Easing the load for volunteers

The Government is considering tax rebates for people who donate their time to charities.

The proposal is included in a document which focuses on how tax incentives could be used to increase donations to charities and non-profit organisations.

At present people who donate money can claim a rebate, but there is no recognition for people who donate time. In some instances people pay their own petrol costs while volunteering, as well as giving up their time.

Revenue Minister Peter Dunne yesterday said the rebate for volunteers was "new territory".

"This is not about paying volunteers - we don't want to compromise the spirit of volunteerism," Mr Dunne said. "But it's looking at, is this a way in which we can acknowledge the contribution that they make through their time, to provide voluntary service?"

The discussion document suggests the rebate could be based on an hourly rate, such as $5, although it would not try to recompense all the time volunteers gave.

Volunteers would need to have donated their time to a charity registered with the Charities Commission and provide evidence of the hours they gave.

The number of hours for which the rebate could be claimed would be capped, perhaps at 52 hours a year.

While it was difficult to estimate, based on an hourly rate of $5 and a cap of 52 hours the idea could cost about $37 million a year.

Mr Dunne said the rebate proposal was at an initial stage, and he wanted to test reaction before making any decisions about details.

Asked if it would add to charities' compliance costs because of the need to provide evidence of a volunteer's hours, Mr Dunne said the effect should be "simple".

"Instead of issuing a receipt for so many dollars, it would be a statement that so many hours were volunteered," he said. "So there would be an additional cost there, but frankly it's the same cost the organisation would have to bear if it received additional donors."

Reaction to the proposal was positive, although the idea may not be favoured any more than other options in the document.

They included raising the rebate cap on how much individuals could claim from monetary donations, and raising the rate of the rebate from the current 33.3 per cent.

Presbyterian Support Services national executive manager Jo Lake said her organisation favoured a range of incentives. The volunteer rebate was "not a bad idea" but it should not be to the exclusion of the other ideas in the document.

As for compliance costs, Ms Lake said her organisation already kept some records of what its 1700 to 2000 volunteers did, and did not expect there would be too much impact.

The document will be discussed at public meetings in five cities, starting in Wellington on October 31 and ending in Auckland on November 15.

Mr Dunne said he would like changes to be included in a tax bill in the middle of next year.