose. Board members have a duty to act with care and diligence and in the best interests of the organisation1. Complying with these duties necessarily extends to ensuring child safety. Acting in the best interests of the organisation means prioritising the wellbeing of the people it serves, especially children and protecting the organisation itself from legal and reputational harm. Exercising care and diligence requires ongoing attention to whether systems, practices and culture are effective in keeping children safe.
In the years following the Royal Commission into Institutional Responses to Child Sexual Abuse, child safety laws have evolved to emphasise accountability. One important development has been the introduction of a reverse onus of proof (including in Victoria) in certain circumstances. This means that, if harm occurs, an organisation will be presumed to have breached its duty to prevent the abuse of a child unless it can show that it took reasonable precautions to prevent it.
In Moores’ view, it is a clear breach of board members’ duties to fail to ensure that an organisation takes these reasonable precautions. In the extreme case, this failure will not only be a breach of board members’ duties, but will expose directors to criminal prosecution – under ‘failure to protect’ laws across Australia it is a criminal offence for a board member in certain child facing organisations (including childcare centres) to negligently fail to act if they know that a person associated with the organisation poses a substantial risk to a child.
For boards, this reinforces the importance of having systems in place to comply with the National Child Safe Standards and to satisfy themselves that those systems are active, effective and regularly reviewed. The role of the board is to oversee these elements and satisfy itself that they are working as intended. Board members on school boards have additional specific obligations under Ministerial Order 1359 to ensure a range of child safety measures, and must have “line of sight” over all of operational measures. Boards in all organisations caring for and educating children cannot simply adopt policies without confirming they are implemented. Nor can they rely on assumptions, verbal reports or no known history of incidents. Further, boards must ensure that there are open and accessible reporting pathways as well as a culture that promotes accountability and supports speaking up.
In light of recent developments, boards should review their organisation’s current child safety arrangements. The following checklist provides questions that board members can use to guide discussion and decision-making:
1. Reaffirm the board’s commitment
2. Check capability and knowledge
3. Request evidence of implementation
4. Ensure integration with broader governance
5. Ensure risk management frameworks are robust
6. Support transparency and responsiveness
Boards do not need to have all the answers. But they do need to ask the right questions, set clear expectations, and be prepared to adapt where needed.
At a time when public confidence in safeguarding practices is under renewed scrutiny, organisations that show thoughtful leadership and a genuine commitment to improvement will be better placed to maintain trust and deliver their mission with integrity.
Ultimately, ensuring a safe environment for children is not just a matter of compliance, it is central to good governance, and to the values that many charities hold at their core.
At Moores, our Safeguarding and Child Safety teams work alongside organisations to ensure their child safety frameworks are robust, compliant, and reflective of best practice. Our experienced team supports clients to:
We also provide tailored training for staff, boards, and child safety officers to ensure all individuals understand their role in protecting children.
Please contact us if you would like further information on how we can assist.
View our dedicated page on the Childcare and Early Education Reforms and subscribe to receive updates 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.
When a member of a superannuation fund passes away, a member’s benefit (referred to as a “death benefit”) must be cashed out “as soon as practicable after the member dies”. So how long is too long to wait before paying out a member’s death benefit post death?
This question is particularly important for self managed superannuation fund (“SMSF”) trustees who are tasked with paying out the “death benefit” of the deceased member (being the deceased’s executors, usually individuals related to the deceased, rather than unrelated trustees as is the case in retail or industry funds).
What does “as soon as practicable” mean? This wording is not defined in superannuation or taxation legislation which can make it difficult for trustees to fully understand their obligations.
Despite this, the Australian Taxation Office (ATO) had previously provided guidance to trustees about the recommended timeframe. It had been of the view that “as soon as practicable” meant that the trustee had six months from the date of the member’s death, to pay out the death benefit out of the fund.
Particularly for SMSFs, the trustees are usually grieving family members. During the initial six months post death, they are already dealing with other mentally and emotionally taxing tasks arising from the death of their loved one, so the expectation that they are to also organise cashing out the member’s death benefit and paying it out to beneficiaries, in practice can be a somewhat unrealistic expectation.
The ATO has recently removed reference to their six month timeframe definition via their website, providing some relieve to the grieving trustees. But this does not mean that a trustee can take as long as they wish. The trustee still has the obligation to pay out the death benefit “as soon as practicable” under the Superannuation Industry (Supervision) Regulation 6.21(1). It is also yet to be determined whether the removal of this reference was intentional, or an omission by error by the ATO.
