Necessitous circumstances funds

TAKE AWAY: A necessitous circumstances fund is a simple way to offer support to those in need.

What is a necessitous circumstances fund?

A necessitous circumstances fund, or NCF, is a public fund established and maintained to provide relief for Australians in ‘necessitous circumstances’. It is a vehicle for assisting people in financial need.

What does “necessitous circumstances” mean exactly?

“Necessitous circumstances” refers to financial need. A person faces necessitous circumstances if they face some degree of poverty or do not have the resources needed to sustain a modest standard of living in Australia.

Often, eligibility to receive income-tested benefits from the government is an indicator that a person faces necessitous circumstances.

Necessitous circumstances does not mean an inability to afford merely desirable advantages, and does not necessarily refer to the needs people have as a result of being sick, incapacitated or elderly.

Examples of necessitous circumstances

• A service club might set up a fund to pay for a carer and for modifications to the home of a teenager who had become a quadriplegic following an accident, if her parents could not cover the costs.
• A community might set up a fund to provide interest-free loans to people on low incomes to purchase whitegoods, heating and medical appliances.
• A fund could enable a family to pay for a life-saving medical procedure overseas if the family could not otherwise afford such treatment.

Other types of DGR funds

There are two other types of DGR funds which may be more appropriate if:

1. you want to do more than just distribute money or goods, and instead run programs to assist individuals in need.
2. you want to distribute money or goods to other organisations which assist people in financial necessity.

If this is the case, please talk to us and we will point you in the right direction.

Nuts and bolts of NCFs

An NCF is a trust fund and therefore is established by trust deed or by will.

An NCF must be a public fund and not private in nature. Therefore:

• the founders must intend that the public contribute to it;
• the public, or a significant part of it, must in fact contribute; and
• the public, or those with a degree of public accountability, must participate in the administration of the trust.

Getting help

If you’d like to explore the establishment of an NCF contact the Moores not-for-profit team on (03) 9843 2158 or nfpsupport@moores.com.au.

They would be happy to provide more detailed advice tailored to your circumstances and needs.

Disclaimer: This help sheet has been prepared by Moores, not-for-profit legal advisers. It provides a general guide and should not be relied on as (or in substitution for) legal advice.