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In sport, no one waits until the final siren to work out whether the game plan is working. Coaches and players use half-time to stop, get together, check the scoreboard, and regroup before the second half begins.

January plays that same role for businesses and not-for-profit organisations when it comes to finances.

For most organisations, the financial year runs from 1 July to 30 June. By January, December results are in, the Christmas rush has passed, and you are officially halfway through the financial year. That timing matters. It means you are no longer relying on projections or optimism – you are working with real data.

In simple terms, January is half-time.

It’s also worth acknowledging the reality for many Australian organisations. January can feel disjointed. Schools are still on holidays, routines are out of sync, and “normality” often doesn’t return until late January or early February. If January slips by, February isn’t ideal – but it’s absolutely not too late. Half-time still counts as half-time, even if you’re a few minutes late back onto the field.

The scoreboard doesn’t lie

At half-time in a footy match, the first question is obvious – are we in front or behind?

From a financial perspective, January answers that question clearly. Cash flow, profitability, tax position, debt levels, and progress against growth targets are no longer theoretical. You can see what is actually happening, not what you hoped might happen.

If revenue is tracking ahead of plan, that’s good news – but it still raises important questions. Are you genuinely in control, or riding a short-term spike? Is the organisation positioned to push for a strong finish, or is this a season where consolidation and resilience matter more? Should surplus cash be reinvested, used to reduce debt, or held as a buffer?

If performance is behind expectations, January offers something invaluable – time. Being behind at half-time is not a verdict. It’s information. With six months left in the financial year, there is still room to influence the outcome. Whether the goal is a comeback or a sensible rebuild, there are usually options available.

Pricing can be reviewed. Costs can be tightened. Cash flow timing can be improved. Strategy can be refined. Waiting until June to ask these questions is like reviewing game footage after the season has finished – useful for learning, but too late to change the result.

Halfway is where smart adjustments happen

Every sport accepts one basic truth – the original plan rarely survives contact with reality. Conditions change. Injuries happen. The opposition adapts.

Finances work the same way. Costs creep up quietly. Customer behaviour shifts. Interest rates move. Funding conditions tighten or loosen. A half-time review gives you the chance to pause, regroup, and decide what matters most for the second half.

Importantly, this isn’t about tearing everything up and starting again. Good coaches don’t do that at half-time. They focus on small, targeted changes that have the biggest impact.

Financially, that might look like:

• Adjusting pricing or fee structures
• Tightening expense management in specific areas
• Revisiting cash flow timing rather than total revenue
• Refining tax strategies while options are still open
• Re-prioritising projects based on actual performance, not assumptions

Reflection beats regret

There is also a psychological reason January (or early February) is such a powerful moment to review your financial position.

By mid-year, the pressure of year-end deadlines is still some distance away. That space matters. It allows for clearer thinking and better decisions. You are not acting out of panic – you are responding to information.

Author and performance coach James Clear often talks about the importance of reviewing systems, not just outcomes. Half-time is the ideal moment to do exactly that. Instead of asking only “Did we hit the number?”, you can step back and ask more practical, grounded questions:

• Are our systems producing sustainable results?
• Are we relying too heavily on a small number of clients or income streams?
• Are we working harder than we need to for the outcomes we’re getting?
• Have I actually put money aside for tax?
• Is my bank balance truly available cash, or will I need it later?

These are the questions that connect the metaphor to the real, week-to-week decisions being made inside the organisation.

In sport, half-time is often where momentum shifts. Teams that pause, regroup, and refocus tend to come out calmer and more composed. Financially, this moment offers the same opportunity.

The five-step framework: pause, reset, refocus

When half-time works well in sport, it follows a rhythm. The team stops. They look at the facts. They reset the plan. Then they head back out with clarity.

Financial reviews work best the same way. This is the five-step framework we use to turn half-time information into meaningful action:

• Set goals
  Be clear about what the second half is for. Is the focus on recovery, stability, or pushing for a strong finish? The answer shapes every decision that follows.
• Plan
  Adjust the plan based on what the numbers are actually telling you – not what you hoped they would say at the start of the season.
• Measure
  Look at the right metrics. Cash flow, margins, debt, tax exposure, and capacity matter more than vanity numbers.
• Report
  Translate the numbers into insight. What’s working? What isn’t? Where are the pressure points?
• Action / Reset
  Make small, targeted changes, then reset and go again. Half-time isn’t about perfection – it’s about momentum.

This framework reinforces a simple truth: half-time isn’t about judgement. It’s about clarity.

As management thinker Peter Drucker famously said, “What gets measured gets managed.”

Time is still your biggest advantage

From an accounting and advisory perspective, half-time is powerful because time is still on your side.

Tax planning is a clear example. When issues are identified in June, options are limited and reactive. At half-time, there is still room to plan properly – whether that involves restructuring, adjusting superannuation contributions, managing capital expenditure timing, or smoothing income across the year.

The earlier you see the issue, the more tools you have to address it.

Warren Buffett is often quoted saying, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” Half-time is when you can still plant trees that make a difference in the current financial year – not just the next one.

A reset, not a restart

It’s important to be clear about what a half-time review is not.

It is not about judgement. It is not about beating yourself up for decisions already made. And it is not about rewriting history.

In sport, half-time is not a verdict – it’s information.

That mindset matters. Financial reviews work best when they are practical, not emotional. Look at the numbers. Compare them to expectations. Understand why gaps exist. Decide what needs to change. Then reset and go again with clarity and intent.

Leadership expert John Maxwell puts it simply: “Sometimes you win, sometimes you learn.” Half-time is where learning can still turn into winning.

Treat it like half-time, not full-time

The biggest mistake many organisations make is skipping half-time altogether. January drifts by. February fills up. Attention stays elsewhere. The real scrutiny only arrives when deadlines loom, and by then the scoreline is largely locked in.

If you approach this point in the year the way a strong sporting team approaches half-time, it becomes one of the most valuable moments of the season. A chance to stop. A chance to regroup. A chance to decide deliberately how you want the second half to unfold.

The second half hasn’t been played yet.

If you’d like a half-time chat with one of our great Coaches – the kind you’d have in the sheds, not a sales pitch – reach out. Sometimes a short pause and a fresh set of eyes is all it takes to shift momentum.

What a year it’s been at Next Dimension Accounting. As we close out 2025, it’s worth pausing to reflect on the journey – the shifts, the growth, the learnings, and the momentum we’re carrying into 2026.

This year hasn’t been business as usual. We’ve experienced transformative change – staffing transitions, leadership evolution, strategic realignment – all while deepening our impact for not-for-profits (NFPs) and businesses who trust us as their accounting and advisory partner.

Leadership Transitions: A New Chapter Begins

This year saw one of the most significant transitions in our firm’s history. After years of leading Next Dimension with passion and vision, Brendan stepped back from day-to-day leadership for a period, allowing space for organisational growth and reflection. In November 2025 we proudly congratulated Joanne Fahd as our new Chief Executive Officer, marking an exciting new chapter as we evolve from a founder-led business to a scalable, team-driven advisory firm.

Brendan has taken on the strategic role of Head of Strategy & Innovation, where he will concentrate on business development, quality assurance and strengthening our client partnerships – ensuring continuity of vision even as we grow.

