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First Home Saver Accounts Bill 2008

Part 3 Eligibility, contribution and payment rules

Division 1 Eligibility rules

19   Obligation of FHSA provider in opening or issuing FHSA

             (1)  An FHSA provider must not open or issue an FHSA for a person unless:

                     (a)  the person has given the provider an application in the approved form; and

                     (b)  the application states that:

                              (i)  the person meets the FHSA eligibility requirements; and

                             (ii)  if the person already holds an FHSA—the person will ensure that the balance of the FHSA will be transferred to the FHSA to be opened or issued; and

                            (iii)  if the person held an FHSA that was closed, and nevertheless meets the FHSA eligibility requirements because of paragraph 15(2)(b)—the initial contribution to the FHSA to be opened or issued will be made in accordance with paragraph 17(3)(b); and

                     (c)  the person has quoted his or her tax file number to the provider in connection with the operation of this Act and the Superannuation Acts.

Note:          Making a false statement in the application may constitute an offence: see subsection 8J(9) and sections 8K and 8N of the Taxation Administration Act 1953 .

Offence

             (2)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (3)  A contravention of subsection (1) does not affect the validity of a transaction.

20   FHSA holder must notify provider if he or she does not satisfy the FHSA eligibility requirements

             (1)  The holder of an FHSA must give the FHSA provider a notice in the approved form in accordance with this section if circumstances arise resulting in the FHSA holder not satisfying the FHSA eligibility requirements.

Note:          Section 286-75 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for a breach of this subsection. A breach of this subsection may also be an offence under section 8C of that Act.

             (2)  The FHSA holder must give the notice within 30 days after the circumstances arise.

             (3)  However, the FHSA holder need not give the notice if:

                     (a)  the FHSA is closed within 30 days after the circumstances arise; or

                     (b)  the FHSA provider must pay an amount from the FHSA under section 32 (FHSA home acquisition payment) because the FHSA holder requests the FHSA provider within 30 days after the circumstances arise to do so.

             (4)  The notice must contain:

                     (a)  if the FHSA holder is aged 60 or over and wants the balance of the FHSA paid to him or her—a statement to that effect; or

                     (b)  otherwise—an authority for the FHSA provider to contribute the balance of the FHSA to a superannuation interest of the FHSA holder in a complying superannuation plan.

             (5)  The FHSA holder may give the FHSA provider a written revocation of the notice if:

                     (a)  the FHSA holder becomes satisfied that he or she satisfies the FHSA eligibility requirements; and

                     (b)  30 days have not yet elapsed since the FHSA holder gave the FHSA provider the notice; and

                     (c)  the FHSA has not yet been closed in accordance with paragraph 22(2)(b).

21   Commissioner must notify provider if reason to believe that certain circumstances exist

             (1)  The Commissioner must give the provider of an FHSA a notice in accordance with this section if the Commissioner has reason to believe that the FHSA holder does not satisfy the FHSA eligibility requirements.

Note:          The Commissioner may give the provider a notice under subsection 67(2) if a correct TFN was not quoted for the FHSA holder.

             (2)  If the Commissioner gives a notice under subsection (1), the Commissioner must give a copy of the notice to the FHSA holder.

             (3)  The notice must describe the operation of the following provisions that results from the notice being given:

                     (a)  section 22 (requirement to close inactive FHSA);

                     (b)  section 26 (limit on contributions to inactive FHSA);

                     (c)  sections 32 and 35 (limit on payments from FHSA).

             (4)  The Commissioner must give the FHSA provider a written revocation of the notice if:

                     (a)  the Commissioner becomes satisfied that the FHSA holder satisfies the FHSA eligibility requirements; and

                     (b)  30 days have not yet elapsed since the Commissioner gave the FHSA provider the notice; and

                     (c)  the FHSA has not yet been closed in accordance with paragraph 22(2)(b).

             (5)  If the Commissioner gives a revocation under subsection (4), the Commissioner must give a copy of it to the FHSA holder.

22   FHSA provider to close inactive FHSA

             (1)  This section applies if:

                     (a)  an FHSA becomes inactive under subsection 23(1), and the FHSA provider has not received a revocation of the notice mentioned in that subsection before the 30th day (the trigger day ) after the FHSA provider received the notice; or

                     (b)  an FHSA becomes inactive under subsection 23(2), (3) or (4) on a particular day (also the trigger day ).

