active build to rent development has the meaning given by subsection 43-151(2).

active build to rent development area has the meaning given by subsection 43-151(1).

active build to rent part has the meaning given by section 44-25.

affordable dwelling has the meaning given by subsection 43-153(2).

assessed build to rent development misuse tax means *build to rent development misuse tax, as assessed under Schedule 1 to the Taxation Administration Act 1953.

build to rent capital works deduction amount has the meaning given by section 44-25.

build to rent compliance period has the meaning given by subsection 43-152(5).

build to rent development has the meaning given by subsections 43-152(1), (2) and (3).

build to rent development misuse tax means tax imposed by the Capital Works (Build to Rent Misuse Tax) Act 2024.

build to rent misuse amount has the meaning given by section 44-20.

build to rent withholding amount has the meaning given by section 44-30.

cease to be an *active build to rent development has the meaning given by subsection 43-152(4).

commence to be an *active build to rent development has the meaning given by subsections 43-152(1) and (2).

common area , for *dwellings of an *active build to rent development, has the meaning given by subsection 43-151(3).

expand , in relation to an *active build to rent development, has the meaning given by subsection 43-152(3).

Taxation Administration Act 1953

13   Subsection 8AAB(4) (after table item 12)

Insert:

16   After paragraph 12-395(3)(ac) in Schedule 1

Insert:

(ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non-concessional MIT income only if subsection 12-450(5) were disregarded; and

17   After paragraph 12-395(6)(ac) in Schedule 1

Insert:

(ad) must specify the extent (if any) to which the payment is, or is attributable to, an amount that would be non-concessional MIT income only if subsection 12-450(5) were disregarded; and

18   At the end of section 12-450 in Schedule 1

Add:

Income from a build to rent development

(5) Subject to subsection (7), the amount is not MIT residential housing income of the *managed investment trust under subsection (2) to the extent any of the following paragraphs applies to the amount in relation to a *dwelling of an *active build to rent development:

(a) the amount is, or is referable to, a payment of rental income under a lease of the dwelling;

(b) the amount is, or is attributable to, a *capital gain from a *CGT event in relation to the dwelling;

(c) all of the following subparagraphs apply:

(i) the amount is, or is attributable to, a part of a capital gain from a CGT event in relation to a *membership interest in an entity;

(ii) just before the time of the CGT event, all or part of the *market value of the membership interest is referable to the dwelling;

(iii) subsection (6) applies to the part of the capital gain.

(6) This subsection applies to the part of a *capital gain mentioned in paragraph (5)(c) worked out as follows:

where:

value of the interest in the dwelling means so much of the value of the membership interest as is referable to the *dwelling.

value of the membership interest means the *market value of the *membership interest just before the time of the *CGT event.

(7) Subsection (5) does not apply to an amount if:

(a) the *build to rent compliance period for each of the *dwellings of the *active build to rent development has ended; and

(b) assuming that the build to rent compliance period for each of the dwellings had not ended, the active build to rent development would have *ceased to be an active build to rent development.

19   Subsection 16-150(1) in Schedule 1

After "Commissioner" (first occurring), insert ", other than an amount to which subsection (4) applies,".

20   At the end of section 16-150 in Schedule 1

Add:

(4) If:

(a) an entity must pay an amount (even if it is a nil amount) to the Commissioner under subsection 16-70(1) (about amounts withheld under Division 12); and

(b) subsection 12-450(5) (about income from a build to rent development) applies to the amount;

the entity must notify the Commissioner of the amount:

(c) on or before the day provided in a determination under subsection (5) of this section; or

(d) if there is no such determination - on or before the day on which the amount is due to be paid (regardless of whether it is paid).

The notification must be in the *approved form and lodged with the Commissioner.

(5) The Commissioner may, by legislative instrument, determine when the Commissioner must be notified for the purposes of paragraph (4)(c).

21   At the end of subsection 155-5(2) in Schedule 1

Add:

; (m) an amount of *build to rent development misuse tax.

22   At the end of subsection 155-30(3) in Schedule 1

Add:

; (e) the *build to rent development misuse tax payable by you for an income year.

23   Subsection 250-10(2) in Schedule 1 (after table item 37AC)

Insert:

24   After paragraph 357-55(1)(fe) in Schedule 1

Insert:

(ff) *build to rent development misuse tax;

25   Application of amendments

(1) The amendments of section 43-145 of the Income Tax Assessment Act 1997 made by this Schedule apply to capital works begun after 7:30 pm, by legal time in the Australian Capital Territory, on 9 May 2023.

