Private and Public Ancillary Funds: Incentivising increased support for charities in response to COVID-19

The Federal Government has announced measures to encourage both Private Ancillary Funds (PAFs) and Public Ancillary Funds (PuAF’s) to increase their minimum grants.

Charitable giving is expected to decrease over the months ahead, at a time when demand for charitable services is increasing in response to COVID-19. On Wednesday, 6 May 2020 the Federal Government announced measures to encourage both Private Ancillary Funds (PAFs) and Public Ancillary Funds (PuAF’s) increase their minimum grants for the 2019-20 and 2020-21 financial years. An amendment will made to the ministerial guidelines for public and private ancillary funds to provide a credit for funds that make total distributions in 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions. The credit will be equal to half the percentage points by which the distributions exceed the minimum. This may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until the credit is exhausted.

Examples

The Federal Government also declared the COVID-19 pandemic across Australia a disaster for the purpose of establishing Australian disaster relief funds as Deductible Gift Recipients (DGRs), allowing these funds to receive tax deductible donations. Donations to Australian disaster relief funds, established to provide relief from the COVID-19 pandemic, will be tax deductible when made within two years of the day specified in the declaration as the first day of the event.

How ShineWing Australia can assist

The team at ShineWing Australia is experienced in the governance and compliance of ancillary funds including fulfilling the role of the responsible person. We can help with your philanthropic goals to make an impact.

Contacts

Matthew Oakey E moakey@sw-au.com

Daniel Minihan E dminihan@sw-au.com

Heather Dyke E hdyke@sw-au.com

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