The Associations Incorporation and Other Legislation Amendment Regulation 2023 (Amendment Regulation) was made on 23 June 2023, which completes the implementation of the reforms of the Associations Incorporation and Other Legislation Amendment Act 2020 (Amendment Act).
The Amendment Regulation prescribes:
- the default grievance procedure that incorporated associations must observe, under section 47A of the Associations Incorporation Act 1981 (Associations Incorporation Act) from 1 July 2024 (unless they have a compliant alternative procedure in their rules), and
- the details of remuneration that incorporated associations must disclose to their annual general meeting pursuant to section 70D of the Associations Incorporation Act, if the meeting is held after 1 July 2024.
Associations need only change their rules if they wish to observe an alternative grievance procedure to the one prescribed.
Reporting requirements
The Amendment Regulation also removes the existing prescriptive lists of financial records that must be retained by incorporated associations, to allow such matters to be determined by associations in accordance with the requirement of section 59A of the Associations Incorporations Act 1981 (AI Act). Section 59 of the AI Act has since 22 June 2022 contained a principles-based requirement for associations to keep adequate records. Some prescriptive record-keeping requirements of the Collections Regulation were removed by a previous regulation made last year. The Collections Act 1966 and accompanying regulation regulate charitable giving and community fundraising in Queensland, including setting the processes for fundraising authorisations, entity registration and record-keeping and audit requirements.
Additionally, the Amendment Regulation increases the financial (revenue and audit) thresholds that define the size of incorporated associations, and consequently define the financial reporting requirements for associations. From 1 July 2023, the new thresholds will require:
- external review by a registered company auditor, accountant holding the prescribed qualifications, or person approved by the chief executive if annual revenue exceeds $150,000, or current assets exceed $300,000; and
- audit by a registered company auditor, accountant holding the prescribed qualifications, or person approved by the chief executive when annual revenue exceeds $500,000, or current assets exceed $1 million.
Taxation concessions
To assist incorporated associations with obtaining taxation concessions, the Amendment Regulation amends the model rules (effective 1 July 2024) at Schedule 4 of the Associations Incorporation Regulation 1999 to:
- provide a process for the transfer or distribution of assets on the winding-up of an association that has been endorsed as a deductible gift recipient, to meet the requirements of the Australian Taxation Office in this regard; and
- expressly provide in the rules that no part of an association’s income or property is to be distributed, paid or transferred by way of a bonus, dividend or other similar payment to the association’s members, to address the requirement of section 149C(5) of the Taxation Administration Act 2001 (Qld) for associations that seek registration under that Act as a charitable institution in Queensland.
- The amendments will have no effect on associations that adopt the model rules but are not eligible for or do not intend to seek tax concessions.
Collections Regulation 2008
The Amendment Regulation also amends the Collections Regulation 2008 (Collections Regulation) to prescribe tiered reporting thresholds in place of the existing mandatory audit requirement.
The thresholds apply to revenue only and match those prescribed in the Associations Incorporation Regulation 1999. From 1 July 2023, the new Collections reporting thresholds will require:
- external review by a registered company auditor, accountant holding the prescribed qualifications, or person approved by the chief executive if annual revenue exceeds $150,000; and
- audit by a registered company auditor, accountant holding the prescribed qualifications, or person approved by the chief executive when annual revenue exceeds $500,000.
Entities registered with the Australian Charities and Not-for-profits Commission (ACNC) will remain generally exempt from these reporting obligations, and need only prepare reports as required by the ACNC. ACNC-registered incorporated associations who are part of an ACNC group reporting arrangement, or whose financial information is withheld from publication by the ACNC, will continue to have Queensland Government reporting obligations under the Associations Incorporation Act.
Consolidation versions
The details relating the grievance procedure, disclosure of remuneration and eligibility for tax concessions will not appear in consolidated version of the Associations Incorporation Regulation 1999 until their commencement on 1 July 2024.
Prescribed thresholds and reporting requirements under the Associations Incorporation Regulation 1999 and the Collections Regulation 2008 will appear in the consolidated version from 1 July 2023.
The Queensland Law Society provided a submission on the Associations Incorporation and Other Legislation Amendment Bill 2019, which can be found here, and the consultation papers on the proposed regulations, which can be found here.
For more information, please refer to the following on the Queensland Legislation website:
Associations Incorporation and Other Legislation Amendment Regulation 2023
The Office of Fair Trading has also published information for incorporated associations about these changes.
This article was prepared by Wendy Devine, QLS Principal Policy Solicitor, and Jaime Gunning, Law Clerk.
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