SMSF auditors review trustee actions in respect to administering the SMSF. Distribution of death benefits must occur, but during the administration period (post death of the member and before the distribution of death benefit), where the deceased member was in pension phase, the fund can continue to claim “exempt current pension income” (ECPI) where essentially, any income generated from the fund attributed to the pension-phase account, would not be taxed.
While this could be an incentive to trustees to take their time paying out the death benefit, an auditor will likely expect an explanation for delay in order to comply with their own obligations, even though the six-month guideline no longer appears on the ATO website.
Superannuation fund trustees are under an obligation to act honestly in all matters concerning the fund. For example, delaying payment of a death benefit to claim ECPI or waiting for the market to pick up before selling fund assets (e.g. property or shares), may be considered taking advantage of an extended time frame, and in turn possibly contravening the trustee’s obligations.
If you foresee an extended period of time (over 6-12 months) before the death benefit would be paid out of the fund, it is a good practice to document in writing the reason for delay which can assist the auditor with understanding the circumstances preventing the trustee from meeting their obligations.
Our experienced lawyers in the Moores Deceased Estates team can provide guidance to SMSF trustees by assisting with navigating pay out of death benefits, and meeting their obligations upon the death of an SMSF member.
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As Australia’s workplace laws grow in complexity, so too do the compliance obligations of corporate boards in Australia. Once viewed as a function of human resources or middle management, employment compliance now sits squarely within the remit of directors. Modern regulators expect active governance, and courts are increasingly willing to impose personal liability on directors who have failed to implement or oversee adequate systems to protect employees. The consequence is that, in the event of an employment compliance failure, directors may face not only reputational and organisational consequences but also personal liability.
Against this backdrop, Boards must ask themselves a critical question: Are we discharging our duties in a manner that sufficiently mitigates employment-related risks, both for the organisation and for individual directors?
Ordinarily directors are not personally liable for actions they take on behalf of the company they serve. This is often referred to as the ‘corporate veil’. However, the corporate veil may be lifted and personal liability can arise in specific circumstances, including breaches of employment law. Under instruments such as the Fair Work Act 2009 (Cth), Sex Discrimination Act 1984 (Cth) (SD Act), state anti-discrimination laws and various WHS regulations, directors may be held personally accountable where they are deemed to have been involved in or failed to prevent contraventions.
This exposure is not theoretical. Regulators are increasingly pursuing individuals where governance failures are apparent—particularly where issues have become systemic or have resulted in harm. The threshold for liability is not limited to intentional misconduct; it can also encompass acts of recklessness, omission, or wilful blindness.
Health, safety and wellbeing risks
Emerging areas such as psychosocial hazards—encompassing stress, harassment, burnout, and toxic workplace culture—are now part of the legal landscape. SafeWork Australia’s national model WHS laws now explicitly incorporate these risks, and boards are expected to demonstrate these risks are being actively identified, assessed, and controlled. Failing to do so can expose both the organisation and its directors to liability. Individual directors can be exposed to significant penalties (fines of up to $600,000 per breach), and up to five years imprisonment for indictable offences.
While some duties can be assigned or delegated, directors should be receiving regular reports and information on psychosocial hazards and steps being taken to eliminate or control them.
Underpayments and the “involvement” principle
Wage and superannuation underpayments remain an area of intense regulatory focus. The reputational and financial damage associated with non-compliance is significant, and the Fair Work Ombudsman has shown a readiness to investigate directors personally under the involvement provisions of the Fair Work Act 2009 (Cth) (FW Act).
Under section 550 of the FW Act, a director may be liable if they are found to have:
Liability is not confined to deliberate non-compliance. A director who is aware of underpayment risks and fails to take reasonable steps to mitigate the risk and rectify them, and may be deemed to be “knowingly concerned” in the underpayment. In more egregious circumstances, their conduct may qualify as a serious contravention, which attracts even harsher penalties.
Sexual Harassment and the Positive Duty to Prevent Harm
The legal framework governing workplace conduct has shifted decisively with the introduction of the positive duty under the Sex Discrimination Act 1984 (Cth). This duty requires organisations to take proactive and reasonable measures to eliminate, as far as possible, unlawful conduct such as sexual harassment, sex-based discrimination, and hostile work environments.
This is not a matter of form over substance. Regulators expect genuine cultural leadership from the top. It is insufficient for boards to rely on policies or post-incident remediation. Instead, they must ensure that the organisation fosters a culture in which inappropriate conduct is both clearly prohibited and actively deterred.