(2) The amendment of section 12-450 in Schedule 1 to the Taxation Administration Act 1953 made by this Schedule applies to an amount:

(a) that is referable to a payment of rental income made on or after 1 July 2024; or

(b) that is, or is attributable, to a capital gain, or part of a capital gain, from a CGT event that happens on or after 1 July 2024.

Schedule 2   Buy now, pay later

Part 1   Extending the application of the National Consumer Credit Protection Act 2009

National Consumer Credit Protection Act 2009

1   Subsection 5(1)

Insert:

buy now pay later arrangement has the same meaning as in section 13D of the National Credit Code.

buy now pay later contract has the same meaning as in section 13D of the National Credit Code.

low cost credit contract has the same meaning as in section 13E of the National Credit Code.

2   Subsection 5(1) (paragraph (a) of the definition of short-term credit contract)

After "continuing credit contract", insert "or a low cost credit contract".

3   Subsection 5(1) (paragraph (a) of the definition of small amount credit contract)

After "continuing credit contract", insert "or a low cost credit contract".

4   Subsection 160G(2) (note)

Omit "sections 5 and 6", substitute "sections 5, 6, 13B and 13C".

5   After Part 1 of the National Credit Code

Insert:

Part 1A - Extending the application of this Code

13B Application of this Code to buy now pay later contracts

Application of this Code apart from this section

(1) This Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) if, apart from this section, the Code applies to the provision of credit under the buy now pay later contract (and to the buy now pay later contract and related matters).

Note: For when this Code applies in relation to a buy now pay later contract apart from this section, see sections 5, 6 and 13C. Section 13C deals with low cost credit contracts, including low cost credit contracts that are buy now pay later contracts.

Extending the application of this Code

(2) In addition, this Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) if:

(a) the credit provider, or the debtor, under the buy now pay later contractis a constitutional corporation; and

(b) this Code would, apart from this section, apply to the provision of credit under the buy now pay later contract (and to the buy now pay later contract and related matters) if the following were disregarded:

(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);

(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);

(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable).

(3) If this Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) under subsection (2), then:

(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and

(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.

13C Application of this Code to low cost credit contracts

Application of this Code apart from this section

(1) This Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if, apart from this section, the Code applies to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters).

Note: For when this Code applies in relation to a low cost credit contract apart from this section, see sections 5, 6 and 13B. Section 13B deals with buy now pay later contracts, including buy now pay later contracts that are low cost credit contracts.

Extending the application of this Code

(2) In addition, this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if:

(a) the credit provider, or the debtor, under the low cost credit contract is a constitutional corporation; and

(b) this Code would, apart from this section, apply to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters) if the following were disregarded:

(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);

(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);

(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable);

(iv) subsection 6(13) (which allows the regulations to exclude a provision of credit) and any exclusions made under that subsection;

(v) subsections 6(14) and (17) (which allow ASIC to exclude a provision of credit) and any exclusions made under those subsections.

(3) If this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) under subsection (2), then:

(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and

(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.

13D Meaning of buy now pay later arrangement and buy now pay later contract

Buy now pay later arrangement

(1) A buy now pay later arrangement is an arrangement or a series of arrangements:

(a) under which a person (the merchant ) supplies goods or services to a consumer (within the meaning of the National Credit Act); and

(b) under which a third person (the BNPL provider ) directly or indirectly pays the merchant an amount that is some or all of the price for the supply mentioned in paragraph (a); and

(c) that includes a contract between the BNPL provider and the consumer under which the BNPL provider provides credit to the consumer in connection with the supply mentioned in paragraph (a).

(2) However, an arrangement or a series of arrangements of the kind described in subsection (1) is not a buy now pay later arrangement if the arrangement or series of arrangements is of a kind prescribed by the regulations for the purposes of this subsection.

(3) For the purposes of subsection (1), and to avoid doubt:

(a) it does not matter whether any fees or charges are payable by the consumer or the merchant in connection with the arrangement or series of arrangements; and

(b) it does not matter whether the payment by the BNPL provider mentioned in paragraph (1)(b) occurs before, at or after the time when the goods or services are supplied by the merchant to the consumer as mentioned in paragraph (1)(a); and

(c) it does not matter whether the contract mentioned in paragraph (1)(c) is a continuing credit contract; and

(d) it is not necessary for the arrangement or series of arrangements to include any contract to which the merchant, the consumer and the BNPL provider are all parties.

Buy now pay later contract

(4) A contract is a buy now pay later contract if:

(a) it is part of a buy now pay later arrangement; and

(b) it is a contract of the kind mentioned in paragraph (1)(c).