             (2)  The FHSA provider must, within 14 days after the trigger day:

                     (a)  pay the entire balance of the FHSA to:

                              (i)  if the FHSA holder is aged 60 or over and has given the FHSA provider a statement that he or she wants the balance of the FHSA to be paid to him or her—the FHSA holder; or

                             (ii)  otherwise—the superannuation interest mentioned in subsection (3); and

                     (b)  close the FHSA.

Note:          If the FHSA holder becomes bankrupt, this section does not prevent a payment from the FHSA that is property divisible amongst the holder’s creditors (see section 128).

             (3)  The superannuation interest is:

                     (a)  if, for the purposes this paragraph, the FHSA holder has notified the FHSA provider in writing of a particular superannuation interest of the holder in a complying superannuation plan—that superannuation interest; or

                     (b)  otherwise—to a superannuation interest for the benefit of the FHSA holder in the FHSA provider’s default superannuation plan (see section 24).

Offence

             (4)  A person commits an offence if the person contravenes subsection (2).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (5)  A contravention of subsection (2) does not affect the validity of a transaction.

23   Inactive FHSA

             (1)  An FHSA is inactive if the provider of the FHSA:

                     (a)  has received a notice from the FHSA holder in accordance with subsection 20(1) (and has not received a revocation of that notice under subsection 20(5)); or

                     (b)  has received a notice from the Commissioner in accordance with subsection 21(1) (and has not received a revocation of that notice under subsection 21(4)); or

                     (c)  has received a notice from the Commissioner in accordance with subsection 67(2) (and has not received a revocation of that notice).

             (2)  An FHSA is also inactive if:

                     (a)  the provider of the FHSA makes a payment from the FHSA; and

                     (b)  the provider must make the payment under:

                              (i)  section 32 (FHSA home acquisition payment); or

                             (ii)  section 33 (FHSA holder aged 60 or over); and

                     (c)  the balance of the FHSA immediately after the payment is more than nil.

             (3)  An FHSA is also inactive if the holder of the FHSA is 65 years of age or over.

             (4)  An FHSA is also inactive if:

                     (a)  the FHSA was opened or issued for a person because he or she made a statement in an application, in accordance with subparagraph 19(1)(b)(ii), that he or she would ensure that the balance of another FHSA held by him or her would be transferred to the FHSA; and

                     (b)  a period of 44 days has elapsed since the FHSA was opened or issued; and

                     (c)  the transfer did not take place within that period.

24   Default superannuation plan

             (1)  An entity that provides an FHSA or offers to provide an FHSA at a time must have nominated in writing, before that time, a complying superannuation plan to be its default superannuation plan for the purposes of paragraph 22(3)(b).

Offence

             (2)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.



 

Division 2 Contributions to FHSAs

25   Limit on contributions to FHSAs—account holder aged 65 or over

             (1)  The provider of an FHSA must not allow an amount to be contributed to the FHSA if the holder of the account is aged 65 or older.

Note:          In these circumstances the Commissioner may be able to pay a Government FHSA contribution directly to the FHSA holder (see section 41).

             (2)  The FHSA provider does not contravene subsection (1) if the provider repays the amount from the FHSA to the FHSA holder within 30 days after receiving it.

Offence

             (3)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (1) does not affect the validity of a transaction.

26   Limit on contributions to FHSAs—inactive FHSA

             (1)  The provider of an FHSA must not allow an amount to be contributed to the FHSA if it is inactive.

             (2)  The FHSA provider does not contravene subsection (1) if the provider repays the amount from the FHSA to the FHSA holder within 30 days after receiving it.

Offence

             (3)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (1) does not affect the validity of a transaction.

27   Limit on contributions to FHSAs—holder in breach of account balance cap

             (1)  The provider of an FHSA must not allow an amount to be contributed to the FHSA at a time if:

                     (a)  either:

                              (i)  the FHSA holder is in breach of the account balance cap at the time the amount is to be paid; or

                             (ii)  the FHSA holder would be in breach of the account balance cap at that time if the amount were paid; and

                     (b)  the contribution would not be:

                              (i)  a Government FHSA contribution; or

                             (ii)  a contribution mentioned in paragraph 11(3)(a) (transfer to the FHSA from another FHSA held by the FHSA holder); or

                            (iii)  a contribution mentioned in paragraph 11(3)(c) (recontribution of FHSA home acquisition payment after failure to occupy a dwelling).