For boards, this involves oversight of:
A workplace free from harassment isn’t just a legal requirement; it’s a driver of performance, morale, and reputation. A failure to fulfil this duty not only undermines organisational integrity but may also constitute a legal breach for which directors are ultimately accountable.
Directors are not expected to manage day-to-day operational matters. However, they are responsible for ensuring that systems exist to identify, assess, manage, and report on key risks—including those arising from employment law and workplace conduct. Effective governance is not passive; it demands oversight that is both deliberate and informed.
To discharge this duty, Boards must establish and monitor structured frameworks that provide clear, reliable, and timely information on compliance performance and organisational culture. Crucially, they must critically assess this information and consider whether it reflects reality on the ground.
Key areas of focus should include:
1. Workplace Grievances and Whistleblower Activity
The handling of complaints and disclosures is a litmus test for workplace integrity. Directors must ensure that grievance and whistleblower processes are accessible, trusted, and comply with applicable legislative frameworks—including whistleblower protections under the Corporations Act 2001 (Cth).
Key questions:
2. Internal Audits and External Investigations
Employment-related audits—whether relating to wage compliance, discrimination, or WHS obligations—must be more than procedural. They are an opportunity for boards to test the robustness of internal controls and identify systemic weaknesses.
3. Psychosocial Safety and Employee Engagement
Psychosocial risks, including mental health, workload stress, and toxic workplace behaviour, are increasingly recognised as compliance obligations—not just cultural considerations. Boards need to evaluate how these risks are being addressed both operationally and strategically.
4. Remuneration Practices and Payroll Compliance
Given the prevalence of underpayment issues in Australian workplaces, remuneration compliance must be treated as a core legal and reputational risk. Boards cannot rely solely on assurances from management or external advisors.
5. Leadership Accountability and Cultural Expectations
Culture begins at the top—and so does accountability. Boards must lead by example and ensure there are systems in place to set expectations for behaviour, monitor leadership performance, and enforce consequences where necessary.
6. Resourcing and Risk Mitigation Capacity
Effective compliance is resource-dependent. Directors must satisfy themselves that the organisation has sufficient capability to meet its legal obligations and to detect and respond to breaches in a timely manner.
Directors must not assume that delegating responsibility to management absolves them of liability. Courts and regulators are increasingly prepared to scrutinise not only the existence of systems, but also the extent to which directors have confirmed that they are properly implemented and effective.
This is not micromanagement—it is governance in action.
There are times when oversight must give way to direct involvement. Greater board oversight or direct engagement by the board may be necessary when:
Our specialist Workplace Relations and For Purpose / Not for Profit legal teams are well placed to advise boards on governance strategies and obligations in respect of employment and occupational health and safety obligations. Our teams can provide valuable expertise to guide boards through complex employment matters and disputes.
Trigger warning: This article contains references to alleged child sexual abuse that may be distressing to some readers.
The Victorian childcare sector and broader community are reeling following deeply distressing allegations against childcare worker Joshua Brown, who has been charged with 70 offences related to the sexual abuse of young children. The alleged victims range in age from just five months to two years old. Equally confronting is the fact that Brown worked at approximately 20 childcare centres over an eight-year period—while holding a valid Working With Children Check (WWCC). For many parents, this represents their greatest fear realised.
In the aftermath of these revelations, families, educators, employers and policymakers alike are grappling with urgent questions: How could this happen? What safeguards failed? And most importantly—what must change to ensure children are truly safe?
In response, the Victorian Government has announced swift and significant reforms. Premier Jacinta Allan and Government Services Minister Natalie Hutchins outlined a series of actions aimed at bolstering child safety in early learning environments, including:
Additionally, reforms to strengthen the WWCC system are underway. While these measures are welcomed, they also highlight the limitations of relying solely on screening mechanisms. As those working in child safety know too well, WWWC checks—while critical—cannot identify individuals who have not previously come into contact with the justice system or who may have hidden harmful behaviours.
In jurisdictions such as Victoria and New South Wales, a ‘reverse onus’ legal standard applies to organisations working with children. If abuse occurs, the organisation must prove it took all reasonable steps to prevent it. This legal framework underlines the need for childcare providers to act proactively and comprehensively—not only to meet their legal obligations, but to uphold the trust families place in them every day.
With a national review of safety standards likely to take months, early years providers must ask themselves: What can we do right now to better protect children in our care?