13E Meaning of low cost credit contract

(1) A contract is a low cost credit contract if:

(a) credit is, or may be, provided under the contract; and

(b) the contract is:

(i) a buy now pay later contract; or

(ii) a contract prescribed by the regulations for the purposes of this subparagraph; and

(c) the period during which credit is, or may be, provided under the contract is no longer than the period (if any) prescribed by the regulations for the purposes of this paragraph; and

(d) the contract satisfies any requirements prescribed by the regulations for the purposes of this paragraph that relate to fees or charges that are, or may be, payable under the contract; and

(e) the contract satisfies any other requirements prescribed by the regulations for the purposes of this paragraph.

Fees and charges

(2) To avoid doubt, regulations made for the purposes of paragraph (1)(d) may prescribe that a specified fee or charge, or a fee or charge of a specified kind, must, or must not, be payable under the contract.

(3) For the purposes of this section, fees or charges:

(a) include a charge referred to in paragraph (a) of the definition of credit fees and charges in subsection 204(1); and

(b) do not include a fee, charge, duty or expense referred to in paragraph (b), (c) or (d) of that definition.

6   Subsection 204(1) of the National Credit Code

Insert:

buy now pay later arrangement : see section 13D.

buy now pay later contract : see section 13D.

low cost credit contract : see section 13E.

7   Subsection 204(1) of the National Credit Code (paragraph (a) of the definition of medium amount credit contract)

After "continuing credit contract", insert "or a low cost credit contract".

8   Application and transitional provisions

General rule

(1) Subject to this item, the amendments made by this Part apply:

(a) on and after the delayed commencement time (see subitem (5)); and

(b) in relation to contracts entered into before, on or after the commencement of this Part.

Early applications for licences etc.

(2) Despite subitem (1), the amendments made by this Part apply on and after the commencement of this Part for the purposes of:

(a) Divisions 2, 3, 4 and 6 of Part 2-2 of the Credit Act (which are about licensing of persons who engage in credit activities); and

(b) Part 2-3 of the Credit Act (which is about credit representatives).

Transitional arrangements

(3) Subitem (4) applies if:

(a) before the delayed commencement time, a person (the applicant ) lodges an application in the approved form for:

(i) a licence authorising the applicant to engage in a covered credit activity (see subitem (5)); or

(ii) ASIC to vary the conditions on the applicant's licence by authorising the applicant to engage in a covered credit activity; and

(b) immediately before the delayed commencement time, the application has not been withdrawn by the applicant or dealt with by ASIC; and

(c) the applicant is a member of the AFCA scheme at all times in the period (the transition period ) that:

(i) starts at the delayed commencement time; and

(ii) ends when the application is withdrawn by the applicant, or dealt with by ASIC, whichever happens first.

Note: ASIC may deal with the application by granting, or refusing to grant, the licence (see section 37 of the Credit Act), by granting, or refusing to grant, the variation (see sections 45 and 46A of the Credit Act), or by refusing to receive the application (see section 218 of the Credit Act).

(4) The Credit Act does not apply in relation to covered credit activity to which the application relates if the covered credit activity is engaged in by any of the following persons during the transition period:

(a) the applicant;

(b) a person who:

(i) is an employee or a director of the applicant, or of a related body corporate of the applicant; and

(ii) is acting on behalf of the applicant and within the authority of the applicant;

(c) a person who:

(i) the applicant intends to authorise under section 64 of the Credit Act to engage in the covered credit activity on behalf of the applicant, if the applicant becomes licensed to engage in the covered credit activity; and

(ii) could, after the delayed commencement time, be validly so authorised under section 64 of the Credit Act (as amended by this Act); and

(iii) is authorised in writing by the applicant to act on behalf of the applicant and is acting within that authority;

(d) if there is a person covered by paragraph (c) of this subitem (a prospective credit representative ) in relation to the applicant - another person who:

(i) the prospective credit representative intends to authorise under section 65 of the Credit Act to engage in the covered credit activity on behalf of the applicant, if the applicant becomes licensed to engage in the covered credit activity and the prospective credit representative becomes a credit representative of the applicant in relation to the covered credit activity; and

(ii) could, after the delayed commencement time, be validly so authorised under section 65 of the Credit Act (as amended by this Act); and

(iii) with the written consent of the applicant, is authorised in writing by the prospective credit representative to act on behalf of the applicant and is acting within that authority.

Definitions

(5) In this item:

covered credit activity means credit activity that relates to a buy now pay later contract or a low cost credit contract.

Credit Act means the National Consumer Credit Protection Act 2009.

delayed commencement time means the time when Part 2 of this Schedule commences.

Part 2   Responsible lending conduct

National Consumer Credit Protection Act 2009

9   Subsection 5(1)

Insert:

unsuitability assessment policy has the meaning given by subsection 133BXG(1).

10   Before section 115

Insert:

115A Scope of this Division

This Division does not apply in relation to a credit contract that is a low cost credit contract.

