Apr 2, 2024 Matthew Hung

Changes to Associations Incorporation Reform Regulations

In November the Associations Incorporation Reform Regulations 2023 came into effect.

What has changed?

• Change of reporting tiers (based on total revenue) for financial years ending on or after 1 July 2024:
  • Tier 1 – less than $500,000
  • Tier 2 – $500,000 to $3 million
  • Tier 3 – more than 3 million

• Threshold for voluntary cancellation raised from $10,000 to $50,000.  Incorporated associations with total assets (not net assets) of less than $50,000 can windup without the need to appoint a liquidator.
• Model rules have been updated.   Key changes include:
  • More flexible technology such as online attendance at meetings
  • New processes of disciplinary appeals and grievances.
  • Stronger disclosure requirements for a conflict of interest including a management plan for mitigating the conflict.
• Changes to fees for certain applications such as changing the association’s name.

What has not changed?

The general reporting requirements remain the same:

• Registered charities only need to report to the ACNC (and not Consumer Affairs) unless:
  • Part of a ACNC group
  • Permission has been granted to withhold details from the ACNC register

Associations that are either of the above need to report to both regulators.

• Tier 2 and 3 entities are still able to prepare either general or special purpose financial statements.
• Tier 3 entities must have their financial statements audited
• Tier 2 entities must have their financial statements reviewed or audited

Action points

If your association has adopted the model rules, these new rules are now in place.  You should:

• Circulate the new rules to members to ensure everyone knows their rights and obligations.
• Make sure any links to the rules on your web or internal resources are updated.

If your association operates under its own rules, the changes do not automatically apply.  However if those rules are silent on a matter that is required under the legislation, the equivalent clause in the model rules is deemed to be a part of your rules.  For example, if your own rules do not contain a grievance procedure, the new grievance procedure in the model rules now applies.  You should:

• Review your rules to ensure the 23 required matters (see below) are addressed.
• Circulate any rules that are now in place via the model rules.
• Consider amending your rules to incorporate any missing matters.

See https://www.consumer.vic.gov.au/clubs-and-fundraising/incorporated-associations/running-an-incorporated-association/rules for more details, including a list of the 23 required matters.

If you wish to know more, please contact us.