The Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012 has been passed by the House of Representatives, with amendments relating to transitional procedures.
The Government has also announced details of new Regulations.
The Bill will now be sent to the Senate for passage this week. UPDATE: Passed by Senate on 29 November 2012.
UPDATE 6 December: Royal Assent given on 4 December 2012. Download the Act as passed.
The Bill will bring forward the time at which money is recognised under the relevant law as lost or unclaimed.
Amounts held by ADIs will become unclaimed moneys three years after the last deposit or withdrawal (other than fees or interest), instead of seven years. Amounts held by FHSA providers become unclaimed moneys three years after the last contribution or withdrawal (other than fees, taxes or interest). Amounts held by insurers will become unclaimed moneys three years after the policy matures, instead of seven years. Superannuation funds will transfer funds of unidentifiable members after 12 months instead of five years.
The amendments will provide more time to ADIs, FHSAs providers, life insurers and superannuation funds to implement the changes. They will now have until 31 May 2013 to report on and transfer lost accounts and other lost moneys to Australian Securities and Investments Commission or the ATO as appropriate.
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 for 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.
The amendments include:
- The date for assessment of unclaimed moneys for ADIs has been set as 31 December each year.
- the minimum unclaimed money amount that is required to be reported and transferred to ASIC will be $100 or such other amount as may be prescribed
To avoid capturing accounts unintentionally, the Government will introduce regulations so that children’s accounts will still need to be inactive for seven years before being treated as lost. In addition, regulations will specify that First Home Saver Accounts will be excluded until the requirement to make a deposit in four years has been met.
The regulations will also clarify that term deposits remain excluded and sub-accounts will continue to be treated as part of a parent account when determining whether there has been activity on an account in the last three years. Linked accounts (that is, an account that a customer must hold as a condition of holding another account with the same bank, building society or credit union) and mortgage offset accounts will be treated similarly.
The regulations will also clarify that accounts that are frozen by a court order or other legal requirement will also be excluded while they remain frozen and that the three year inactivity period will restart when the freeze is lifted.
The regulations will also clarify that superannuation accounts that have been active in the last 12 months, but where the member is uncontactable, will not be transferred to the ATO.
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Posted 28th November 2012
by David Jacobson
in Corporations Act, Financial Services, Insurance, Superannuation