Background

The Government announced in the 2021-22 Mid-Year Fiscal and Economic Outlook (https://archive.budget.gov.au/2021-22/myefo/download/myefo-2021-22.pdf ) that it will establish a deductible gift recipient (DGR) category to enable funds to access DGR status where the fund supports pastoral care by chaplains and analogous wellbeing services delivered to students in Australian primary and secondary

The Government currently provides significant support to pastoral care services in schools through the National School Chaplaincy Program (NSCP). The proposed new DGR category will complement this support by encouraging greater private philanthropy to meet increasing demands for these

Many schools operate school building funds and deductible donations for chaplains will be able to channel through a similar arrangement, funds solely for pastoral care purposes.

The measure is costed at $13M in its first year and $15M in the second year.

The Treasury has released a consultation paper for discussion (https://treasury.gov.au/consultation/c2022-252330), which will add another category to the over 200 types of organisations mentioned in the taxation legislation.

The pastoral care fund will be operated by a charity registered with the ACNC or an Australian government agency such as a State school.

The fund must be established and maintained solely to support the activity of delivering pastoral care services to Australian primary and secondary school students. This includes students in pre-school and approved curriculum-based learning institutions, and excludes formal childcare, after school care, tertiary institutions and Sunday

Given that some staff exercising pastoral care also are involved in teaching, a practical means of separating out the funding of only pastoral care duties is yet to be clarified.

The intent is that the DGR category is targeted to support pastoral care services delivered to students in the school environment, and it is not yet clear whether care can be delivered in off-premises activities such as outdoor education activities.

The provision of pastoral care must be delivered by an appropriately qualified worker whose predominant purpose and function is to provide pastoral care to students in a school environment. The ATO will probably refer to the current minimum qualification requirements under the NSCP is either a Certificate IV in Youth Work, a Certificate IV in Pastoral Care, a Certificate IV in Chaplaincy and Pastoral Care, or an equivalent

While the new type of fund will be welcomed by many who seek to raise funds for school chaplains, it remains to be seen what the actual legislation will be and how the ATO will interpret those measures. It is only to be hoped that the fine distinctions present in school building funds can be avoided where the ATO will approve an indoor swimming pool as a building but not an outdoor pool for the purposes of a donation to a school building fund.

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