Only schools that operate not-for-profit are eligible for recurrent government funding from the Australian and NSW governments.
Currently, the NSW Department of Education (DoE) Non-Government Schools Unit manages the payment of State Government funding to NSW non-government schools and regulates schools compliance with section 83C of the Education Act 1990 (NSW).
Section 83C of the Education Act 1990 (NSW) sets out requirements for non-government schools operating in NSW about what it means to operate for profit.
Section 83C specifies that a school operates for profit if the Minister is satisfied that;
a. any part of its proprietor’s assets (in so far as they relate to the school) or its proprietor’s income (in so far as it arises from the operation of the school) is used for any purpose other than for the operation of the school, or
b. any payment is made by the school to a related entity or other person or body—
- for property, goods, or services at more than reasonable market value, or
- for property, goods, or services that are not required for the operation of the school, or
- for property, goods, or services that are in any other way unreasonable in the circumstances having regard to the fact that financial assistance is provided to or for the benefit of the school by the Minister, or
c. any payment is made by the school to a person in connection with the person’s activities as a member of the governing body of the school unless it is in reimbursement for a payment made by the person in connection with the operation of the school.