Charities Act 2013 (Cth)

Year: 
2013
Jurisdiction: 
Commonwealth
Issues (subject): 
PBC
Tax

The Charities Act 2013 (Cth) which sets out for the first time a single statutory definition of a charity and charitable purpose. In conjunction with the Tax Amendment Acts these changes have important implications for native title and indigenous groups. Specifically, the Act expands upon the common law test of ‘charitable purpose’ and exceptions to the ‘public benefit’ requirement to overcome previous uncertainty and difficulties over whether trusts established for the administration of payments and benefits for a native title group could obtain charitable status.

Key changes include:

  1. a ‘public benefit’ exception for entities which receive, hold or manage benefits that relate to native title or Indigenous land rights, where the purpose of the the entity is directed to the benefit of indigenous individuals and the public benefit requirement cannot be met because of the relationships between the indigenous individuals (see section 9)
  2. the expansion of purposes presumed to be for the public benefit from four categories to twelve, including: the promotion and advancement of health, education, social or public welfare, religion, culture, the natural environment, reconciliation, mutual respect and tolerance between groups in Australia, human rights, the security or safety of Australians, the  prevention and relief of suffering to animals and any other benefifical purpose (see section 12).

Under the common law, a charity for the benefit of a group of persons related by family or blood would not fulfil the ‘public benefit’ requirement for charitable status. This requirement created particular uncertainty for Prescribed Bodies Corporate (PBC’s) and Registered Native Title Bodies Corporate (RNTBCs) which hold native title on behalf of an Indigenous group commonly defined in a determination with reference to a common apical ancestor.

The exclusion of the ‘public benefit’ requirement under section 9 of the Act means that PBCs and other entities will be able to administer benefits relating to native title or Indigenous land rights as a charitable trust for a more limited group of related Indigenous individuals than was previously possible. Additionally, these benefits can now be administered for a wider array of purposes considered to be charitable under the expanded definition of ‘charitable purpose’ in section 12.

For further information, see the Explanatory Memorandum and Second Reading Speech.