These recommendations are designed not only for childcare providers, but for any organisation engaging with children, including schools, sport and recreation providers, disability service providers, religious institutions, and sporting organisations.
1. Review and Refresh Your Child Safety Policy, Procedure and Code of Conduct
Your organisation’s Child Safety Policy and Code of Conduct must be current, comprehensive, practical and easy to understand. The Code should clearly outline acceptable and unacceptable behaviours and explicitly address online conduct and the use of social media. Policies should define clear responsibilities across all levels—from board to frontline staff—and procedures should include actionable steps for reporting and responding to concerns.
2. Actively Communicate Your Commitment to Child Safety
Policies and procedures alone are not enough. A strong culture of child safety requires regular, visible communication from leadership. Reinforce your zero-tolerance approach to abuse through staff meetings, induction programs, and ongoing engagement. Make sure your messaging is inclusive and tailored to reflect the needs of children with disabilities and diverse backgrounds.
3. Deliver Targeted, Effective Child Safety Training
All staff, board members and volunteers must understand their obligations and how to respond to child safety concerns. While compliance-focused training may tick boxes, best practice involves scenario-based, contextualised learning that empowers staff to respond confidently and appropriately. Regular refresher training ensures that awareness remains high. Early Learning Centres (ELCs) in schools, Ministerial Order 1359 requires tailored annual training and information on specific child safety topics for staff, volunteers and board members.
4. Strengthen Recruitment and Screening Processes
Effective safeguarding begins at recruitment. While WWCCs are vital, they are not foolproof. Ensure all candidates undergo thorough interviews, reference checks, and screening that assesses their values and attitudes towards child safety. For Early Learning Centres (ELCs) in schools, Ministerial Order 1359 requires ongoing evaluation of staff suitability—a best practice all providers should adopt.
5. Conduct a Risk Assessment of Your Environment
Identify potential vulnerabilities in your physical and operational environment. Are there ignorance zones in your facility? Are staff properly onboarded? Do staffing levels support adequate supervision, particularly during break times? Proactively identifying and mitigating risks is a cornerstone of a strong safeguarding approach.
6. Engage Your Board in Child Safety Oversight
Boards have a non-delegable duty to ensure effective child safety systems are in place. This requires more than rubber-stamping policies—it demands active oversight, regular reporting, and a clear flow of information from operational leaders. Board members should receive specialised training and ensure that child safety remains a standing agenda item.
The events unfolding in Victoria are a tragic and urgent reminder of what is at stake. As leaders in the education and care sector, our responsibility is not only to comply with the law, but to continuously challenge and improve the systems that protect our most vulnerable. Real child safety requires more than policy—it demands vigilance, leadership, and a relentless commitment to doing better.
If you would like to discuss how we can support your organisation, our team is here to help. Please contact Skye Rose or Tal Shmerling if you would like further support.
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.
Is your not-for-profit (NFP) contemplating a merger? This is part five of a five-part article series that will offer some practical guidance to your board or merger advisory committee. Subscribe to receive the remaining articles in the series.
In an NFP merger, due diligence assists boards to determine whether or not to proceed and to identify issues that may need to be prioritised and addressed as soon as practicable following any merger. More information on the due diligence process can be found in part four of our article series.
A key consideration in the due diligence process is the potential risk associated with historical liabilities.
It is important for the Board to ensure that:
In most cases, the chosen merger type will involve some sort of transfer of assets and liabilities to a recipient entity (the acquiring NFP or the new merged NFP). After the merger, the NFP that has transferred its assets and liabilities will then often be deregistered. Generally, the only liabilities transferred as part of this process will be those that the acquiring NFP or new merged NFP has expressly agreed to assume. This usually means that liabilities that are unknown or are not expressly transferred will stay with the deregistered entity.
Two potential exceptions to this general principle are clawback and historical child abuse liability.
Deregistration under the Corporation Act 2001 (Cth) is only appropriate if an entity has no outstanding liabilities.1 If a deregistered entity is found to have outstanding liabilities, an aggrieved person (including a creditor2) may make an application to the court for re-instatement of registration of the entity, typically on the basis that it is “just” to do so from the time of deregistration.3 This is the case irrespective of whether the outstanding liability was known at the time of deregistration.
After reinstatement of registration, the formerly deregistered entity may be placed in liquidation. This means that insolvent or “uncommercial transactions” of the formerly deregistered entity (which may include a transfer of assets in a merger) could be voidable.4 Remedies can include an order for assets held by the acquiring NFP or a new merged NFP to be transferred back to the formerly deregistered entity. Depending on the circumstances, the period within which transactions can be voided (looking backwards from the winding up of the entity5) can be six months, two years or even longer.
