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  • Providing relief of necessitous circumstances

    The common method of relieving a person in necessitous circumstances is by giving money or goods directly to the person.

    A necessitous circumstances fund can make distributions such as money or goods to other organisations, as long as those organisations provide care for persons in necessitous circumstances.

    • If a public fund distributes for various purposes, only one of which is the care of persons in necessitous circumstances, it may be a public ancillary fund.

    Not only must a fund be for persons in necessitous circumstances, it must also be for the relief of necessitous circumstances.

    Not all funds directed towards people in necessitous circumstances are for the relief of necessitous circumstances.

    Example

    A fund provides scholarships for students to attend a particular school. Preference is given to meritorious students who are in necessitous circumstances.

    While persons in necessitous circumstances may benefit from the fund, the fund is not dedicated to providing relief of necessitous circumstances.

    End of example

    Where a fund is maintained primarily to relieve one individual, family or similar group, its governing documents must make it clear that the fund is to relieve their particular necessitous circumstances. They must not just state that the fund is held on trust for the named individual or individuals.

    Example

    A fund is set up to raise money for two families whose homes were badly damaged in a bushfire. The rules of the fund state that the money will go to 'food, clothing and emergency shelter'. It is clear that the fund is to relieve necessitous circumstances and not just for the personal benefit of the families.

    End of example

    Normally, a necessitous circumstances fund will use an application form to obtain financial information from anyone seeking assistance. However, in some situations the financial need will be obvious. For example, immediately after a natural disaster, a fund's employees would not normally need to check on the financial resources of each beneficiary.

    Example

    Smithfield has been devastated by a tropical cyclone. A mayoral fund is set up to provide short-term assistance to residents who were victims of flood and cyclone damage. In the immediate short-term, the circumstances of the disaster itself would indicate the need for relief. During this period, close consideration of the potential beneficiaries' finances would not be necessary.

    End of example

    The fund must exclusively, or at least chiefly, relieve persons who are in necessitous circumstances. If the fund also provides benefits to persons who are not in necessitous circumstances, it is not a necessitous circumstances fund.

    Example

    A fund has been set up to distribute money evenly for the following purposes: financial need, disaster relief, talented children and sporting achievement.

    It is not a necessitous circumstances fund because it is not exclusively or chiefly for the relief of necessitous circumstances.

    End of example

    Persons receiving relief must be in Australia

    The persons receiving relief from their necessitous circumstances must be in Australia.

    Example

    A fund has been set up to provide money, food and clothing to victims of a plane crash in New Guinea.

    It is not a necessitous circumstances fund because it is not for the relief of people in Australia.

    End of example

    In exceptional circumstances, a fund established for the benefit of persons in Australia may actually provide relief to persons outside Australia. For example, a fund can provide money for an Australian person to have an operation overseas because the operation is not available in Australia.

    Example

    Justin is a 10 year old Australian boy with cancer. The most appropriate treatment is available at a clinic in Germany. Justin's family cannot meet the costs. A necessitous circumstances fund can help pay for Justin's treatment.

    End of example

    If you do not meet the requirements of this category and want to collect tax-deductible donations for people who are victims of disaster you may be able to under other DGR categories.

      Last modified: 13 Dec 2021QC 16220