11   Section 128

After "the regulations", insert "for the purposes of this section".

12   After paragraph 128(d) (before the penalty)

Insert:

Note: Part 3-2BA affects how this section, and other provisions in this Part, apply in relation to certain low cost credit contracts.

13   Paragraph 133(4)(b)

Omit "at the time of the contract is entered or the credit limit is increased, the information", substitute "at the time the contract is entered or the credit limit is increased".

14   After Part 3-2B

Insert:

Part 3-2BA - Licensees that are credit providers under credit contracts: additional rules relating to low cost credit contracts

Division 1 - Introduction

133BX Guide to this Part

This Part has rules that apply to certain licensees who are, or are to be, credit providers under certain low cost credit contracts. It applies in addition to the general rules in Part 3-2, and modifies some of those rules.

Division 1 provides that a licensee may elect that this Part apply to the licensee in relation to some or all low cost credit contracts. This Part only applies to a licensee who has made an election, and only applies to such a licensee in relation to low cost credit contracts covered by the election.

Division 2 modifies how some of the general rules in Part 3-2 apply to a licensee who has made an election. These modifications affect the rules that deal with the obligations of the licensee:

(a) to assess whether a low cost credit contract will be unsuitable for a consumer before doing particular things in relation to the contract; and

(b) not to enter, or increase the credit limit of, a low cost credit contract that is unsuitable for a consumer.

Division 3 requires a licensee who has made an election to have a policy (called an unsuitability assessment policy) that sets out how the licensee will comply with the licensee's obligation under Part 3-2 to assess whether a low cost credit contract will be unsuitable for a consumer.

133BXA Scope of this Part

This Part applies if licensee makes election

(1) A licensee may, in writing, elect that this Part apply to the licensee in relation to:

(a) all low cost credit contracts; or

(b) each low cost credit contract in a specified class of low cost credit contracts.

(2) This Part:

(a) applies to a licensee if the licensee has made an election under subsection (1) and the election is in force; and

(b) applies to such a licensee in relation to a credit contract if the credit contract is a low cost credit contract covered by the election.

(3) An election made under subsection (1) remains in force until the licensee revokes the election.

Licensee must keep copy of election and revocation

(4) A licensee who makes an election under subsection (1) must keep a written copy of the election for the period:

(a) starting at the time when licensee makes the election; and

(b) ending 6 years after the day on which the election ceases to be in force.

(5) If a licensee revokes an election made under subsection (1), then the licensee must keep a written copy of the revocation for the period of 6 years after the day on which the licensee revokes the election.

Part 3-2 not otherwise affected

(6) Nothing in this Part affects how Part 3-2 applies to a licensee in relation to a credit contract if the licensee has not made an election under subsection (1) of this section that covers the contract.

Division 2 - Unsuitable low cost credit contracts

133BXB When inquiries etc. must be made

For the purposes of applying section 128 to a licensee in relation to a low cost credit contract:

(a) paragraphs 128(aa) and (ba) are to be disregarded; and

(b) the period for making the assessment mentioned in paragraph 128(c), and the inquiries and verification mentioned in paragraph 128(d), is taken to be the period of 90 days (or other period prescribed by the regulations for the purposes of this paragraph) ending immediately before the licensee starts to do the thing mentioned in paragraph 128(a) or (b) (whichever applies).

133BXC When inquiries etc. are reasonable

(1) This section applies to a licensee who:

(a) enters a low cost credit contract with a consumer who will be the debtor under the contract; or

(b) increases the credit limit of a low cost credit contract with a consumer who is the debtor under the contract.

Note: The licensee must also have elected under subsection 133BXA(1) that this Part apply to the licensee in relation to the low cost credit contract: see subsection 133BXA(2).

Relevant matters

(2) In determining whether the licensee has:

(a) made reasonable inquiries about the consumer's requirements and objectives in relation to the low cost credit contract, as required under paragraph 130(1)(a); and

(b) made reasonable inquiries about the consumer's financial situation, as required under paragraph 130(1)(b); and

(c) taken reasonable steps to verify the consumer's financial situation, as required under paragraph 130(1)(c);

regard mustbe had to the matters covered by subsection (3) of this section, and regard may be had to any other relevant matters.

Note: Regulations made for the purposes of subsection 130(2) may prescribe particular inquiries or steps that must be made or taken, or that do not need to be made or taken, for the purposes of paragraph 130(1)(a), (b) or (c).