The implication for the acquiring NFP or newly merged NFP is that assets received in a merger may be able to be “clawed back” by an aggrieved person if the transferring entity is liquidated and the asset transfer is characterised as an “uncommercial transaction”.
In relation to liabilities that relate to historical child abuse, an acquiring NFP or a new merged NFP may be held directly liable for a claim against a deregistered entity (if the transferring entity was previously incorporated) or a dissolved unincorporated entity in some circumstances as legislation has been passed in all jurisdictions to ensure that claims relating to child abuse are no longer statute barred. The position differs in each jurisdiction in Australia and is summarised below:
If a potential historical child abuse liability is identified, it may be prudent to seek legal advice specific to the relevant jurisdiction, the merger parties and the merger type so that any risk to the acquiring NFP or any new merged NFP (and the directors) can be properly assessed. This will help inform the board’s decision making process including:
Moores Charity and Not-for-profit team can help if your organisation is contemplating a merger. We can also provide advice tailored to your circumstances (including the relevant jurisdiction, the nature of the liability and your proposed merger process) if possible historical liabilities are identified during the due diligence phase.
Please contact us for more detailed and tailored help.
You’ve sold your property. Can you access the deposit before settlement?It’s a common question with important implications.
Section 27 of the Sale of Land Act governs the early release of deposits in Victorian real estate transactions. The provision allows vendors to provide specified information to purchasers, who then have 28 days to indicate whether they are satisfied with the particulars provided. If the purchaser is satisfied or if a valid objection is not raised within the 28 day period, the deposit may be released before settlement.
The expectation of many vendors is that they will have access to the deposit sooner rather than later after signing a contract to sell their property. However, the early release of the deposit is not guaranteed. In particular, the law does not explicitly address whether the purchaser’s objection must be objectively reasonable or merely subjective. Recent case law suggests that the purchaser’s objection need not be objectively reasonable and that it is sufficient if the purchaser objects. If that happens, a vendor may have limited options to overcome the objection.
If you are a vendor and you need the deposit to be released perhaps to fund the deposit on a purchase, do not assume that you will be successful in having the deposit released quickly or at all. You may have to wait until settlement occurs to have access to the deposit so it would be prudent to have a Plan B.
Our Residential Property team are accredited specialists in property and leasing law, with the expertise and experience to handle even the most complex issues comprehensively and pragmatically.
The Aged Care Act 2024 (Cth) (Act) will commence on 1 November 2025, heralding a new era for aged care in Australia and adopting a rights-based focus recommended by the Royal Commission into Aged Care Quality and Safety (Royal Commission). This legislative overhaul aims to enhance transparency, accountability, and the overall quality and safety of care by empowering older people and those who advocate for them.
A key element of the new Act is strengthened whistleblower protections. These protections aim to create an environment where residents, families, staff, and others feel secure in raising concerns about potential breaches of the law. This is seen as crucial for driving accountability and improving care standards by ensuring issues are brought to light safely and addressed effectively.
This article examines the key whistleblower obligations for registered aged care providers under the Act, compares them with the existing Corporations Act 2001 (Cth) (Corporations Act) regime, and outlines essential steps for providers.
A qualifying disclosure arises when an individual (discloser) has reasonable grounds to suspect that information indicates a potential contravention of any provision of the Act by any entity. The disclosure, which can be anonymous, must be made to an eligible recipient. These include:
Disclosers receive significant protections, including immunity from civil, criminal, or administrative liability for making the disclosure, as well as protection against contractual remedies (like termination) being enforced because of the disclosure. This immunity does not cover the discloser’s own misconduct.
Strict confidentiality rules apply: Recipients must take reasonable steps to preserve anonymity if requested. Revealing the discloser’s identity or information likely to lead to it is a contravention unless specifically authorised (authorised disclosure may include disclosure to regulators or legal advisors, disclosure with consent, or disclosure to prevent serious threat). Disclosure of information (other than identity) is permitted if reasonably necessary for investigating the contravention, provided steps are taken to reduce identification risk.
Victimisation is prohibited: Causing detriment (e.g., dismissal, discrimination, harassment) or threatening detriment due to a disclosure attracts a significant civil penalty (500 penalty units or $165,000). Courts can issue remedies including injunctions, compensation, reinstatement and exemplary damages.