This transition reflects our commitment to sustainable growth and strong leadership continuity as we scale into the year ahead.

Team Growth and Development

2025 has also been a year of internal momentum. Our broader team – including Brendan, Jo, Tina, and the rest of the Next Dimension crew – has continued to refine how we serve clients across specialist accounting, advisory, and strategic support. Policies, processes and systems have matured as we sharpen our focus on efficiency, quality and impact.

We’ve invested deeply in talent development, strengthened our internal infrastructure, and broadened our skill set to meet the changing needs of purpose-driven organisations across Australia. (And yes – we’ve definitely learnt a lot about juggling priorities and growth at the same time!)

Sector Landscape and Client Priorities

Across the NFP sector and broader business community, 2025 brought persistent determination amid ongoing external pressures. Many organisations finished the year tired but determined – committed to their missions and pragmatically positioning for the future.

Our clients grappled with evolving regulatory change, shifting economic conditions and growing expectations for strategic financial insight – all areas where Next Dimension has proudly stood alongside them to provide clarity, planning support, and tactical direction.

Looking Ahead to 2026

So what’s next?
We enter 2026 with renewed focus and real energy. Our leadership is stronger and more collaborative than ever. With Jo at the helm and Brendan driving strategy, we’re confident in:

• Scaling our advisory services to provide even deeper impact.
• Expanding support for purpose-led organisations navigating complexity.
• Investing in our people and systems so we can deliver with excellence.
• Strengthening partnerships and client outcomes across sectors.

The road ahead is bright – and absolutely packed with potential.

Thank You

Thank you to our clients, partners and extended community. Your trust, collaboration and feedback continue to shape who we are and how we serve.

From all of us at Next Dimension Accounting – here’s to a restful holiday season and a big year ahead in 2026.

The Federal Government’s payday superannuation reforms officially passed Parliament on 4 November 2025, and the clock is now ticking. From 1 July 2026, all employers, including not-for-profits, small businesses and larger enterprises, will be required to pay superannuation guarantee (SG) contributions at the same time as salary and wages.

This reform represents one of the most significant changes to employer payroll obligations in more than a decade. The shift away from quarterly SG payments will require employers to review and adjust payroll systems, cash flow planning, payment cycles and internal approval processes. With a limited transition period remaining, early preparation is essential.

Under the new rules, SG contributions must generally reach an employee’s super fund within 7 business days of each payday. A different timing rule applies for new employees: the first super contribution must be made within 20 business days of the first wage payment in circumstances where the employer is contributing to a fund for that employee for the first time.

To support these changes, Single Touch Payroll (STP) reporting will expand to include additional superannuation data, SuperStream standards will be tightened to enable faster and more accurate payments, and the SmallBusiness Superannuation Clearing House(SBSCH) will be closed to new users from 1 October 2025 before being retired on 1 July 2026.

Stronger penalties for late payments

The ATO has strengthened the Superannuation Guarantee Charge (SGC) to emphasise the importance of timely payments under the payday super regime. In simple terms, the financial consequences of paying super late will be more substantial than they are today.

If contributions do not reach an employee’s fund within the required timeframe, employers may be liable for:

• The unpaid super amount
• Interest, to reflect lost investment earnings for the employee
• Administrative charges imposed by the ATO
• Additional penalties for ignoring the choice of fund requirements or failing to act on an ATO notice

Although the SGC will now be tax-deductible, the overall cost of late payment remains significant, and the administrative burden of rectifying non-compliance may be complex. The most straightforward and cost effective approach is to ensure contributions are paid correctly and on time.

Why this reform matters for employers

The move to payday super is designed to improve retirement outcomes for Australian workers by ensuring contributions are made promptly and consistently. It also reflects a broader shift toward real-time payroll reporting, faster digital payments and improved transparency across the superannuation system.

For employers, particularly those managing grant funding cycles, fluctuating revenue or complex workforce arrangements, the reforms mean taking a close look at payroll processes, budgeting, and internal controls well before the 1 July 2026 deadline.

What employers should do now

With the start date approaching quickly, employers should take action now to prepare for the new requirements. Key steps could include:

• Reviewing payroll software to confirm it can process superannuation on payday
• Planning for cash-flow impacts associated with more frequent super payments
• Preparing to transition away from the SBSCH if currently in use
• Auditing existing SG calculations to ensure accuracy and identify any risks
• Assessing whether to adopt payday super early to smooth the transition

By beginning this work now, employers can avoid unnecessary stress in June and ensure full compliance before the new system commences.

Work with Next Dimension Accounting to prepare

The transition to payday super will affect every employer. Next Dimension Accounting can guide your organisation through the new requirements, assist in reviewing payroll processes and cash flow implications, and ensure you are fully prepared well before 1 July 2026. The team will be in touch with existing clients, and we welcome new clients who may require assistance with Payday Super and other accounting requirements.

Next Dimension Accounting (NDA) is pleased to announce the appointment of Joanne Fahd as Chief Executive Officer, effective 3 November 2025.

This transition marks an exciting new chapter for NDA as it evolves from a founder-led firm into a scalable, team-driven advisory business. Over the past four years, NDA has doubled in size, which is a testament to the company’s commitment to excellence and innovation. The award-winning company remains fully open for business, ready to support clients with the same dedication and new momentum.

Founder Brendan Lucas will assume a strategic role as Head of Strategy, focusing on business development, quality assurance and strengthening client partnerships.

Reflecting on the transition, Brendan said, “Jo has been an integral part of NDA’s leadership since its inception. Her expertise across commercial, not-for-profit and public practice sectors, combined with her empathy and leadership, makes her the ideal person to lead NDA into the future.”

As CEO, Jo will oversee NDA’s day-to-day operations, drive client service excellence, and lead the firm’s growth strategy, supported by a strong executive team that now includes Montana Moylan, who steps into a leadership role. 

In accepting the role, Jo said, “It’s an honour to lead such a talented and dedicated team. NDA has built its reputation on trust, quality, and genuine relationships with our clients. I’m excited to continue that legacy while helping the firm innovate and grow sustainably”.

Media Enquiries: Montana Moylan
montana@nextda.com.au | 02 7227 2504

We are pleased to announce that our Founder & Managing Director, Brendan Lucas, has been invited by Better Boards to present an exclusive live webinar for not-for-profit leaders, ‘Financial Modelling for NFP Boards’.

Financial modelling isn’t just for CFOs or big corporates anymore — it’s a strategic must-have for NFP boards that want to lead with clarity, not confusion.

Join Brendan as he shares practical insights to help your board make smarter, data-driven decisions and take control of your organisation’s financial future.

Date: Friday 15 August 2025
Time: 1pm – 2pm AEST
Register here: https://betterboards.net/financial-modelling-boards-2025-webinar

You’ll walk away with:

• Clarity on what financial modelling is (and isn’t)
• How to choose the right tools
• What your board should be asking the CEO or CFO
• Common pitfalls (and how to avoid them)
• Real-world examples tailored for NFPs

Perfect for NFP board members, company secretaries, and execs who want to turn oversight into strategic insight

For many community organisations and not-for-profits, valuing in-kind contributions can be a confusing and time-consuming process. But these contributions can be the difference between a good grant application and a great one!

