The process of returning to campus is well underway, albeit with rules around physical distancing and restrictions around normal school activities. As schools return, many will hope that things will ‘return to normal’. However, your school community is likely to have experienced significant challenges due to COVID-19 and will continue to experience these challenges in the future, meaning that a ‘return to normal’ is not realistic in the near-future.
In this article, we provide some pointers for how schools can provide assistance to their communities to support them through this difficult time.
COVID-19 has had a disastrous financial impact on many families, with large scale job losses. As a result, many families will be struggling to pay school fees. We know our clients are offering an array of options for parents, including:
- Fee deferral – where parents defer payment of the outstanding fees to a later date;
- Fee discounts – the school provides a discount to parents for fees;
- Payment schedule – an agreement between the school and parents is reached for payment in instalments of outstanding fees ;
- Bursary or scholarship – students experiencing hardship apply for a scholarship or assistance with school-related expenses.
Whilst considered measures such as these are important to the ongoing sustainability of many schools, schools also need to consider what happens next.
For all of these fee arrangements, we recommend you state the following information in any documentation:
- How long the arrangement lasts, with a specified end date
- The consequences of breaching the arrangement i.e. termination of enrolment?
- Type of relief – is it a discount or a deferral?
- Does it apply to all children in the family, or just some?
- Does the relief apply to only fees, or relate to equipment such as laptops, textbooks or other education expenses?
Using the School’s Tax Deductible Scholarship Fund
Many schools have explored using their tax deductible scholarship fund to provide bursaries and scholarships to families in need.
The Australian Tax Office recently released the following update in relation to scholarship funds:
Correct use of scholarship funds
- DGR-endorsed scholarship funds can only be used to award scholarships for reasons of merit or equity and must be open to individuals within a region of at least 200,000 people.
- You cannot use a scholarship fund to provide fee relief to families who are unable to pay their school fees, even if only for a limited period.
- Scholarships can only be awarded in a way that is consistent with tax law and the governing document of your fund.
In our view, the underlined phrase is poorly worded and insufficiently nuanced. This update must be read in the context of the more comprehensive ATO guidance here, which provides (amongst other things) that “reasons of equity” covers students who are experiencing socio-economic disadvantage or hardship. There is no rationale for treating hardship arising from COVID-19 related economic stress any differently from other hardship that may be experienced by families. There is nothing in the comprehensive ATO guidance to prevent the award of scholarships to current students, provided those students meet the reasons of equity or merit requirement.
Subject to careful consideration of the terms of your particular scholarship fund’s governing document, a scholarship fund may be able to be used to provide scholarships or bursaries to current or prospective families who are unable or would be unable to pay school fees, provided that:
- the scholarship or bursary is genuinely open to both current and prospective students; and
- appropriate criteria are established to ensure any scholarship or bursary is genuinely awarded on the basis of merit.
Nevertheless, in light of the ATO guidance, schools should take great care in the preparation of all communications in relation to fundraising, advertising the availability of scholarships, setting equity criteria and recording the basis for the awarding of scholarships. Moores can assist with this if required.
Other tax deductible fundraising
It remains possible for schools to use other tax deductible vehicles (such as a necessitous circumstances fund) to fundraise specifically to meet the needs of current students. Some schools have also established public benevolent institutions that can carry out projects (such as supporting communities overseas or operating a soup van) consistent with the school’s values as well as assist individuals (including school families) in need. Please let us know if you would like to discuss these options further.
The period of isolation at home may have caused significant disruption to the academic, family and social lives of students and teachers. A global study conducted by SAP, Qualtrics, and Mind Share Partners, found that the pandemic is impacting mental health around the world. Over 40% of people said their mental health has declined since the COVID-19 outbreak. In that same time period, the number of people who describe the state of their mental health as a 3 or less on a 10-point scale has doubled.
There are many ways schools can take action to support the wellbeing of members of the school community:
- Show you care – actions speak louder than words.
- Provide open access to school counsellors to all, e.g. arranging Zoom sessions with counsellors for parents
- Normalise the conversation around mental health – ask the simple question “are you okay?”
- Create clarity and routine – a school can’t control the uncertainty teachers and students feel, but can give them consistency.
- Conduct regular check-ins with staff and students on mental health.
- Over-communicate – ensure that the school community is hearing from you often and more than usual.
You may want to provide food to families who have suffered financial hardship. If you are giving food, be careful of the VRQA prohibition on use of school funds for a non-school purpose. Under the VRQA Minimum Standards, a school must not use school funds for a gift which is unconnected to the conduct of the school. The best way to approach food donations would be to accept donations of food which can be distributed to families in need. As noted above, public benevolent institution can receive tax deductible donations to support projects of this kind.
If the school canteen is selling food to others, including families, ensure your food registration enables you to – many restrict provision to school families.
How we can help
Moores is able to assist you with implementing some of the measures described in this article to support your school community through this unprecedented time. For more information or guidance, please do not hesitate to contact us.