Registered provider obligations: Providers must ensure (as far as reasonably practicable) compliance with confidentiality and anti-victimisation rules for staff making disclosures. They must also take reasonable steps regarding staff who receive disclosures. Critically, providers must implement and maintain a compliant whistleblower system and policy as a condition of registration.
The Act creates a sector-specific regime. While sharing the fundamental aims of the Corporations Act’s whistleblower protections, there are key differences relevant to aged care providers:
The focus on contraventions of the Act, the tailored list of eligible recipients within the aged care ecosystem, and the explicit linking of a whistleblower policy to the conditions of registration for aged care providers are significant points of difference.
Given the mandatory nature of these requirements, providers should act now to prepare for the 1 July 2025 commencement:
Given the overlapping concepts between the Aged Care Act and Corporations Act regimes and the likelihood that many organisations will be covered by both, there is a real risk that confusion between the two regimes could result in a loss of protection for a whistleblower or cause organisations to inadvertently fail to comply with their obligations.
Accordingly, it is essential to ensure that:
The whistleblower protections under the Act are more than just a compliance exercise; they are fundamental to the legislative and Royal Commission’s intent of creating a safer, more transparent, and rights-focused aged care sector. By embedding these requirements into organisational culture and practice, providers can not only meet their regulatory obligations but can ensure that issues are brought to light and addressed safely, effectively and promptly.
Moores Charity and not-for-profit team can assist with a review of your whistleblower policies and processes, as well as internal training to ensure stakeholders understand their obligations.
Privacy Awareness Week 2025 is an opportunity to reflect on emerging issues schools are facing with respect to AI use and its integration in the school environment. AI is becoming increasingly relied on in schools and its use for student learning and student assessment is expected to become commonplace.
Generative Artificial Intelligence (the AI in vogue at present) refers to computer- based learning models which include large language or multimodal learning models.
Since the inception of ChatGPT in 2022 there have been several pivots from governments to move to address and in some cases welcome the use of generative AI in different contexts. Schools deploying AI tools to drive efficiency and enhanced learning are already turning their minds to the risks that comes with adopting new technologies. This article explores some of the data privacy and security implications of using generative AI tools. To read about managing the overall risk of AI in schools please refer to our previous article here.
Generative AI is intelligent and has the capacity to learn from the information that is input; it becomes part of the training model, particularly in open-source AI tools. Some of the key risks schools face when using or seeking to deploy AI-powered tools include:
There is no argument that the AI landscape is changing rapidly and as more developments occur, the accessibility and ease of its use will only grow.
Whist AI can assist schools streamline their administrative processes and support student learning outcomes, when considering generative AI tools, schools must deploy and use these technologies consistent with existing privacy laws.
Developing an AI framework can also assist to set ground rules for how schools approach implementation of AI-powered applications. The framework should ensure visible of what AI is being used or intended to be used, the intended purpose of use and data that will be fed into the tool, and considering the capabilities of each tool, and the terms and conditions of the service providers. Once this is mapped, schools can then make informed decisions about what safeguards are required to integrate those tools into regular practice and school operations with a level of confidence.
In previous articles we have emphasised the importance of privacy-by-design in combatting systems changes and reducing the risk of data breaches or non-conformance with privacy laws. When considering generative AI, the principles of privacy by design should be applied.
Key recommendations
Our Education team is in demand for up-to-date, informative and practical staff Professional Development on privacy matters including AI. Our team can assist with reviewing and updating these policies to ensure your organisation continues to mitigate privacy and data security risks posed by new technologies. We can also provide tailored advice and support on your commercial arrangements with technology service providers and data privacy impact assessments.
I want to thank you for participating in our seminar. We are extremely appreciative of your significant contribution. Overall, the feedback received from the seminar has been excellent and we are pleased with the outcome. Thanks very much for your presentation this morning. Directors commented very favourably afterwards and your advice was very useful also. Great discussion, as well. Will see you at the next breakfast session. Thanks so much Cecelia, the presentation and discussion today was fantastic.
I want to thank you for participating in our seminar. We are extremely appreciative of your significant contribution. Overall, the feedback received from the seminar has been excellent and we are pleased with the outcome.
Thanks very much for your presentation this morning. Directors commented very favourably afterwards and your advice was very useful also. Great discussion, as well. Will see you at the next breakfast session.
Thanks so much Cecelia, the presentation and discussion today was fantastic.
Learn more about our Professional Development sessions.