(3) The matters covered by this subsection are the following:

(a) the nature of the low cost credit contract (including the terms of the contract and the type and amount of credit provided under the contract);

(b) if there is a target market determination (within the meaning of the Corporations Act 2001) for the low cost credit contract - the nature of the target market for the low cost credit contract, as described in that determination;

(c) whether the consumer is financially vulnerable;

(d) whether the licensee has any procedures in place to reduce the risk of the licensee providing credit to a consumer on terms that are not affordable for the consumer;

(e) whether the licensee has any procedures in place to mitigate the harm that may be caused to a consumer if the licensee provides credit to the consumer on terms that are not affordable for the consumer;

(f) any matters prescribed by the regulations.

Note: The particular things that a licensee must do in order to satisfy the licensee's obligations under paragraphs 130(1)(a) to (c) in relation to low cost credit contracts may vary from case to case, and may be less onerous in some cases than in others, depending on matters such as those covered by this subsection.

133BXD Assessments etc. in relation to larger contracts

(1) This section applies to a licensee who enters a low cost credit contract (the initial contract ) with a consumer whowill be the debtor under the contract.

Entering the initial contract

(2) The licensee may satisfy paragraphs 128(c) and (d) in relation to entering the initial contractby (respectively):

(a) making an assessment that would satisfy paragraph 128(c) in relation to entering a larger contract with the consumer; and

(b) making inquiries and verification that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer.

Note: For larger contract , see subsection (7).

Subsequent credit increases

(3) Subsection (4) applies if:

(a) the licensee satisfies paragraphs 128(c) and (d) in relation to entering the initial contract by:

(i) making an assessment (the initial assessment )that would satisfy paragraph 128(c) in relation to entering, with the consumer, a larger contract with a particular credit limit (the maximum credit limit ); and

(ii) making inquiries and verification (the initial inquiries and verification )that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer; and

(b) the initial assessment is an assessment that the larger contract will not be unsuitable for the consumer if the larger contract is entered in the period covered by the initial assessment.

(4) If the licensee subsequently, within the protected period, makes a protected increase to the credit limit of the initial contract, then:

(a) the licensee is taken to satisfy section 128 in relation to the protected increase (regardless of whether the initial assessment, and the initial inquiries and verification, were made within the period that applies in relation to the protected increase under that section); and

(b) the initial assessment is taken to be:

(i) an assessment that covers the protected period;and

(ii) an assessment that the initial contract will not be unsuitable for the consumer if the protected increase is made in the protected period.

Note 1: For protected increase and protected period , see subsection (7).

Note 2: Even if the licensee is taken under this subsection to satisfy section 128 in relation to the protected increase, it is still possible for the licensee to contravene subsection 131(1) or 133(1) in relation to the protected increase.

Exceptions

(5) Subsection (4) does not apply to the licensee in relation to the protected increase if, at the time when the protected increase is made, the licensee has information on the basis of which it would be reasonable to conclude that the credit contract is likely to be unsuitable for the consumer if the protected increase is made.

(6) Despite subsections (3) and (4):

(a) the licensee may, at any time after making the initial assessment and before making the protected increase, make a new assessment in relation to the protected increase for the purposes of paragraph 128(c); and

(b) if the licensee does so, then subsection (4) of this section does not apply to the licensee in relation to the protected increase.

Definitions

(7) In this section:

larger contract means a low cost credit contract that:

(a) has a credit limit that is greater than the credit limit of the initial contract when the initial contract is entered; and

(b) has terms that are otherwise substantially the same as the terms of the initial contract when the initial contract is entered.

protected increase : an increase to the credit limit of the initial contract is a protected increase if:

(a) after the increase, the initial contract has a credit limit that is no greater than the maximum credit limit (within the meaning of subparagraph (3)(a)(i)); and

(b) the terms of the initial contract after the increase are otherwise substantially the same as the terms of the initial contract immediately before the increase.

protected period means whichever of the following is shorter (disregarding paragraph (4)(b)):

(a) the period covered by the initial assessment;

(b) the period of 2 years beginning when the period covered by the initial assessment begins.

133BXE Assessments of low cost credit contracts - presumptions where credit limit of contract not above threshold amount

(1) This section applies when determining, for the purposes of subsection 131(1), whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(b) if the contract is entered, or the credit limit of the contract is increased, in the period covered by the assessment mentioned in subsection 131(1).

Note: This section does not affect whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(a) or (c).

Entering a low cost credit contract

(2) For the purpose of applying subsection 131(1) in relation to a licensee entering a low cost credit contract (the initial contract )with a consumer, if the credit limit of the initial contract, at the time the initial contract is entered, will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the initial contract is entered in the period covered by the assessment.

(3) However, subsection (2) does not apply if:

(a) the licensee satisfies paragraph 128(c) in relation to entering the initial contract by making an assessment that would satisfy that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2)); and

(b) the credit limit of the larger contract is greater than the threshold amount.

