Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
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)
Table of Contents
Glossary ....................................................................................... 1
General outline and financial impact ....................................................... 3
Chapter 1 Explanation of Amendments .......................................... 5
Chapter 2 Statement of Compatibility with Human Rights ............ 19
Glossary
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
1
General outline and financial impact
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.
3
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.
5
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
Comparison of key features of the item and current Bill
New Item Current Bill
� Item 8 of Schedule 1, item 6 of Schedule 1, 2, 3 and 4 commence on
Schedule 2, item 4 of Schedule the day after the Act receives the
3, and items 1 to 4, 7 and 8 of Royal Assent.
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.
6
Chapter 1 - Explanation of Amendments
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 Do not specify a date for assessing
is, 31 December each year) as unclaimed moneys.
assessment date for unclaimed
moneys.
7
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
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 Allows setting a minimum threshold
for unclaimed moneys to be of $100 or a prescribed higher
transferred to ASIC at any amount. amount to be transferred to ASIC.
8
Chapter 1 - Explanation of Amendments
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 Extends the unclaimed moneys
supplementary assessment and payment date from 31 March 2013 to
payment by 31 May 2013 in addition 30 April 2013 for the three year
to the seven year assessment and assessment.
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.
9
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
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.
10
Chapter 1 - Explanation of Amendments
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.
11
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
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 Does not provide a transitional period
make a supplementary assessment for FHSAs providers.
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.
12
Chapter 1 - Explanation of Amendments
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.
13
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
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 Does not provide a transitional period
supplementary assessment and for life insurers.
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.
14
Chapter 1 - Explanation of Amendments
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.
15
Treasury Legislation Amendment (Unclaimed money and other measures) Bill 2012
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.
16
Chapter 1 - Explanation of Amendments
Comparison of key features of the item and current law
New Item Current law
Superannuation providers are The current legislative instrument
required to pay the balances of certain specifies a due date for payment of
lost member accounts to the certain lost member accounts of
Commissioner by 31 May 2013 for 30 April in the following year for the
the 31 December 2012 unclaimed 31 December unclaimed money day.
money day. This is a one-off change.
17
Chapter 2
Statement of Compatibility with Human
Rights
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
19
Index]
[Search]
[Download]
[Bill]
[Help]