The NDA team has developed a brand-new In-Kind Contribution Cheat Sheet, a practical and easy-to-follow resource designed to help you assign value to non-cash support with confidence.

Whether you’re applying for government funding, philanthropic support, or local sponsorship, reflecting the real value of community contributions accurately is essential.
With extensive expertise in grant budget development and acquittal, the NDA team created this tool to make your grant process smoother, more strategic, and, ultimately, more successful.

With extensive expertise in grant budget development and acquittal, the NDA team created this tool to make your grant process smoother, more strategic, and ultimately, more successful.

Download the free In-Kind Contribution Cheat Sheet here.

A guide for not-for-profits on reimbursements, allowances, and honorariums.

Volunteers are the lifeblood of many Australian not-for-profits (NFPs). They give their time, skills and energy without expecting a pay cheque, but that doesn’t mean they can’t be reimbursed or recognised in other ways.

Whether it’s a board member travelling for meetings, a speaker at a charity event, or a long-term volunteer who has spent money on printing and supplies, there are times when paying volunteers makes sense. But the remuneration of volunteers must be done transparently, fairly, and in compliance with the Australian Taxation Office (ATO) and Australian Charities and Not-for-profits Commission (ACNC) regulations.

This guide explains the three main categories of volunteer payments – reimbursements, allowances, and honorariums/gifts – and offers tips on governance, reporting, and avoiding reputational risk.

Reimbursements: repaying volunteers for out-of-pocket costs

Reimbursements are the most common method of volunteer payments. When it is agreed that a volunteer purchases something for your organisation, such as stationery, parking for a board meeting, or petrol to attend a relevant event, repaying that cost is usually appropriate and non-taxable.

Genuine reimbursements, which don’t exceed the amount spent, are not taxable income for the volunteer and don’t need to be reported.

Best Practice:

• Ask volunteers to submit invoices/receipts as part of your reimbursement approval process.
• Consider using solutions such as ApprovalMax, Weel or DEXT to manage digital receipt uploads and payment tracking.
• Have an agreed policy regarding acceptable volunteer reimbursements.
• Be consistent in offering the same reimbursements to volunteers in similar roles.

Allowances: Pre-agreed flat rate payments

Unlike reimbursements, allowances are fixed payments made to volunteers to cover anticipated costs. They don’t require receipts, and the volunteer can keep any unspent amount.

The ATO defines allowances as:

“A definite, predetermined amount to cover an estimated expense… The recipient is not required to repay any excess if they do not spend it all.”

Allowances are generally considered assessable income for the recipient. If your volunteers receive allowances regularly, or they rely on them, they may need to declare this on their tax return

Examples of allowances include:

• A weekend volunteer receives a $50 flat rate for food and transport.
• A board member is paid a sitting fee for attending scheduled meetings.

These are sometimes referred to by charities as ex gratia payments, especially when provided in goodwill rather than as compensation.

ATO clarification on income treatment from a volunteer’s perspective includes:
“Generally, receipts that are earned, expected, relied upon and have an element of periodicity, recurrence or regularity are treated as assessable income of a volunteer.”

While allowances may be easier administratively, they can expose volunteers to unexpected income tax implications.

Governance Tips:

• Develop a formal Volunteer Payments Policy outlining when allowances apply and how they are approved.
• Consider whether the public or donors might misunderstand the purpose of the payment and be ready to explain it.

Honorariums and Gifts: Saying Thank You the Right Way

Honorariums are discretionary payments made without obligation, often to recognise exceptional voluntary service or thank someone for a professional service offered without charge.

While these kinds of volunteer payments are a generous gesture, honorariums and gifts must be handled with care.

According to the ACNC:

“It generally expects that any gifts or honorariums a charity may offer are of a token nature… Excessive gifts or honorariums could indicate that the charity’s financial affairs are being irresponsibly managed.”

Examples:

• A $200 one-off payment to a speaker who presented at a conference.
• A commemorative watch for a retiring volunteer.
• A bottle of wine for a community member who donated their time to run a workshop.

If the services provided are professional (e.g. legal, accounting, training), the ATO may classify the honorarium as assessable income, particularly if the work resembles paid employment.

Additionally, in some circumstances, non-cash gifts may give rise to fringe benefits tax (FBT) implications for the NFP.

Volunteer Management Tips:

• Be aware of situations where the volunteer’s work resembles paid employment.
• Volunteers who receive an honorarium for professional services may also be eligible to claim deductions for related expenses, provided the income is declared.

Governance and Legal Considerations

When offering financial recognition to volunteers, NFPs must consider more than just tax treatment. Be aware of the following governance and legal issues when making decisions about volunteer payments.

• Conflict of Interest and Related Party Issues:
  Payments to board members (or their relatives) may create a conflict of interest and fall under Governance Standard 5, which requires charities to act in the best interests of the organisation and manage conflicts transparently.
• Fundraising Laws and Trust Restrictions:
  In some states, fundraising laws restrict what board members (known as “Responsible People”) can be paid. If your charity is a trust, payments to trustees are only allowed if the trust deed specifically permits it.
• Financial Reporting Obligations:
  Under AASB 124, charities must disclose significant related party transactions, such as honorariums to board members, unless the payments are both immaterial and on arm’s length terms. Even small charities preparing special purpose reports are now required to disclose the nature and amount of related party transactions in their financial statements and Annual Information Statement. This shift aims to improve transparency and accountability across all tiers of the sector.

ACNC reporting: charity size and exemptions

The ACNC sets different reporting standards for medium and large organisations, depending on their size and any exemptions that apply; for example:

• Medium: Financial reporting required; payments should be included in reports.
• Large: Full financial reporting and remuneration disclosures required.
• Religious charities: May be exempt, but check your specific status on the ACNC website.

Where payments are made to board members or their close associates, the ACNC now requires all registered charities to disclose related party transactions in their Annual Information Statement (AIS). It also recommends having a clear policy in place to manage these relationships and ensure decisions are made in the best interests of the charity.

A best practice approach to volunteer remuneration:

• Develop a Volunteer Payments Policy that covers your approval process, relevant thresholds, and the handling of receipts.
• Maintain transparency with stakeholders and donors
• Manage expectations about the nature of the payment
• Seek professional advice for complex arrangements.

FAQs

Can a volunteer be reimbursed without paying tax?
Yes. If the reimbursement matches actual costs and isn’t more than the amount spent, it is not assessable income.

Is an allowance the same as a reimbursement?
No. A reimbursement repays actual expenses. An allowance is a pre-agreed flat payment and is generally taxable.

Are honorariums considered income?
They can be. If the honorarium is tied to a service with professional value or regularity, it may be assessable income for the volunteer.

Do all charities need to report volunteer payments?
Reporting depends on your charity size. Medium and large charities must report payments; small ones may not be required to report.

Our team works with a wide variety of NFPs, and we can provide professional advice about volunteer remuneration. Book a meeting today to learn more.

Aged care providers now have an additional four months to prepare for the rollout of the Australian Government’s Support at Home reforms, which will now commence on 1 November 2025.

