Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

2010-2011-2012

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

Treasury legislation amendment (unclaimed money and other measures) bill 2012

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

Amendments to be Moved on Behalf of the Government

 

(Circulated by the authority of the

Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

 





The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

ADI

Authorised Deposit-taking Institution

ASIC

Australian Securities and Investments Commission

ATO

Australian Taxation Office

FHSA

First Home Saver Account



Outline

The amendments amend the Treasury Legislation Amendment (Unclaimed Money and Other Measurers) Bill 2012 (the Bill) which was introduced to the Parliament on 30 October 2012. 

The amendments amend the commencement dates for Schedules 1 to 4 and provide for greater flexibility in setting the minimum unclaimed bank amount that must be reported and transferred to the Australian Securities and Investments Commission (ASIC).  The amendments also replace the transitional section in Schedule 1 and insert a transitional section into Schedules 2 to 4.  The revised transitional provisions are intended to provide more time for authorised deposit-taking institutions (ADIs), First Home Saver Account (FHSA) providers and life insurers to implement the changes, and provide more time for superannuation funds to transfer lost super accounts to the Australian Taxation Office (ATO). 

Date of effect :  Item 8 of Schedule 1, item 6 of Schedule 2, item 4 of Schedule 3, and items 1 to 4, 7 and 8 of Schedule 4 commence on the day after Royal Assent.  Items 1 to 7 of Schedule 1, items 1 to 5 of Schedule 2, and items 1 to 3 of Schedule 3 commence on 1 July 2013.  Items 5 and 6 of Schedule 4 commence on 30 December 2012.     

Proposal announced The measures were announced in the 2012-13 Mid-Year Economic and Fiscal Outlook

Financial impact :  The amendments have no financial impact. 

Human rights implications :  The amendments do not raise any human rights issues. 

Compliance cost impact Low

Summary of regulation impact statement

Regulation impact on business

Impact Low

Main points : Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required. 



Chapter 1                       

Explanation of Amendments

Item 1 — Commencement Dates

Outline of Item

1.1                   Item 1 amends the commencement dates for Schedule 1 to 4 of the Bill. 

Context of amendments

1.2                   In section 2 of the Bill, Schedules 1 to 4 are set to commence on the day after receiving Royal Assent.  This means ADIs, insurers and superannuation funds need to apply to the changes on the day after Royal Assent. 

1.3                   The amendments amend the commencement dates:

(i)      item 8 of Schedule 1, item 6 of Schedule 2, item 4 of Schedule 3, and items 1 to 4, 7 and 8 of Schedule 4 commence on the day after Royal Assent;

(ii)    items 1 to 7 of Schedule 1, items 1 to 5 of Schedule 2, and items 1 to 3 of Schedule 3 commence on 1 July 2013; and

(iii)  items 5 and 6 of Schedule 4 commence on 30 December 2012. 

1.4                   The amendments will provide more time to ADIs, FHSAs providers, life insurers and superannuation funds to implement the changes.  This will address the concerns raised by the banking and superannuation industries on the tight timeframe to implement the changes. 

Summary of the Item

1.5                   The item amends the commencement dates for Schedule 1 to 4 of the Bill. 

Comparison of key features of the item and current Bill

New Item

Current Bill

•                Item 8 of Schedule 1, item 6 of Schedule 2, item 4 of Schedule 3, and items 1 to 4, 7 and 8 of Schedule 4 commence on the day after Royal Assent. 

•                Items 1 to 7 of Schedule 1, items 1 to 5 of Schedule 2, and items 1 to 3 of Schedule 3 commence on 1 July 2013.

•                Items 5 and 6 of Schedule 4 commence on 30 December 2012.

Schedule 1, 2, 3 and 4 commence on the day after the Act receives the Royal Assent. 



 

Item 2 — Assessment Date

Outline of Item

1.6                   Item 2 clarifies a date for assessment of unclaimed moneys for ADIs, which is as at end of each year, that is 31 December. 

Context of amendments

1.7                   The Bill and the current Banking Act 1959 (Banking Act) do not provide a clear assessment date for ADIs to assess unclaimed moneys. 

1.8                   Subsection 69(3) of the Banking Act states that an ADI shall deliver a statement of unclaimed moneys within three months after the 31 December in each year, but does not specify an assessment date for ADIs to assess unclaimed moneys as at that date.  In practice, many ADIs have interpreted this requirement as containing an implied assessment date of 31 December but have sought clarification that this interpretation is correct.

1.9                   Item 2 will specify the assessment date, which is at end of the year, in subsection 69(3).  That means all ADIs will be required to assess the unclaimed moneys as at end of 31 December each year. 

1.10               This amendment will provide clarity to ADIs for assessing unclaimed moneys and consistency throughout the Bill. 

Summary of the Item

1.11               The item specifies a date for assessing unclaimed moneys. 

Comparison of key features of the item and current Bill and Law

New Item

Current Bill and law

Specifies ‘as at end of the year’ (that is, 31 December each year) as assessment date for unclaimed moneys.

Do not specify a date for assessing unclaimed moneys.