Increasing the credit limit of a low cost credit contract

(4) For the purpose of applying subsection 131(1) in relation to an increase (the relevant increase ) made by a licensee to the credit limit of a low cost credit contract(the initial contract )with a consumer, if the credit limit of the initial contract after the increase will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the relevant increase occurs during the period covered by the assessment.

(5) However, subsection (4) does not apply if:

(a) the licensee previously satisfied paragraph 128(c) in relation to entering the initial contract by making an assessment that would have satisfied that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2)); and

(b) the credit limit of the larger contract was greater than the threshold amount; and

(c) because of subsection 133BXD(4), the licensee is not required to make a new assessment in order to satisfy paragraph 128(c) into relation to the relevant increase.

Definitions

(6) In this section:

larger contract means a low cost credit contract that:

(a) has a credit limit that is greater than the credit limit of the initial contract when the initial contract is entered; and

(b) has terms that are otherwise substantially the same as the terms of the initial contract when the initial contract is entered.

threshold amount means:

(a) $2,000, unless paragraph (b) applies; or

(b) if the regulations prescribe another dollar amount (whether larger or smaller) for the purposes of this paragraph - that other dollar amount.

133BXF Prohibition on entering unsuitable low cost credit contracts etc. - presumptions where credit limit of contract not above threshold amount

(1) This section applies when determining, for the purposes of subsection 133(1), whether a low cost credit contract is unsuitable for a consumer under paragraph 133(2)(b).

Note: This section does not affect whether a low cost credit contract is unsuitable for a consumer under paragraph 133(2)(a) or (c).

Entering a low cost credit contract

(2) For the purpose of applying subsection 133(1) in relation to a licensee entering a low cost credit contract with a consumer, if the credit limit of the contract, at the time the contract is entered, is less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the contract is not unsuitable for the consumer under paragraph 133(2)(b).

Increasing the credit limit of a low cost credit contract

(3) For the purpose of applying subsection 133(1) in relation to an increase made by a licensee to the credit limit of a low cost credit contractwith a consumer, if the credit limit of the contract after the increase is less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the contract is not unsuitable for the consumer under paragraph 133(2)(b).

Definitions

(4) In this section:

threshold amount means:

(a) $2,000, unless paragraph (b) applies; or

(b) if the regulations prescribe another dollar amount (whether larger or smaller) for the purposes of this paragraph - that other dollar amount.

Division 3 - Unsuitability assessment policies

133BXG Licensee must have an unsuitability assessment policy

(1) A licensee must have a written policy (an unsuitability assessment policy ) that sets out how the licensee will comply with sections 128 and 131 (which deal with assessments of unsuitability), as those sections apply in relation to low cost credit contracts.

Unsuitability assessment policy must be effective

(2) The licensee must ensure that the licensee's unsuitability assessment policy is one that, if followed, makes it likely that the licensee will comply with sections 128 and 131, as those sections apply in relation to low cost credit contracts.

Regulations may prescribe further requirements

(3) The licensee must comply with any requirements relating to unsuitability assessment policies prescribed by the regulations for the purposes of this subsection.

15   After subsection 17(15A) of the National Credit Code

Insert:

Elections relating to low cost credit contracts

(15B) If:

(a) the credit contract is a low cost credit contract; and

(b) the credit provider has made an election under subsection 133BXA(1) of the National Credit Act that covers the contract, and the election is in force;

then the contract document must contain a statement that the credit provider has made such an election.

16   Saving provision - regulations

To avoid doubt, regulations prescribing a period for the purposes of section 128 of the National Consumer Credit Protection Act 2009 that were in force immediately before the commencement of this Part:

(a) continue in force on and after that commencement; and

(b) are taken, on and after that commencement, to be made for the purposes of that section as amended by this Part.

17   Application provision - obligations of credit assistance providers before providing credit assistance

Division 4 of Part 3-1 of the National Consumer Credit Protection Act 2009, as amended by this Part, applies in relation to credit assistance provided on or after the commencement of this Part.

18   Application provision - Part 3-2BA of the Act

Elections

(1) A licensee may, under subsection 133BXA(1) of the National Consumer Credit Protection Act 2009 (the Act ), make an election that covers a low cost credit contract whether the contract was entered into before, on or after the time (the commencement time ) when this Part commences.

When inquiries etc. must be made

(2) Section 133BXB of the Act applies for the purposes of applying section 128 of the Act in relation to conduct mentioned in paragraph 128(a), (aa), (b) or (ba) of the Act that occurs on or after the commencement time.

(3) To avoid doubt, a period of 90 days mentioned in paragraph 133BXB(b) of the Act may start before, on or after the commencement time.