While the extension offers some welcome breathing room, it is essential that providers use this time wisely. Now is the ideal moment to assess readiness, strengthen internal systems, and ensure your organisation is well-positioned to implement these significant sector-wide reforms.

To support providers in understanding the transition, the government has released a comprehensive manual titled “Support at Home Program Manual – A Guide for Registered Providers”. This manual has been revised to reflect ongoing developments. The latest Version, 3.0, was released in June 2025, offering the most up-to-date and practical information to support implementation.

The manual provides clear guidance on how registered providers can meet the rules, procedures, and obligations under the Support at Home program.

For NFP organisations preparing their accounting and compliance frameworks ahead of the new arrangements, the key areas of interest include:

• Review of the service list to ensure alignment with eligible services under Support at Home
• Service pricing and caps, including how providers can set prices within government defined limits
• Revised payment cycles and their implications for cash flow and reporting
• Grandfathering provisions for existing HCP clients and participant contributions
• Allocation and responsibilities of Care management under the new model.

Reviewing your Support at Home service list offering

The Support at Home program will replace the existing Home Care Packages (HCP) and Short-Term Restorative Care (STRC) programs. The new program has a defined service list outlining the funded services available to eligible participants.

Recommendation:

The government has issued a document outlining the services that participants can access under the Support at Home program. It’s recommended that your organisation review their service list offering in comparison to the Support at Home Service List to gain a full understanding of in-scope and out-of-scope activities.

Setting prices for your aged care services

Fair and transparent pricing is a core principle of the new Support at Home program. The initiative is designed to introduce capped pricing, ensuring greater consistency across service providers and preventing any inflated costs. At this stage, capped pricing will not be introduced until 1 July 2026.

Leading up to commencement, providers are required to communicate to existing participants and publish their prices for the services they deliver on the My Aged Care Service and Support Portal.

When setting prices, providers must ensure that the price reflects the full amount of revenue they will receive for delivering the service.

Unlike the current Home Care Packages (HCP) or Short-Term Restorative Care (STRC) programs, where separate charges for administration, travel, or care management could be applied, the Support at Home (SaH) program requires that all such costs be included within the unit price of the service itself.

This means providers will need to carefully calculate and consolidate:

• Service delivery costs
• Administration and operational overheads
• Travel and logistics expenses
• Any relevant care coordination components.

A clear, well-structured pricing model will be essential to ensure compliance, financial sustainability, and transparency under the new framework.

Recommendation:

Although the government has not yet finalised the pricing caps for Support at Home services, providers should not wait to begin planning. It is strongly recommended that your organisation fully cost its regular services now to understand the minimum viable pricing required for sustainable service delivery.

By identifying your true costs, including direct care, overheads, administration, and compliance-related expenses, you’ll be in a stronger position to:

• Align future pricing with government-set caps
• Avoid under-pricing services that may become financially unviable
• Justify your pricing strategy internally and externally
• Respond quickly when the official pricing framework is released.

Taking a proactive approach now ensures your organisation is financially prepared and operationally responsive when the final price limits are announced.

Payment Cycles and Provider Cash Flow

Under the new system, there are new rules for claiming. Providers must only claim for services on their service list that have been approved in the participant’s Notice of Decision and support plan at the agreed price. Payments are made on an arrears basis, and providers can determine the frequency of their claims, whether that is daily, weekly, fortnightly, monthly or quarterly. Claims can also be submitted individually or in bulk. Once the provider’s claim has been validated for payment, Services Australia will:

• Deduct the government funded amount and participant contribution amount from the participant’s budget
• Pay the provider the government funded amount.

Note: It is the provider’s responsibility to collect the participant’s contribution.

Successfully validated claims submitted online to Services Australia have a 7-day processing time between approval and payment being made. For ongoing services, providers have 60 days after the last day of the quarter to submit their claims. For short-term services, providers have 60 days after the completion of the episode to submit their claim for each participant.

Recommendation:

Providers should review several areas to ensure that their financial operations are aligned with the changes.

It is important to review and align your financial system or CRM to ensure it can:

• Track service delivery against approved participant plans
• Separate government funding and participant contributions
• Handle multiple claiming frequencies and formats
• Issue participant statements in the approved format, including all required information.*

You will also need to develop a cashflow management strategy which includes:

• Recognising any pressures on cash reserves or liquidity to account for arrears-based payments
• Adjusting your billing cycle, if required, to match the 7-day turnaround time for Service Australia payments.

Streamline your claiming processes to ensure that:

• Staff are trained on what a provider must submit for a successful claim. More guidance is found in the document titled ‘Support at Home User Guide – submitting claims to the Aged Care Provider Portal’. This can be found on the department’s website.
• Internal deadlines for submitting claims are set well within the 60-day window.
• You establish checks for your data before submitting to avoid any claim rejections.

Track your claim submissions and reconciliation by building a dashboard or report that will monitor:

• Claims submitted vs claim status
• Funds received vs what was expected
• Participant contributions outstanding.

*More information on participant statements can be found in the Support at Home Manual, and a Support at Home monthly statement template can be found on the department’s website.

The ‘Grandfathered’ provision on participant contributions & Unspent HCP Funds

A ‘no worse off’ principle applies to grandfathered Home Care Package care recipients. This applies to recipients who, on or before 12 September 2024, were either receiving a Home Care Package on the National Priority System or assessed as eligible for a package. The ‘no worse off’ principle applies to participant financial contributions.

The premise is that participants will make the same contributions or lower contributions than they would under the Home Care Package system, despite any reassessment into a higher Support at Home classification.

In practical terms for HCP recipients, this means that:

• Recipients who did not have to pay an income-tested fee – will continue not to have to contribute to Support at Home
• Recipients who paid an income tested fee – will pay the same amount or less under Support at Home as they did under Home Care Packages.

Transitioned HCP care recipients who have unspent funds at the commencement of Support at Home retain these funds for use under Support at Home. The prioritisation of claiming varies depending on the type of service being delivered.

When claiming regular or short-term services (e.g. Care services, restorative or end-of-life support), the following order will apply:

• The participant’s active Support at Home Budget
• Provider-held HCP Commonwealth unspent funds – funds that are transitioned with the participant and held by the provider
• HCP Commonwealth unspent funds in the Home Care Account – funds that are transitioned with the participant, administered, and held by Services Australia.

For Assistive Technology and Home Modifications (AT-HM), the claiming order is:

• Provider-held HCP Commonwealth unspent funds
• HCP Commonwealth unspent funds in the Home Care Account
• AT-HM funding tiers – these will be the pre-allocated funding levels depending on participant needs and eligibility.

Recommendation:

For any grandfathered HCP care participants, Services Australia will notify them and their provider of the contribution amount payable. As the provider, you will need to invoice the participant for their contribution through your CRM or accounting system.

Providers need to monitor the amount of HCP unspent funds transitioned to the participant to avoid overspending in the participant’s budget. Also, when Provider-held funds are used for service delivery, it is essential to ensure that the funds have already been paid to the provider.

Care Management Allocation to Providers

Another key difference between the Support at Home program and the programs it replaces is the approach to Care Management – both in terms of its scope and how it is funded.

Care Management refers to the ongoing coordination, planning, and monitoring of aged care services tailored to the needs, preferences, and goals of the participant. It ensures services are delivered safely, effectively, and in line with the participant’s support plan.

