Charities could close under US system

Using a US-style league system to regulate Australian charities will force some of them to disband, the welfare sector warned.

The federal government is considering replacing the Australian Charities and Not-for-profits Commission with an American-style online "charity navigator".

The web-based system would police charities and non-government firms based on unbiased private sector feedback, with charities required to meet a checklist of "quality-assurance" criteria.

Social Services Minister Kevin Andrews has flagged government plans to scrap the existing regulator in the next few months.

However, the Australian Council of Social Services (ACOSS) says there is no need to replace the commission, which was set up in response to a Productivity Commission recommendation in 2010.

"In the US the call is now to have a proper national regulator, which we already have," ACOSS chief executive Cassandra Goldie said in a statement on Thursday.

She warned any move to scrap the regulator would force the closure of several charities.

"A simple league rating system which fails to tell the full story could be the beginning of the end for many great Australian charities."

Mr Andrews labelled the claim as "nonsense".

"We're considering a range of options but it's nonsensical to suggest that would lead any charities to close," he said in a statement.