Note:          This subsection does not prevent the FHSA provider from allowing part of a sum paid to it to be contributed to the FHSA.

             (2)  The FHSA provider does not contravene subsection (1) if the provider repays the amount from the FHSA to the FHSA holder within 30 days after receiving it.

Offence

             (3)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (1) does not affect the validity of a transaction.

28   Breach of account balance cap

             (1)  If the balance of an FHSA at a time exceeds the account balance cap for the financial year in which that time occurs, the person who holds the FHSA is in breach of the account balance cap:

                     (a)  at that time; and

                     (b)  at all later times (subject to this section).

Note:          The FHSA holder is in breach of the account balance cap at a later time even if the balance of his or her FHSA falls short of the account balance cap for the financial year in which that later time occurs.

             (2)  However, the person is not in breach of the account balance cap during the period mentioned in subsection (3) if:

                     (a)  the person applies to open or be issued with an FHSA; and

                     (b)  the initial contribution to the FHSA to be opened or issued will be made in accordance with paragraph 17(3)(b) (recontribution of FHSA home acquisition payment after failure to occupy a dwelling).

             (3)  The period:

                     (a)  starts when the FHSA mentioned in paragraph (2)(a) is opened or issued; and

                     (b)  ends at the first time when the balance of that FHSA (or any other FHSA later held by the person) exceeds the account balance cap for the financial year in which that time occurs.

             (4)  The person is also not in breach of the account balance cap during the period mentioned in subsection (5) if:

                     (a)  a payment of a kind mentioned in paragraph 31(1)(c) (payments because of a family law obligation) is made from an FHSA held by the person; and

                     (b)  the balance of that FHSA immediately after the payment is less than the account balance cap for the financial year in which the payment is made.

             (5)  The period:

                     (a)  starts when the payment is made; and

                     (b)  ends at the first time when the balance of that FHSA (or any other FHSA later held by the person) exceeds the account balance cap for the financial year in which that time occurs.

29   Account balance cap

                   The account balance cap for the 2008-09 financial year is $75,000. This amount is indexed annually.

Note:          Section 30 shows how to index this cap. However, the cap only moves by increments of $5,000.

30   Indexation of account balance cap

             (1)  The amount of the account balance cap is indexed annually by:

                     (a)  multiplying the amount for the 2008-09 financial year by its indexation factor; and

                     (b)  rounding the result in paragraph (a) down to the nearest multiple of $5,000.

             (2)  The account balance cap is not indexed if its indexation factor is 1 or less.

             (3)  The indexation factor is:

             (4)  The indexation factor mentioned in subsection (3) is calculated to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

             (5)  The index number for a quarter is the estimate of full-time adult average weekly ordinary time earnings for the middle month of the quarter first published by the Australian Statistician for that month.



 

Division 3 Restrictions on payments from FHSAs

31   FHSA provider must not make payment from FHSA unless authorised by law etc.

             (1)  The provider of an FHSA must not make a payment from the FHSA unless:

                     (a)  the provider must make the payment under:

                              (i)  section 32 (FHSA home acquisition payment); or

                             (ii)  section 33 (FHSA holder aged 60 or over); or

                     (b)  the provider must make the payment under:

                              (i)  subsection 22(2) (compulsory contribution of balance of inactive FHSA to superannuation etc.); or

                             (ii)  section 34 (voluntary contribution of balance of FHSA to superannuation); or

                            (iii)  section 35 (voluntary transfer of balance of FHSA to another FHSA); or

                     (c)  the payment is made because a family law obligation requires it to be made:

                              (i)  by way of a contribution to a superannuation interest of the FHSA holder’s spouse or former spouse in a complying superannuation plan; or

                             (ii)  by way of transfer to an FHSA held by the FHSA holder’s spouse or former spouse; or

                            (iii)  to the FHSA holder’s spouse or former spouse, if the spouse or former spouse is aged 60 or over; or

                     (d)  the payment is a repayment made in accordance with:

                              (i)  subsection 25(2), 26(2) or 27(2); or

                             (ii)  subsection 992A(4) (unsolicited offer of financial product), section 1016F (defective product disclosure document) or section 1019B (cooling-off period) of the Corporations Act 2001 ; or

                     (e)  the FHSA holder is deceased; or

                      (f)  the payment is of an amount of fees owing to the FHSA provider for providing the FHSA; or

                     (g)  the payment is of an amount owing to the Commonwealth in respect of overpayments of Government FHSA contributions.