Under the Support at Home program, care management will be delivered by a designated staff member known as a care partner. These care management activities will be funded through the provider’s Care Management Account.

For participants receiving ongoing services, 10% of their quarterly support budget will be automatically allocated to care management. These contributions will be pooled with care management funds from other participants to form the provider’s collective Care Management Account, from which eligible care management activities can be drawn.

Activities that can be claimed by providers from their care management account are:

• Care planning – involves working with participants, their families, and support networks to identify individual needs, goals, and preferences and to develop tailored care plans, service agreements, and budgets.
• Service planning and management – involves the ongoing coordination and management of funded aged care services to ensure they are comprehensive, culturally appropriate and responsive to the participant’s needs.

Monitoring, review, and evaluation involve the ongoing assessment of the participant’s needs, goals, and care outcomes through regular communication, case conferencing, and evaluation.

Support and education involve empowering participants to make informed decisions, promoting wellness and reablement, and helping them navigate the aged care and health systems.

Recommendation:

Providers must ensure that their care partners understand the scope of care management. We recommend that you clearly distinguish between service delivery activities that form part of routine service delivery and those that are claimable under care management activities from the Care Management Account.

The transition to the Support at Home program brings significant changes that require careful planning and preparation by providers. If your organisation needs support in assessing the financial implications of the new program, Next Dimension Accounting is here to help. Our team has played a key role in guiding clients through the reform process and preparing them for what lies ahead.

For further information about Support at Home, get in touch with us today.

Karen Wong, Operations Manager at Allergy & Anaphylaxis Australia (A&AA), has overseen significant growth in the organisation’s operations. With expert guidance from Next Dimension Accounting, A&AA transitioned to more structured, cost-effective financial systems that have enabled stability and scalability during a critical phase of development.

A&AA is a registered charity founded in 1993. It is a national patient support organisation dedicated to helping individuals and carers alike in managing allergic diseases. Historically focused on food allergies, it now covers the full spectrum of allergic disease such as insect allergy, allergic rhinitis (hay fever), atopic dermatitis, allergic asthma and other potentially life-threatening conditions. It created Food Allergy Week, held in May each year, to raise awareness in Australia.

Headquartered in Castle Hill, Sydney, the A&AA team has tripled in size in recent years, with revenue increasing to $1.8 million per annum. As many of A&AA’s roles require clinical expertise, its volunteer base remains intentionally small, focused on governance and administrative support.

Partnering for Stability and Scalability

The partnership with Brendan Lucas, Founder & Managing Director at Next Dimension Accounting (NDA), began when he was recommended to review A&AA’s payroll systems. With their in-house bookkeeper nearing retirement, the organisation explored outsourcing options that could support growth while maintaining financial oversight.

Next Dimension stepped in with a customised solution, combining Brendan’s strategic leadership with the capabilities of a broader NDA accounting team. The result was a smooth, well-managed transition from internal systems.

“It is actually costing less than our spend on an on-staff person doing payroll and bookkeeping ,” Karen explains. “The Next Dimension team are very good at producing management reports that meet compliance standards, and all functions are done well.”

Today, Next Dimension manages all payroll and accounts processing and delivers monthly reporting.  A&AA and NDA hold regular review meetings. As a grants based organisation, A&AA deals with complex acquittals at times, and Next Dimension assists when acquittals require extra accounting knowledge. “They are a key part in helping us be a financially sound organisation,” says Karen.

In addition to operational support, Karen consults directly with senior NDA team members Tina and Vivian for higher-level accounting matters. “We get a lot more out of the outsourced team with their higher-level analysis and commentary,” she says.

Efficient Systems and Proactive Problem-Solving

One of the most valuable aspects of the relationship has been Next Dimension’s ability to streamline A&AA’s accounting processes and embed consistent routines. “It’s now very stable and consistent, a nice routine where they are really functioning like an internal accounts team, just on the end of a video call,” says Karen.

She especially appreciates the team’s problem-solving approach and efficient use of technology. “The Next Dimension team can think through problems for us and implement something once, rather than us wasting time with multiple attempts to work it out ourselves.”

For example, the team introduced stronger processes around financial security and system access. “They helped us implement security measures in Xero and moved us to digital debit cards, which has improved security and minimised disruptions,” says Karen, “and the team is always up to date on things happening in the accounting space.”

From Firefighting to Forward Planning

Karen reflects that in the past, the organisation was often stuck in reactive mode. “One of the challenges while we were very small was that we were always firefighting rather than improving the business,” she recalls. “Now, we can take advantage of the expertise provided by NDA and this adds focus to our strategic thinking and actions.”

That Next Dimension expertise has helped A&AA elevate its reporting, budgeting and forecasting practices. 

With input from the NDA team, what was once a basic budget is now a multi-year financial planning model. “We’ve refined our budgets each year. We now have a three-year forecast, which allows us to see how we can fund new developments and keeps us focused on our financial sustainability,” notes Karen.

Digital Strategy and New Projects

Operations strengthened by good accounting practices have supported A&AA’s recent strategic expansion.  In response to growing public demand, A&AA adopted a digital-first strategy, with a major investment in a new website and upgraded IT infrastructure. The strategy also included more sophisticated analysis of how users interact with digital resources to better shape service delivery.

“It was a very big undertaking and investment,” says Karen, “but we are now starting to see good results, including 30% growth in website traffic since launching our new website in October 2024. The new site gives the public quick access to information and enables one-on-one support when needed.”

The organisation is also advancing a number of targeted digital projects:

• Eating Out with Allergies: A national awareness campaign about staying safe when dining out, and understanding rights and responsibilities related to food allergies.
• Eczema Connect: A clinical trial conducted in partnership with Perth Children’s Hospital. The trial will assess the impact of expert advice prior to a specialist appointment.
• The Shared Care for Allergy Project: Delivered in collaboration with the National Allergy Council to improve access to specialist care and shared care models. Funding is provided by the Australian Government, Department of Health.

“With allergies, you are living with them every day. It’s about getting optimal care,” says Karen. “We provide information in bite-size pieces. We’ve found that when people understand more, they get much more out of a specialist appointment. Navigating the health system is challenging and understanding who may be involved with your care, and why, helps people to find health care professionals that can support their diagnosis and treatment.”

A Foundation for Future Growth

Karen emphasises that the partnership with Next Dimension has been instrumental in helping A&AA balance operational stability with ambitious long-term goals. “They’ve really become the financial engine behind our operations,” she says. “Their team brings qualified expertise, timely reporting, and deep financial insight that we wouldn’t otherwise have access to.”

The organisation is committed to raising public and professional awareness about allergic disease, which impact an estimated 6 million Australians “Our vision is to improve quality of life for all Australians with allergic disease.  We do this through advocacy, support, education and guidance. Central to this is a commitment to  empower people to help them with their everyday life and to connect with credible and evidence-based information and health professionals,” says Karen. As A&AA continues to expand its impact and reach, financial strategy remains central to its success.

“We have very audacious goals,” Karen acknowledges. “But with the knowledge, reporting, and financial nous of the Next Dimension team, we can build a strong foundation to achieve them.”