Item 3 — Minimum Amount

Outline of Item

1.12               Item 3 amends the minimum unclaimed money amount that is required to be reported and transferred to ASIC from $100 or a higher prescribed amount to be $100 or such other amount as may be prescribed. 

Context of amendments

1.13               Under the current provision, unclaimed moneys which are not less than $100 or a higher prescribed amount are required to be reported and transferred.  Consequently, regulations may only prescribe an amount higher than $100.  The current prescribed amount is $500, which was set by the Banking (Unclaimed Moneys) Regulations 1993

1.14               There is no minimum for other types of unclaimed moneys.  Further, the current threshold means that the details of smaller accounts are never published in accordance with subsection 69(9) and so cannot be found by their rightful owners via a search using the facility on the ASIC website.

1.15               Item 3 will amend subsection 69(3) to allow the threshold to be set through regulation, either higher than $100 or lower than $100. 

Summary of the Item

1.16               The item provides flexibility to vary the minimum threshold for unclaimed moneys to be transferred to ASIC to be an amount that is either higher or lower than $100. 

Comparison of key features of the item and current law

New Item

Current law

Allows setting a minimum threshold for unclaimed moneys to be transferred to ASIC at any amount. 

Allows setting a minimum threshold of $100 or a prescribed higher amount to be transferred to ASIC.

Item 4 Transitional — supplementary statement and payment obligations

Outline of Item

1.17               Item 4 substitutes the transitional section in Schedule 1 in the Bill with a new transitional arrangement. 

Context of amendments

1.18               The original transitional section, that is item 8 of Schedule 1, effectively provides an additional month for ADIs to transfer unclaimed moneys to ASIC, from 31 March 2013 to 30 April 2013. 

1.19               The new transitional arrangement provides ADIs more time and flexibility to assess and transfer unclaimed moneys to ASIC in accordance with the period change. 

Comparison of key features of the item and current Bill

New Item

Current Bill

ADIs are required to make a supplementary assessment and payment by 31 May 2013 in addition to the seven year assessment and payment currently required by 31 March 2013. 

The default assessment date f or supplementary payment is 30 May 2013.  However, ADIs could pick any date as their assessment date, between 31 December 2012 and 29 May 2013. 

ADIs do not need to assess the seven-year unclaimed amount again in the supplementary assessment as they already did so in the original assessment.  This means that the supplementary assessment does not need to include the seven-year unclaimed amount to avoid double counting. 

Extends the unclaimed moneys payment date from 31 March 2013 to 30 April 2013 for the three year assessment. 

Detailed explanation of the item

1.20               The item requires ADIs to make a supplementary assessment and transfer of accounts to ASIC.  ADIs will assess unclaimed moneys as at 31 December 2012 in line with the original seven-year period; then in early 2013, ADIs will have a supplementary assessment and payment in line with the revised three-year period. 

1.21               Under the new item, the default assessment day for the supplementary statement and payment obligations will be 30 May 2013.  However, it also provides flexibility to ADIs to nominate an alternative assessment date between 31 December 2012 and 29 May 2013.  This is intended to provide flexibility for ADIs to nominate the assessment date that is most appropriate for their particular systems.  ADIs will be required to provide the supplementary statement and payment on or before 31 May 2013. 

1.22               For the supplementary assessment, ADIs do not need to count the unclaimed seven-year moneys so as to avoid double counting of accounts caught by the standard statement and payment on or before 31 March 2013. 

Example 1.1  

XYZ bank has assessed its unclaimed moneys as at 31 December 2012 for the original assessment (seven-year inactive period) and will transfer the moneys to ASIC by 31 March 2013.  The bank then needs to assess its unclaimed moneys again for supplementary assessment, reporting and transfer.  If it does not nominate an alternative assessment date, it should do the supplementary assessment based on the three-year definition of unclaimed moneys as at 30 May 2013.  It must then provide a supplementary statement and payment on or before 31 May 2013

Example 1.2  

If the bank nominates 31 December 2012 as its assessment date, it must still complete its reporting and payment obligations based on the seven-year definition by 31 March 2013.  However, it may use 31 December 2012 as the date at which to assess unclaimed moneys using the three-year definition for the supplementary statement and payment that is due by 31 May 2013.  It is not required to double count accounts in the two statements and payments. 

Example 1.3  

The XYZ bank could make a single payment to support the two statements instead of making a separate supplementary payment.  The bank has to nominate 31  December 2012 as its assessment date for supplementary payment and assess the moneys in line with the three-year period which includes the seven-year unclaimed moneys and transfer the moneys to ASIC by 31 March 2013.      



 

Item 5 Transitional — supplementary statement and payment obligations

Outline of Item

1.23               Item 5 inserts a transitional section into Schedule 2 of the Bill. 

Context of amendments

1.24               The Bill does not provide a transition for FHSAs providers to assess and transfer unclaimed moneys to ASIC. 

1.25               The inserted transitional arrangement provides FHSAs providers more time and flexibility to assess unclaimed moneys and transfer to ASIC in accordance with the period change. 