Note:          If the FHSA holder becomes bankrupt, this section does not prevent a payment from the FHSA that is property divisible amongst the holder’s creditors (see section 128).

Offence

             (2)  A person commits an offence if the person contravenes subsection (1).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (3)  A contravention of subsection (1) does not affect the validity of a transaction.



 

Division 4 Requirements to make payments from FHSAs

32   Payment from FHSA for purposes of acquiring a home

             (1)  This section applies if:

                     (a)  the holder of an FHSA has given the FHSA provider an application in the approved form requesting an amount to be paid from the FHSA; and

                     (b)  the FHSA holder has declared in the application that the payment will satisfy the FHSA payment conditions mentioned in subsection 17(1); and

                     (c)  any of the following requirements are met:

                              (i)  personal FHSA contributions of at least $1,000 per financial year have been made for the FHSA holder in at least 4 financial years (one of which may be the financial year in which the payment is to be made);

                             (ii)  the FHSA holder is in breach of the account balance cap, and has held an FHSA in at least 4 financial years (one of which may be the financial year in which the payment is to be made);

                            (iii)  the FHSA holder has declared in the application that he or she will acquire a qualifying interest in a dwelling together with another FHSA holder in respect of whom the requirement in subparagraph (i) or (ii) is met; and

                     (d)  the provider is satisfied that the requirements (if any) specified in the regulations are met; and

                     (e)  the FHSA is not inactive.

             (2)  The FHSA provider must pay the amount as requested:

                     (a)  as soon as practicable after the application is made; and

                     (b)  no later than 30 days after the application is made.

Offence

             (3)  A person commits an offence if the person contravenes subsection (2).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (2) does not affect the validity of a transaction.

33   Payment from FHSA if FHSA holder aged 60 or over

             (1)  This section applies if:

                     (a)  the holder of an FHSA has given the FHSA provider an application in the approved form requesting an amount to be paid from the FHSA; and

                     (b)  the FHSA holder is aged 60 or over.

             (2)  The FHSA provider must pay the amount as requested:

                     (a)  as soon as practicable after the application is made; and

                     (b)  no later than 30 days after the application is made.

Offence

             (3)  A person commits an offence if the person contravenes subsection (2).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (2) does not affect the validity of a transaction.

34   Payment of FHSA balance as contribution to superannuation

             (1)  This section applies if:

                     (a)  an FHSA holder requests the FHSA provider to pay the balance of the FHSA by way of a contribution to a superannuation interest of the FHSA holder in a complying superannuation plan; and

                     (b)  the request is in the approved form.

             (2)  The FHSA provider must pay the amount as requested:

                     (a)  as soon as practicable after the application is made; and

                     (b)  no later than 30 days after the application is made.

Offence

             (3)  A person commits an offence if the person contravenes subsection (2).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (2) does not affect the validity of a transaction.

35   Payment of FHSA balance as transfer to another FHSA

             (1)  This section applies if:

                     (a)  an FHSA holder requests the FHSA provider to pay the balance of the FHSA by way of transfer to another FHSA held by the FHSA holder; and

                     (b)  the request is in the approved form; and

                     (c)  the FHSA is not inactive.

             (2)  The FHSA provider must pay the amount as requested:

                     (a)  as soon as practicable after the application is made; and

                     (b)  no later than 30 days after the application is made.

Note:          If the other FHSA is provided by another entity, the FHSA provider must give that entity a statement in accordance with section 391-10 in Schedule 1 to the Taxation Administration Act 1953 .

Offence

             (3)  A person commits an offence if the person contravenes subsection (2).

Penalty:  100 penalty units.

Validity of transaction not affected by contravention

             (4)  A contravention of subsection (2) does not affect the validity of a transaction.