In the lead-up to the next federal election, the 2025 Federal Budget positions itself as a cautious but considered offering for Australian businesses and not-for-profits (NFPs). Delivered in an environment of inflationary pressure and global uncertainty, the Budget favours targeted relief over sweeping structural reform

A Budget of Targeted Relief, Not Systemic Reform

For businesses and NFPs operating in consumer-facing sectors, the continuation of income tax cuts and energy rebates may translate into marginal improvements in discretionary spending and donor activity. The starting rate of income tax will reduce from 16% to 14% by 2027–28, a move designed to ease cost pressures on households. However, given the relatively small size of the annual tax saving for most income brackets, the flow-on benefits for community contributions and service demand are likely to be modest.

Small businesses and NFPs will also benefit from extended energy rebates, with around one million eligible enterprises receiving up to $150 directly off their power bills through to the end of 2025. In addition, the Energy Efficiency Grants for Small and Medium Enterprises program will provide $56.7 million in grants (up to $25,000 per business) to support upgrades such as replacing inefficient appliances and improving heating systems.

Workforce Reform

A notable reform in this year’s Budget is the proposed ban on non-compete clauses for employees earning under $175,000, part of a broader effort to enhance wage growth and labour market flexibility. While this shift may benefit workers seeking new opportunities, it may pose real challenges for employers — particularly small businesses and not-for-profits that already struggle to compete on salary alone.

NFPs already have limited capacity to compete on salary, as we’ve highlighted previously, so the removal of non-compete protections for small to medium businesses and not-for-profits may intensify talent churn.

No Instant Asset Write-Off

One omission for small-to-medium enterprises and community organisations is the failure to extend or legislate the $20,000 instant asset write-off. As it stands, the threshold is set to revert to $1,000 from 1 July 2025, significantly limiting the ability of smaller operators to invest in capital improvements such as IT systems, machinery, or office upgrades.

Health, Aged Care and Frontline Service Delivery

The Budget includes several headline investments in healthcare and aged care including:

• $2.5 billion to support wage increases for aged care workers,
• $8.4 billion to expand bulk billing, aiming to deliver 18 million extra GP visits annually by 2030, and
• $1.8 billion in top-up funding for state-based public hospitals.

However, without proportional increases in operational or infrastructure funding, the risk is that providers may be unable to scale service delivery in line with policy ambition.

ATO Compliance

The government is making a substantial investment in tax compliance and enforcement. With $999 million allocated over four years, the Australian Taxation Office (ATO) will expand its compliance footprint through a suite of programs aimed at improving integrity and increasing revenue without raising taxes. Funding will be allocated across the Tax Avoidance Taskforce, Shadow Economy Program, Personal Income Tax Compliance Program and the Tax Integrity Program.

Regulation, Fair Trading, and Sector Integrity

Beyond tax compliance, the Budget includes several measures aimed at strengthening the regulatory environment including $12 million to improve oversight of the Franchising Code of Conduct, enhance detection of phoenixing activity (especially in construction), and extend protections against unfair trading practices and $3 million for ASIC to target illegal phoenixing practices.

Final Reflection

The 2025 Federal Budget delivers measured, election-conscious support for businesses and not-for-profits, with selective relief measures and a focus on health and workforce reform.  

What’s clear is that both businesses and NFPs will need to navigate the coming year with increased scrutiny, tighter margins, and growing demand.

2025 is shaping up to be a pivotal year for businesses and not-for-profits (NFPs) in Australia, particularly as it coincides with a federal election. Key legislative changes and proposed policies from both the Government and the Opposition will impact a wide range of sectors.

Staying informed and proactive is critical to navigating these shifts successfully. Below are ten significant issues we have identified for the months ahead.

1. Expanded Mental Health Support for Small Businesses

The Government has allocated $10.8 million over 18 months to programs like NewAccess for Small Business Owners and the Small Business Debt Helpline. These free and confidential services will provide tailored support for financial and mental health challenges faced by business owners.

Action/Impact:
Take full advantage of these programs while funding is available.

2. Governance and Ethical Use of AI

AI technologies will continue revolutionising our work over the coming year and present significant ethical and governance risks. The Australian Government is considering mandatory regulations for high-risk AI applications. Resources like the AICD Director’s Guide to AI Governance offer practical strategies to manage these challenges.

Action/Impact:
Boards should prioritise implementing governance frameworks to ensure the responsible use of AI. Consider forming committees to assess risks and opportunities associated with AI adoption.

3. Cybersecurity and Supply Chain Resilience

As supply chain attacks rise, all organisations are advised to focus on compliance and security.

Action/Impact:
Strengthen third-party relationships and invest in technologies that bolster supply chain security. Regularly review vendor risk management strategies. Engage the services of an IT cybersecurity professional to get the best advice and understand where you may be vulnerable and how to mitigate your risks.

4. Changes to Fringe Benefits Tax (FBT) for PHEVs

Starting April 2025, plug-in hybrid electric vehicles (PHEVs) will no longer qualify for FBT exemptions as low-emission vehicles. Businesses and NFPs using PHEVs must act quickly to secure binding agreements before this deadline to maintain exemptions.

Action/Impact:
Review vehicle contracts immediately to lock in exemptions. Evaluate alternative sustainable fleet options.

5. New Aged Care Act Commencing 1 July 2025

The new Aged Care Act introduces a rights-based framework emphasising simpler access, greater choice, and stronger protections for aged care recipients.

Action/Impact:
If your organisation operates in the aged care sector, review policies and procedures to ensure compliance with the Act’s requirements. Consider additional training for staff to align with the new framework. The Federal Government has also recently announced The Support at Home and new Aged Care Act Transition Support 2024-25 Grant Opportunity (GO7421) designed to provide $10,000 for upgrading IT systems.

6. Policy Shifts in Green Jobs and Energy Transition

The Government will continue to expand support for green jobs across the energy sector, offering funding to employers engaged in tasks like solar panel installation. This aligns with Australia’s sustainability goals, including plans to build 1.2 million homes over five years.

Action/Impact:
Explore funding opportunities for green projects and assess workforce needs to align with energy transition goals.

7. Apprenticeship Incentives to Address Workforce Gaps

Prime Minister recently announced an election policy of a $10,000 cash bonus available for apprentices in residential construction and clean energy sectors starting 1 July 2025. This initiative aims to address critical workforce shortages while promoting sustainability.

Action/Impact:
This policy will depend on whether the Government is returned post-election.

8. Instant Asset Write-Off Threshold

The Coalition has proposed increasing the Instant Asset Write-Off Threshold from $20,000 to $30,000, though it is unclear whether the Government will match this policy. This change could provide small businesses additional opportunities to invest in capital assets.

Action/Impact:
Small business owners should monitor developments closely. Consider deferring major purchases until there is more clarity regarding the potential threshold increase post Federal election.

9. Wage Theft Penalties

From January 2025, the criminalisation of wage theft introduces penalties of up to 10 years in prison and fines exceeding $7.8 million for companies. Small businesses with fewer than 15 employees will not face prosecution if they adhere to a yet-to-be-finalized wage compliance code.

