Payments to parents. Dennis Cribb - School Governance, MOE

Resource Documents:


Ministry Circular on payments by parents
    1. Go to MOE website
    2. Type "circular 2013/06" in search box
Inland revenue Public Ruling on Payments by parents - GST treatment


Problems

  • schools compelling parents to make payments for which there should be no compulsion
  • this is unlawful (as a 'fee')
  • one of the consequences - tax treatment is likely to be wrong
  • some parents are likely to be missing out on tax credits
Law Says
  • 5-19 year old students - free enrolment, and free education

Law Means

  • No payments are compulsory (with exception of attendance dues in integrated schools, and charges for voluntary purchase of goods and services - eg canteen)
  • parents can pay in full, in part, or not at all
  • school uniform??? Stationery??? If someone went to the high court to clarify - there is a risk that it could backfire as payment can't be compelled - depending on a judge, and their interpretation of section 3
  • donations - parents entitled to apply for a tax credit (at the discretion of the IRD)
  • donations / volutary contributions - no GST applied
  • regardless of level of GOVT funding - the school can ligitimately spend as much or more (doesn't mean we cannot explain why govt funding doesn't cover what we want to do in parent letter. "the government provides enough to... We want also to...)
  • cant break law by mutual agreement - eg community asks school to provide X - doesn't mean entitled to charge fee for this

Free Enrolment

no charge for administration, application, out of zone application, out of zone ballot

Free Education

  • Education = school's curriculum
  • more than just a series of subject areas
  • for a "thing" - expectation that all studenst take part (not extra-curricular, eg netball teams on a Saturday - can't use school resources and time if not part of school curriculum)
  • generally during school time
  • Compulsion vs Curriculum
  • cant charge for materials (like technology materials for letter box - unless the letterbox is taken home. Bu the child has to choose to take the letter box home (like canteen) - cannot require to take home)
  • Voluntary Contribution = donation means the same and can be interchangeable

Invoices

  • can't be invoiced in a way that they are appeared they are owed
  • not a debt
  • not recorded in accounting system as accounts receiveable
  • are a cash asset once they ave been paid
  • needs to be specified on invoice that payments are voluntary - short statement
Government Money - must be used for the purposes of the board

Fair wording

Can include name of school - as long as the money goes into their bank account, and not the school account.

There is advice on the MOE website around property, fundraising, grants

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