Recently, Victorian Education Minister Ben Carroll announced new powers for Victorian State School Principals to commence in Term 3 2025.
The powers will empower Principals to suspend students for “behaviour outside of school or online that puts fellow students or staff at serious risk”. Additionally, the powers are aimed at better equipping Principals to respond to assaults and bullying online, including the use of AI and deepfake images.
The question for independent and Catholic schools is not “should we have this power?” but rather “don’t we have this power already?”.
The answer is yes, you probably do, subject to a few important caveats.
Schools have a duty of care to students and staff. This includes the responsibility to take reasonable measures to protect from reasonably foreseeable risks of injury. This includes physical injury (students being subjected to physical violence from other students) and psychological injury (often as a result of bullying).
The increased recognition of the duty of employers to reasonably remove psychosocial hazards also underscores that schools need to be equipped to act on bullying and harassment online. See also our article on psychosocial hazards in schools.
If non-government schools want to be able to act on image-based abuse and online bullying, there are some important steps schools need to be able to take. These include:
1. Ensure your enrolment contract actually allows you to discipline students for out-of-hours behaviour;
2. Look at the student code of conduct. Is it specific enough to be able to point to the type of behaviour you want to sanction?
3. Review your acceptable use policies, specifically considering what powers you have to look at, or seize, student devices. Consider your greater legal powers over school-issued devices such as laptops versus personal devices;
4. Review the behaviour management procedure to ensure it meets the requirements in the Minimum Standards which relate to suspensions and expulsions. Critically analyse whether you are locked into a restorative process that could prevent you from taking action swiftly; and
5. Ensure you have a School Safety Order Policy and Trespass Notice Policy to be equipped to take other steps which may be reasonably required.
Moores Education and Training Team provides expert and responsive advice to many Independent and Catholic schools, as well as education systems, peak bodies, early years managers and incorporated ministries. If you’d like to discuss your school’s needs in relation to student discipline, please contact us.
There has been a lot of press and discussion about the implications of the decision in Commissioner of Taxation v Bendel [2025] FCAFC 15 (Bendel case), which relates to the application of Division 7A to unpaid present entitlements. That case, detailed below, is currently operating in favour of the taxpayer but is subject to an application for special leave to the High Court.
While Bendel case considered issues around unpaid present entitlements and loans from companies to trusts, the outcome of the decision could have a ripple effect into other anti-avoidance provisions, including section 100A, which if applied, could result in a worse outcome for the taxpayer.
The Bendel case concerned with Division 7A of the ITAA36 and the decision in Bendel case has proved to be one of the more significant developments to Division 7A in modern times, particularly in the context of private family groups and businesses.
In a nutshell, the Full Federal Court of Australia in this case rejected the Commissioner’s long held view provided in Taxation Determination TD 2022/11: Income tax: Division 7A: when will an unpaid present entitlement or amount held on sub-trust become the provision of ‘financial accommodation that an unpaid present entitlement (UPE) owing from a trust to a corporate beneficiary of the trust is a form of financial accommodation or ‘loan’ for the purposes of Division 7A.
In practical terms, this means taxpayers are no longer required to put in place Division 7A complying loans for any UPEs outstanding to a corporate beneficiary at the end of financial year to protect themselves against potentially un-frankable deemed divided assessments under Division 7A. This also means that taxpayers could re-consider the historical treatment of such UPEs, either under existing Division 7A loan arrangements or past deemed dividend assessments based on now ‘incorrect’ Commissioner’s view.
While the Bendel case was decided in favour of the taxpayer (pending the Commissioner’s special leave to appeal to the High Court and possible law change), we do not think it is all good news for the taxpayers as it could lead way for more frequent application of a relatively more challenging anti-avoidance provision that is section 100A as discussed further below.
Pending the outcome of the special leave application with the High Court filed by the Commissioner, the ATO has said in its interim decision impact statement (IDIS) that, until the appeal process is finalised, the existing position will continue to apply – i.e broadly, UPEs to corporate beneficiaries are a form of financial accommodation which trigger Division 7A deemed divided unless a complying loan is put in place under prescribed terms, even though the current law says otherwise.
Notably, in the same IDIS, ‘section 100A’ appears five times – two more than ‘Division 7A’ which appears three times, while the Bendel case did not consider section 100A at all. This should highlight the fact that the taxpayers will need to consider the likely implications of section 100A as part of their decision-making process in addressing loans and UPE’s under the position in Bendel case.