Action/Impact:
Ensure payroll systems are accurate and compliant. Monitor developments on the wage compliance code and align practices accordingly.  Software such as Deputy and Employment Hero can help systemise your payroll particularly around award interpretation. Our team work closely with clients to support their compliance in this area.

10. Tax Deductions for Dining and Entertainment

The Coalition has proposed a tax deduction of up to $20,000 for dining and entertainment expenses for small businesses with turnover under $10 million. Alcohol expenses are excluded.

Action/Impact:
If implemented, this policy could boost spending in hospitality and enhance staff/client engagement opportunities.

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Preparing for What’s Ahead

To thrive in 2025, businesses and NFPs must take a proactive approach. Preparation is key, from leveraging potential tax breaks to addressing digital transformation and workforce gaps. Begin assessing how these changes might impact your organisation and develop strategic plans to stay ahead of the curve.

Engaging with industry experts like Next Dimension Accounting and communicating with stakeholders will ensure you remain agile in a dynamic operating environment.

The past twelve months have tested and rewarded NFPs and businesses in equal measure. As we head towards 2025, it’s worth taking a moment to assess where we stand and consider how we can maximise the opportunities ahead.

Interest rates

The cash rate held steady at 4.35% throughout 2024, and while everyone loves to guess when rate cuts might finally arrive, experts say we may have to wait until mid-2025 to see any changes, though some recent reports suggest it could be February 2025.

Award wage rate increase impacts

Midway through the year, many workers saw a boost, with the award wage rate climbing to 3.75%, adding another layer of complexity for businesses and NFPs already navigating tight margins.

Throughout 2024, high interest rates and wage increases have caused many clients to look at refinance options, tightening their expenditures and reviewing their business plans. 

Boards focusing on managing risk

At the board level, many companies and NFP organisations concentrated on managing risks, revising budgets, and exploring new strategies to navigate challenges. In some cases, survival tactics became necessary, with several businesses and NFPs opting for amalgamations as a means to stay afloat.

Instant asset write-off and the Federal Election

Legislation to extend the $20,000 instant asset write-off for another year was left on the cutting room floor as Parliament rushed to finalise bills before Parliament rose for 2024. This leaves the future of this important tax incentive uncertain. With the federal election on the horizon, both parties may focus on this issue when campaigning.

Superannuation reforms stalled

The revised super rules targeting balances over $3 million are still to be released, adding to uncertainty for taxpayers. It means there could be tweaks before passing in parliament, making it harder to assess their future impact.  Again, this issue may be impacted by the upcoming federal election.

Staff challenges

With Australia’s unemployment rate holding steady at around 4%, the challenge of attracting and retaining high-quality staff is expected to persist, continuing a trend seen over the past few years.

Support at Home Reforms

The Government’s Support at Home program will be rolled out in some form from 2025 onwards, although it is still unclear how those critical providers, including transport, will be funded. The program will bring together current in-home aged care providers and is intended to improve access to services, equipment and home modifications. It will be interesting to watch how this impacts NFPs and businesses that cater to the sector – we are working closely with a number of clients on this.

Expect greater ATO and ACNC scrutiny

From the ATO’s point of view, increased audit activity will be seen in the new year. The ATO’s revenue collections have been under immense pressure in the past few years, given the impact of the pandemic on budgets. 

Greater scrutiny and focus on data matching between SuperStream and single-touch payroll reporting will be used to identify employers delaying superannuation payments. Employers who fail to meet Super Guarantee Contribution deadlines could face interest charges and potential penalties.

The ACNC will continue to take a more active role in the NFP sector, with the public demanding more oversight of charitable donations. However, stricter regulations and compliance requirements should improve the outcomes of organisations that qualify for charity status. 

Strategies for stability and growth

As well as tightening budgets, forward-looking organisations have responded to financial challenges with plans to improve revenue streams.

Boards have been ensuring the financial security of their organisations by returning to their investment strategies. Those businesses – and some NFPs – sitting on excess funds have seen their money work productively for them. Higher interest is boosting deposits, cash rates are up and most global stockmarkets are performing well. 

As business plans are reviewed, we’re seeing most clients look at new ways to stand out. Although it is a very competitive environment, with everyone looking for ways to make their dollar go further, there are strategies to get ahead.

Your game plan

If you haven’t already, plan for your year ahead based on more of the same conditions for at least the first half of 2025, and sharpen your familiar game tactics:

• When dealing with suppliers or making major purchases, make sure you negotiate to get the best deal.
• Continue to find ways to operate more effectively and economically, especially by utilising technology to automate tasks.
• Review each segment of your business and analyse how its returns could be improved in the best way.
• Re-engage with your key customers and staff – they will be critical to your success.

For your game plan to maximise positive developments and achieve sustainable growth, don’t forget these two essentials: 

• Bring out the best in your people, whether they are paid staff or volunteers
• Enhance the benefits for your customers or clients.

Wishing all our clients and broader network a Merry Christmas and a Happy New Year. As we look ahead to 2025, we encourage you to connect with us to explore strategies to help you seize opportunities and tackle challenges confidently in the year to come. Reach out to our team today to start that conversation.

A quick Google search about Australia in 1986 reveals that the average capital city median house price was just over $80,000, people were still renting VHS tapes for movie nights, and salary-sacrificing options for Not-For-Profits were introduced as a fantastic tool for attracting top talent.

But here we are, nearly 40 years later. The cost of living has skyrocketed, wages have increased, and house prices have reached unprecedented levels. Despite these seismic shifts, the salary-sacrificing caps for the not-for-profit (NFP) sector have stayed more or less the same.

What once gave NFPs a competitive edge is outdated and ineffective, eroded by inflation and wage growth.

In other words, salary-sacrificing advantages have been whittled down to become relics of a bygone era. Without government action, they will continue to hinder the sector’s true potential.

The Evolution (and Inertia) of NFP benefits

The introduction of the Fringe Benefits Tax (FBT) system in 1986 was a game-changer for the not-for-profit (NFP) sector. By offering concessional treatment and the ability to ‘salary package’, the government gave NFPs a powerful recruitment tool, allowing them to attract and retain skilled talent through tax-exempt salary packages. This move helped level the playing field between charities and the commercial sector, making it easier for NFPs to compete for top talent.

In 1994 new tweaks to the FBT calculation method threatened to disrupt the sector’s newfound advantage. However, the introduction of rebates for income-tax-exempt employers ensured they wouldn’t bear the brunt of these changes, allowing NFPs to continue benefiting from the system.

Caps were introduced from 1 April 2001 to limit the concessional tax treatment provided. The caps were set at $30,000 per employee for Public Benevolent Institutions (PBIs) and health promotion charities and $17,000 per employee for hospitals and ambulance services. It’s important to note that these caps are ‘grossed-up’ values, meaning that the actual ‘cash’ value that someone can salary package is actually $15,900 for PBIs and $9,010 for hospitals.

The system was further tightened on 1 July 2005, and charities needed to be endorsed to access the FBT concessions.

In 2016, a Meals cap of $5,000 grossed-up ($2,650 cash) was a major change, as previously, it was uncapped. A cap on Meals, entertainment, Holiday Accommodation and Venue Hire benefits remains in place.