When inquiries etc. are reasonable

(4) Section 133BXC of the Act applies in relation to:

(a) conduct mentioned in paragraph 133BXC(1)(a) or (b) of the Act that occurs on or after the commencement time; and

(b) determining whether a licensee has done a thing mentioned in paragraph 133BXC(2)(a), (b) or (c) of the Act, whether that thing is done before, on or after the commencement time.

Assessments etc. in relation to larger contracts

(5) Subsection 133BXD(2) of the Act applies in relation to entering a low cost credit contract if:

(a) the contract is entered on or after the commencement time; and

(b) the assessment, and the inquiries and verification, mentioned in that subsection are made on or after the commencement time.

(6) Subsections 133BXD(3) to (6) of the Act apply:

(a) in relation to entering a low cost credit contract, as mentioned in paragraph 133BXD(3)(a) of the Act, if:

(i) the contract is entered on or after the commencement time; and

(ii) the assessment, and the inquiries and verification, mentioned in that paragraph are made on or after the commencement time; and

(b) in relation to an increase to the credit limit of a low cost credit contract, as mentioned in subsection 133BXD(4) of the Act, if the increase occurs on or after the commencement time.

Presumptions

(7) Section 133BXE of the Act applies in relation to assessments mentioned in subsection 131(1) of the Act that are made on or after the commencement time.

(8) Section 133BXF of the Act applies in relation to conduct mentioned in paragraph 133(1)(a) or (b) of the Act that occurs on or after the commencement time.

19   Application provision - information about elections

Subsection 17(15B) of the National Credit Code, as inserted by this Part, applies in relation to a contract document for a low cost credit contract entered into on or after the commencement of this Part.

Part 3   Credit representatives

National Consumer Credit Protection Act 2009

20   Subsection 64(5)

Omit "This section", substitute "This subsection".

21   Paragraph 64(5)(c)

Repeal the paragraph, substitute:

(c) a person who is not a member of the AFCA scheme to engage in a credit activity in relation to a contract that is not a low cost credit contract; or

(ca) a person who is not a member of the AFCA scheme to collect, on the licensee's behalf, repayments made by a debtor under a low cost credit contract; or

22   Paragraph 65(6)(c)

Repeal the paragraph, substitute:

(c) a natural person who is not a member of the AFCA scheme to engage in a credit activity in relation to a contract that is not a low cost credit contract; or

(ca) a natural person who is not a member of the AFCA scheme to collect, on the licensee's behalf, repayments made by a debtor under a low cost credit contract; or

23   After subsection 71(5)

Insert:

Exceptions - sub-authorisations relating to low cost credit contracts

(5A) Subsections (1) and (4) do not apply to an authorisation under subsection 65(1) (which deals with sub-authorisations) that authorises a person to engage in credit activities in relation to a low cost credit contract.

24   After subsection 158(1)

Insert:

Exceptions - credit activity relating to low cost credit contracts

(1A) Subsection (1) does not apply if the credit representative gives the consumer the licensee's credit guide:

(a) for the purpose of satisfying subsection 113(1) in connection with the provision of credit assistance to the consumer in relation a low cost credit contract; or

(b) for the purpose of satisfying subsection 126(1) in connection with entry into a low cost credit contract with the consumer; or

(c) for the purpose of satisfying subsection 127(1) in connection with the assignment to the licensee of rights or obligations of a credit provider under a low cost credit contract.

Form and content of credit guide

25   Paragraph 160(3)(e)

After "is a credit representative", insert "and has been allocated a credit representative number".

26   Application provision

When authorisation is of no effect

(1) The amendments of sections 64 and 65 of the National Consumer Credit ProtectionAct 2009 made by this Part apply, on and after the commencement of this Part, in relation to authorisations given before, on or after that commencement.

Obligation to notify ASIC

(2) Subsection 71(5A) of the National Consumer Credit Protection Act 2009, as inserted by this Part:

(a) to the extent that it relates to subsection 71(1) of that Act (which deals with the obligation to notify when an authorisation is given) - applies in relation to authorisations given on or after the commencement of this Part; and

(b) to the extent that it relates to subsection 71(4) of that Act (which deals with the obligation to notify of changes after an authorisation is given) - applies, on and after the commencement of this Part, in relation to authorisations given before, on or after that commencement.

Part 4   Precontractual disclosure

National Consumer Credit Protection Act 2009

27   Subsection 16(1) of the National Credit Code

After "credit contract", insert "(other than a low cost credit contract)".

28   After subsection 16(1) of the National Credit Code

Insert:

(1A) A credit provider must not enter into a low cost credit contract unless the credit provider has given the debtor:

(a) a precontractual statement setting out the matters required by section 17 to be included in the contract document; and

(b) an information statement that complies with:

(i) the requirements prescribed by the regulations; and

(ii) any requirements determined by ASIC under subsection (1B) of this section.