Section 100A of Income Tax Assessment Act 1936 (ITAA36) generally applies where a beneficiary is presently entitled to a share of the income of a trust estate and the present entitlement of the beneficiary to that share “arose out of or by reason of any act, transaction or circumstance that occurred in connection with, or as a result of a reimbursement agreement”.
A “reimbursement agreement” is defined in section 100A(7) to mean an agreement that provides for the payment of money or the transfer of property to, or provision of services or other benefits for, a person or persons other than the beneficiary or the beneficiary and another person or persons. Section 100A(13) provides the definition of ‘agreement’ in broad terms to include any agreement, arrangement or understanding, whether formal or informal, but exclude ordinary family or commercial dealings.
Any income of a trust estate that is subject to section 100A is taxed in the hands of the trustee of the trust at the highest marginal rate, and if a beneficiary has been assessed on a relevant share of the net income of a trust and section 100A operates, that the beneficiary is treated as to never have been presently entitled to the relevant trust income.
Section 100A has been on the Commissioner’s radar for the past few years and was considered in the recent cases of Commissioner of Taxation v Guardian AIT Pty Ltd ATF Australian Investment Trust [2023] FCAFC 3 and B&F Investments Pty Ltd ATF Illuka Park Trust & Anor v FC of T 2023 ATC.
The main reason why section 100A may apply to UPEs owing to corporate beneficiaries in the absence of a complying Division 7A loan stems from the PCG 2022/2 – Section 100A reimbursement agreements – ATO compliance approach, where the Commission took the ‘green zone’ position (ATO will not dedicate compliance resources to consider the application of section 100A) of section 100A to UPEs to corporate beneficiaries on the basis of such UPEs being Division 7A loans as per the position taken in TD 2022/11, which is now rejected in Bendel case.
Accordingly, in the IDIS, the Commissioner noted if a trustee retains funds that a corporate beneficiary has been made entitled to without converting that entitlement to a loan at least as commercial as the terms set out in Division 7A, the arrangement would fall outside the green zone described in PCG 2022/2 and section 100A may be applied.
So what does it all mean and how might this play out in practice?
As Division 7A and section 100A purport to tackle different tax avoidance arrangements, both the operation and implications of each section to the taxpayers are also different.
Firstly, the application of Division 7A is limited to the relevant assessment amendment period (generally 4 years) in the absence of any fraud or evasion while section 100A has unlimited assessment period (due to the operation of subsection 170(10) of ITAA36).
This means, for example, if a taxpayer decides to make certain changes to the Division 7A loan arrangements going back more than five years relying on the Bendel case (i.e no fraud or evasion), the deemed dividend provisions in Division 7A may not apply regardless of the position the Commissioner takes, but the Commissioner may choose to apply section 100A to the relevant distribution in that relevant year instead.
Bearing in mind that UPEs to corporate beneficiaries without Division 7A loans do not automatically trigger the application of section 100A, as a separate set of requirements set out in section 100A must be met for it to apply, if the section applies to the relevant distribution, the trustee of the trust is taxed at the highest marginal rate with no legal recourse to claim the distributions made to the beneficiaries back to the trust.
This could result in the trustee with a significant tax liability with no income to appropriately fund same, and in our opinion, this is a worse outcome from the trust perspective compared to the unrankable deemed divided to the trust from the company.
Following the decision in Bendel case and as the end of financial year draws near, it is open to the taxpayers to not have a Division 7A complying loan agreement for UPEs owing to corporate beneficiaries if their circumstances allow, as that is the current ‘law’ that should apply to UPEs in the context of Division 7A.
Having said the above, there might still be merit in being conservative and keeping the existing arrangements going as per the IDIS, so that you stay on the safe side under both of PCG 2022/2 and TD 2022/11 until we have more clarity from the outcome of the High Court appeal and/or potential law change. However, if your circumstances demand to do without a complying Division 7A loan agreement for future or past UPEs to corporate beneficiaries, you will need to consider the application of section 100A to your particular circumstances as well as Division 7A before proceeding with any such restructure as it is possible that both Division 7A and section 100A applying to the same distribution.
Taxpayers, who are:
should consider if section 100A could apply to their arrangements in light of their own circumstances as the application of section 100A will depend on the facts of each specific case.
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 to make sure that any restructure or arrangement involving trusts and corporate beneficiaries do not inadvertently contravene the anti-avoidance provisions under Division 7A or section 100A of ITAA36.
Please contact us for tailored advice on how you can ensure your school is staying up to date with the relevant guidelines.