While the government has occasionally flirted with reforming NFP sector arrangements, meaningful action has yet to be taken. In 2012, Treasury released a discussion paper from the NFP Sector Tax Concession Working Group, exploring various reform options – but that went nowhere.

Despite discussions, little changed in the decades that followed. As living costs soared, the benefits intended to support the NFP sector began to erode, leaving charities at a distinct disadvantage when competing with businesses for skilled workers.

Diminishing benefits

Statistics from the ABS and Fair Work Commission reveal that over the years, there has been no indexation, and the percentage of wages covered by the FBT concessions has diminished.

YEAR	MINIMUM WAGE EARNER (NFP)	COVERAGE – MINIMUM WAGE	AVERAGE WAGE EARNER	COVERAGE – AVERAGE WAGE	MAX SALARY (FBT EXEMPT NFP)	ENTERTAINMENT CAP (FBT EXEMPT NFP)
2001	21,496	34,745	74%	34,745	46%	uncapped
2013	32,354	77,932	49%	77,932	20%	uncapped
2023	45,905	98,202	40%	98,202	15%	2,650

Observers of the NFP sector have noted that rising costs of living have, in effect, diminished the benefits of concessions. Tony Vitacca, from Go Salary, an external Salary Sacrifice provider, says:

“Although salary packaging remains an integral part of an NFP’s remuneration and benefits offering, it has remained somewhat of an afterthought when it comes to indexation. The rapidly rising costs of living have meant that the tax savings derived from salary packaging are not what they used to be.”

Where once salary sacrificing arrangements could potentially equalise the two sectors when competing to recruit the same talent, that is no longer the case. It’s just not enough and charities are struggling to retain and attract talent.

The government needs to acknowledge that charities play a critical role in society by protecting our most vulnerable members.

What will need to change?

NFP salary sacrificing benefits should be brought up to pre-2024 levels. Ideally this would include the adjustment of salary sacrifice benefits for indexation of the last 20 years. However, since budget challenges are a given, the very least the government could provide is a commitment for the cap to be indexed moving forward, among many other tax regimes.

There have also been calls to change the workings of the charity sector, with an emphasis on making charitable organisations more like companies so they can operate effectively and have greater impact on society.

The popular book Uncharitable by Dan Palotta, based on his 2013 TED Talk and recently made into a documentary film, argued for a change in how charities are perceived. This would involve a shift from the public asking how much of their donation goes into overheads, rather than the cause, to the public understanding that the overhead costs of a charitable organisation provide essential investment in impact.

Tony Vitacca comments, “We see first-hand the important and varied roles that NFPs play in the community. In a competitive employment environment, it’s crucial for employers in the social sector to have access to a fairer playing field when it comes to remuneration.”

If the government truly recognises the critical role NFPs play in protecting Australia’s most vulnerable, then it’s time for salary sacrificing to get a much-needed update. Bringing the system into the modern age, with indexed caps and refreshed benefits, could once again make NFPs competitive with the commercial sector.

NFPs shouldn’t be left relying on outdated tools from a bygone era. It’s time to swap the retro for relevant, ensuring that these organisations can thrive and continue their vital work in today’s challenging economic landscape.

About Brendan Lucas Brendan founded Next Dimension Accounting (NDA), an outsourced accounting company, in 2021, building on his experience with a top-tier accounting firm. Focused on supporting NFPs and charities, NDA has successfully grown to become one of Australia’s leading outsourced accounting companies focused on the NFP sector.

In recent years, not-for-profit (NFP) organisations have begun adopting strategies previously favoured by small-to medium-sized businesses, including outsourced accounting services. This shift reflects a broader trend toward efficiency and flexibility, allowing NFPs to focus more on their core missions while benefiting from specialised financial expertise.

However, the decision to transition to outsourced accounting is multifaceted, requiring careful consideration of strategic, operational and stakeholder impacts. This white paper explores the advantages and potential challenges associated with this shift, focusing particularly on the implications for Australian-based NFPs.

As the philanthropic landscape evolves, Not-for-Profit (NFP) organisations are facing heightened scrutiny and rising expectations. The Productivity Commission’s report Future Foundations for Giving highlights that NFPs are subject to “new scrutiny because of changing community expectations and standards.”

In response to these pressures, many NFPs are rethinking how they operate, particularly when it comes to financial sustainability. The idea that NFPs should remain entirely distinct from business practices is outdated and increasingly unviable in today’s complex and competitive environment.

NFPs, like businesses, must think strategically to ensure their long-term success and resilience. This shift in mindset doesn’t undermine an organisation’s core values or mission; instead, it enhances its ability to serve communities and meet growing needs.

NFPs Can and Should Think Like Businesses

A persistent misconception is that NFPs must operate with a charitable mindset that is removed from the financial and operational strategies used by businesses. 

The Australian Charities and Not-for-profits Commission (ACNC) has recently directly addressed these misconceptions, encouraging NFPs to think strategically about their financial practices. The ACNC clarifies that:

• A charity can spend money on administration.
• A charity can make a surplus (profit).
• A charity can keep money in reserve.
• A charity can invest its funds.
• A charity can undertake commercial activities.

These facts underscore that, like businesses, NFPs need the flexibility to manage their funds, plan for future growth, and invest in their own infrastructure. By adopting practices such as building reserves, making smart investments, and creating diversified income streams through commercial activities, NFPs strengthen their financial resilience. This business-like approach is not only permissible but crucial for long-term sustainability.

The Influence of Uncharitable

This evolving perspective is reflected in the documentary Uncharitable, inspired by Dan Pallotta’s groundbreaking TED Talk, which challenges conventional ideas about nonprofit work. Pallotta argues that to enable NFPs to drive change truly, we must remove the outdated constraints placed on them. 

The Role of Business Practices in NFP Resilience

Incorporating business principles into the operation of NFPs does not detract from their core mission; instead, it bolsters their ability to deliver on that mission. By adopting a more business-like approach, NFPs can:

• Plan for Sustainability: Surplus funds should not be seen as a sign of greed but as an opportunity for growth. Building reserves allows NFPs to weather economic downturns, invest in new initiatives, and scale their services in response to rising demand.
• Invest in Infrastructure: Much like businesses, NFPs need to invest in infrastructure, technology, staff development, or operational improvements. These investments can lead to greater efficiency and long-term cost savings, ensuring more funds are directed toward the mission.
• Diversify Income Streams: NFPs can use business-like strategies to diversify revenue, reducing reliance on volatile donations and grants, whether through social enterprises or other entrepreneurial efforts.
• Drive Innovation: By adopting the risk-taking mindset often found in business, NFPs can innovate how they deliver services, engage with communities, and tackle complex social issues. This flexibility allows them to adapt to changing environments and seize new opportunities.

The Role of Accountants and Financial Expertise

Just as businesses rely on financial professionals to ensure their growth and stability, NFPs can benefit from the expertise of accountants and CFOs. Financial professionals provide critical insights that empower NFPs to adopt business-like strategies while maintaining compliance with regulations and ethical standards. 

As NFPs face increasing scrutiny and rising expectations, adopting business principles is no longer an option—it’s a necessity for future resilience. 

Our team works with clients to ensure NFP and charities are fit for purpose, now and in the future. Contact us to find out more.

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