Comparison of key features of the item and current Bill

New Item

Current Bill

FHSAs providers are required to make a supplementary assessment and payment by 31 May 2013 in addition to the seven year assessment and payment currently required by 31 March 2013.

The default assessment date is 30 May 2013for the supplementary payment.  However, providers could pick any date as their assessment date, between 31 December 2012 and 29 May 2013. 

Providers do not need to assess the seven-year unclaimed amount again in the supplementary assessment as they already did so in the original assessment.  This means that the supplementary assessment does not need to include the seven-year unclaimed amount to avoid double counting. 

Does not provide a transitional period for FHSAs providers. 

Detailed explanation of the item

1.26               The item requires FHSAs providers to make a supplementary assessment and payment.  Providers will assess unclaimed moneys as at 31 December 2012 in line with the original seven-year period; then in early 2013, providers will have a supplementary assessment and payment in line with the revised three-year period. 

1.27               Under the item, providers are allowed to choose an assessment date for the supplementary assessment and payment; however, they must supply the supplementary statement and make the supplementary payment by 31 May 2013. 

1.28               For the supplementary assessment, providers should not count the unclaimed seven-year moneys so as to avoid double counting.

Example 1.4  

Please refer to Example 1.1 to 1.3.  Similar scenarios apply to FHSA providers.       



 

Item 6 Transitional — supplementary statement and payment obligations

Outline of Item

1.29               Item 6 inserts a transitional section into Schedule 3 of the Bill. 

Context of amendments

1.30               The Bill does not provide a transition for life insurers to assess and transfer unclaimed moneys to ASIC. 

1.31               The inserted transitional arrangement provides life insurers more time and flexibility to assess unclaimed moneys and transfer to ASIC in accordance with the period change. 

Comparison of key features of the item and current Bill

New Item

Current Bill

Life insurers are required to make a supplementary assessment and payment by 31 May 2013 in addition to the seven year assessment and payment currently required by 31 March 2013. 

The default assessment date is 30 May 2013 for the supplementary payment.  However, life insurers could pick any date as their assessment date, between 31 December 2012 and 29 May 2013.

Life insurers do not need to assess the seven-year unclaimed amount again in the supplementary assessment as they already did so in the original assessment.  This means that the supplementary assessment does not need to include the seven-year unclaimed amount to avoid double counting. 

Does not provide a transitional period for life insurers. 

Detailed explanation of the item

1.32               The item requires life insurers to make a supplementary assessment and payment.  Insurers will assess unclaimed moneys as at 31 December 2012 in line with the original seven-year period; then in early 2013, insurers will have a supplementary assessment and payment in line with the revised three-year period. 

1.33               Under the item, insurers are allowed to choose an assessment date for the supplementary assessment and payment; however, they must make the supplementary payment by 31 May 2013. 

1.34               For the supplementary assessment, insurers should not double count the unclaimed seven-year moneys. 

Example 1.5  

Please refer to Example 1.1 to 1.3.  The similar scenarios apply to life insurers.



 

Item 7 — Transitional — scheduled statement day

Outline of Item

1.1                   Item 7 amends the Superannuation (Unclaimed Money and Lost Members Act 1999 (SUMLM Act) to apply a transitional scheduled statement day of 31 May 2013 for the 31 December 2012 unclaimed money day.

Context of amendment

1.2                   Superannuation providers are required to pay certain lost member accounts as at the end of an unclaimed money day to the Commissioner of Taxation (Commissioner) by the end of the scheduled statement day.  The account holder must still be a lost member immediately before the payment is made.

1.3                   The Commissioner may specify dates for unclaimed money statements and payment, by legislative instrument under section 15A of the SUMLM Act.

1.4                   The current instrument specifies that for the 31 December unclaimed money day the scheduled statement day is 30 April of the following year. 

1.5                   Under the new arrangements in the Treasury Legislation Amendment (Unclaimed Money and Other Measures Bill) 2012 small lost accounts with balances of less than $2,000 and accounts of unidentifiable members that have been inactive for 12 months will be required to be paid to the Commissioner.  These arrangements will apply from the 31 December 2012 unclaimed money day.

Summary of the Item

1.6                   The item extends the date the payment is due for certain lost member accounts, for the 31 December 2012 unclaimed money day from the 30 April 2013 to 31 May 2013.  This will provide more time for superannuation providers to implement the new arrangements for lost member accounts, including additional time to locate lost members.

Comparison of key features of the item and current law

New Item

Current law

Superannuation providers are required to pay the balances of certain lost member accounts to the Commissioner by 31 May 2013 for the 31 December 2012 unclaimed money day.  This is a one-off change.

The current legislative instrument specifies a due date for payment of certain lost member accounts of 30 April in the following year for the 31 December unclaimed money day.

 



Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

These amendments will enhance the current strategies employed by ASIC and the ATO to reunite people with their unclaimed moneys. 

Human rights implications

The Bill does not engage any of the applicable rights or freedoms.

Conclusion

This Schedule is compatible with human rights as it does not raise any human rights issue.

The Hon. Mr Wayne Swan, Deputy Prime Minister and Treasurer