The information contained in this article is current as at 30 March 2020. To view information on the latest coronavirus updates, please visit our COVID-19 Updates, Webinars and Resources page or alternatively contact us on (03) 9560 2922 for further information on any recent changes.

The Coronavirus Pandemic (COVID-19) has caused a significant increase in stress and anxiety for many charities and NFPs operating in many areas and sectors across our community. Charities may be seeking to respond to the crisis by helping those in need while being under significant stress and anxiety themselves.

Both the Federal and Victorian governments, as well as the national charity regulator, the ACNC, have announced a number of support measures aimed at helping charities and NFPs stay afloat and ease compliance regulation so they can get on with the job of supporting people at need in our community.

In this article, we provide answers to some of the most common questions we are receiving in relation to these issues and pointers to the government support available to charities and NFPs.

Cash flow boost for charities – PAYG credit

Eligible Charities, including those established from 12 March 2020, with a turnover of less than $50 million in the prior year will be able to access tax-free cash flow support in the form of a credit for Pay As You Go Withholding, spread over its activity statements from March 2020 to September 2020.

Charities that are not required to withhold will receive a minimum of $20,000 over this period.

The cash flow support measures will be provided in the form of a credit in the activity statement system. The credits will be automatically calculated by the ATO and employers will only need to lodge an activity statement to trigger the entitlement.

Organisations that lodge activity statements on a quarterly basis will be eligible to receive credits in the first phase for the quarters ending March 2020 and June 2020. Credits in the second phase will be available for the quarters ending June 2020 and September 2020. The minimum $10,000 payment will be applied to the first lodgement.

Organisations that lodge on a monthly basis will be eligible for the credits in the first phase for the March 2020, April 2020, May 2020 and June 2020 lodgements. Credits in the second phase will be available for the June 2020, July 2020, August 2020 and September 2020 lodgements. The minimum $10,000 payment will be applied to the first lodgement.

For more information see here – COVID 19 – Economic Response for NFPs

Support for charities providing emergency food relief

The federal government has announced (on 29th March 2020) an additional $200 million will be provided to support charities and other community organisations which provide emergency and food relief as demand surges as a result of coronavirus. Given the unprecedented nature of the situation, emergency relief services are being heavily relied upon and this demand will increase.

The Community Support Package will provide flexible funding to boost support to services where demand is quickly increasing, including:

Emergency Relief which will help vulnerable Australians who need assistance with bills, food, clothing or petrol and increase and retain workforce capacity including volunteers.
Assistance for food relief organisations to source additional food and transport for emergency relief service providers, and rebuild workforce capacity.
Immediately scale-up services through the National Debt Helpline — which is often the first point of contact for people experiencing financial difficulties, and to support one-on-one tele-financial counselling.
Creating a short-form Financial Counselling course through Financial Counselling Australia to train new financial counsellors to boost the workforce, potentially providing hundreds of new jobs.
Expanding access to safe, affordable financial products through the No Interest Loan Scheme which provides an immediate financial relief alternative to other high-risk, high-interest products such as credit cards and payday loans.

For more information on the $1.1 billion package which boosts mental health services, domestic violence support, Medicare assistance for people at home and emergency food relief, see here

Solvency safety net

A safety net has been put in place to protect companies in temporary financial distress as a result of the pandemic by lessening the threat of actions that could unnecessarily push them into insolvency and force their winding up. These include:

a temporary 6-month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000;
the time a company has to respond to statutory demands will increase from 21 days to 6 months, and
for 6 months, directors will be provided with temporary relief from personal liability for trading while insolvent.

Debts incurred will still be payable by the organisation. Only those debts incurred in the ordinary course of its activity will be subject to the safety net measures.

Victorian government support for Charities

Rent Relief

Certain tenants in government buildings will be able to apply for rent relief. Private landlords will be encouraged to do the same where possible.

Business Support Fund

A $500million Business Support Fund will be established to support hardest hit industries, including hospitality, tourism, accommodation, arts and entertainment and retail, including charities operating in such industries
Businesses (including charities) can apply if they:

— Employ staff

— Have been subject to closure or is highly impacted by shutdown restrictions announced by the Victorian Government to-date.

— Have a turnover of more than $75,000

— Have payroll of less than $650,000

— Hold an Australian Business Number (ABN) and have held that ABN at 16 March 2020 (date of the State of Emergency declaration)

— Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16 March 2020.

Eligible businesses can apply for a one-off $10,000 grant which can be used towards costs such as utilities, rent and salaries, and activities to support business continuity planning.
See here to register for the Business Support Fund

ACNC - Annual Information Statement Extension

All annual information statements due between 12 March 2020 and 30 August 2020 have received a blanket extension until 31 August 2020. At the time of writing due dates showing on the ACNC register had not been updated, but this is expected to be done shortly.

For all ACNC COVID-19 measures see – Charity operations and COVID-19

Virtual General Meetings

Many organisations will be asking whether they can hold their Annual General Meeting remotely, via Zoom or other video or tele-conferencing technology.

Start by reading your Constitution carefully to determine whether it allows the use of technology for general meetings.

Yes? Go ahead. Provide your members with all of the information they need to remotely join, participate and vote in the meeting. If your rules have been based on the model rules for Victorian Incorporated Associations, or the ACNC companies limited by guarantee template the use of technology will be permitted, although quorum requirements must still be met.
No? Notify your members of your intention to postpone the meeting. The ACNC has announced that if you delay or postpone your AGM because you cannot conduct it safely, the ACNC will not take action against a charity unless there is evidence of wider non-compliance.
Unclear? You may need to seek legal advice.

For more information see the ACNCs – Charity meetings and AGMs

How can Sharrock Pitman Legal assist?

If you have any further queries, please do not hesitate to contact Dan Saunders on (03) 8561 3325 or fill in the contact form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

Dan Saunders

For further information contact

Dan Saunders

Dan is an Associate Lawyer at Sharrock Pitman Legal.

He deals with areas of Charities & Not-for-Profit Law and Commercial Law. For further information, contact Dan on his direct line (03) 8561 3325.

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However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

COVID-19: Update for Charities and Not-for-profits

Cash flow boost for charities – PAYG credit

Support for charities providing emergency food relief

Solvency safety net