(1B) ASIC may, by legislative instrument, determine requirements for the purposes of subparagraph (1A)(b)(ii). The requirements must be consistent with any requirements prescribed by the regulations for the purposes of subparagraph (1A)(b)(i).

29   Application provision

(1) Subject to subitem (2), the amendments of section 16 of the National Credit Code made by this Part apply in relation to entering into a credit contract on or after the commencement of this Part.

(2) The amendments do not apply in relation to entering into a credit contract on or after the commencement of this Part if the precontractual statement, and information statement, relating to the contract were given:

(a) before the commencement of this Part; and

(b) in accordance with section 16 of the National Credit Code (as in force at the time the statements were given).

Part 5   Contract documents and statements of account

National Consumer Credit Protection Act 2009

30   After subsection 17(6) of the National Credit Code

Insert:

Where no interest charge is payable under low cost credit contract

(6A) In the case of a credit contract that is a low cost credit contract, if no interest charges are payable under the contract then:

(a) subsections (4), (5) and (6) do not apply in relation to the contract document; and

(b) the contract document must contain a statement to the effect that no interest charges are payable under the contract.

31   Subsection 17(7) of the National Credit Code

Omit "The contract document must contain", substitute "In the case of a credit contract other than a low cost credit contract, the contract document must contain".

32   After subsection 17(7) of the National Credit Code

Insert:

(7A) If the credit contract is a low cost credit contract, and more than one repayment is to be made, then the contract document must contain:

(a) the frequency of payment of repayments; and

(b) if ascertainable, the amount of the repayments, the number of repayments and the total amount of the repayments; and

(c) if the amount of the repayments is not ascertainable - the method of calculating the amount of the repayments.

33   After subsection 17(10) of the National Credit Code

Insert:

(10A) If the credit contract is a low cost credit contract, and statements of account are to be given to the debtor by electronic communication, then the contract document must contain information about how the statements of account will be given.

(10B) If the credit contract is a low cost credit contract, and statements of account are not required to be given because of paragraph 33(3)(g), then the contract document must contain the information (if any) prescribed by the regulations for the purposes of this subsection.

34   At the end of subsection 33(3) of the National Credit Code

Add:

; or (g) in the case of a credit contract that is a low cost credit contract - the credit provider satisfies the requirements prescribed by the regulations for the purposes of this paragraph.

35   Application provision

(1) On and after the commencement of this Part, section 17 of the National Credit Code applies in relation to a buy now pay later contract or a low cost credit contract only if the contract was entered into on or after the commencement of this Part.

(2) Paragraph 33(3)(g) of the National Credit Code, as added by this Part, applies on and after the commencement of this Part in relation to a low cost credit contract entered into before, on or after that commencement.

Part 6   Increasing credit limits

National Consumer Credit Protection Act 2009

36   Subsection 133BE(1) (paragraph (b) of the note)

After "subsection 67(4)", insert "and section 67AA".

37   Paragraph 61(2)(b) of the National Credit Code

Omit "section 68", substitute "section 67AA or 68".

38   Section 67 (heading) of the National Credit Code

Omit " in ", substitute " under ".

39   After section 67 of the National Credit Code

Insert:

67AA Increasing credit limits under low cost credit contracts

A credit provider may increase the credit limit under a low cost credit contract only at the request of the debtor or with the written consent of the debtor.

Note: For low cost credit contracts that are continuing credit contracts, subsection 67(4) has the same effect as this section.

40   At the end of subsection 68(4) of the National Credit Code

Add "or section 67AA".

Part 7   Interest rates and comparison rates

National Consumer Credit Protection Act 2009

41   Paragraph 32A(4)(b) of the National Credit Code

After "the credit contract is a", insert "low cost credit contract,".

42   After subsection 34(6) of the National Credit Code

Insert:

(6A) Subsection (6) applies in relation to a low cost credit contract only if interest charges are payable under the contract.

43   Subsection 157(2) of the National Credit Code

After "continuing credit contracts", insert "or low cost credit contracts".

44   Section 158 of the National Credit Code (at the end of the heading)

Add " or low cost credit contracts ".

45   At the end of subsection 158(1) of the National Credit Code

Add "or low cost credit contracts".

46   Subsection 158(2) of the National Credit Code

Repeal the subsection, substitute:

(2) Accordingly, a reference in this Part to the provision of credit (or to a credit contract or related matters) does not include a reference to:

(a) the provision of credit under a continuing credit contract (or to a continuing credit contract or matters related to such a contract); or

(b) the provision of credit under a low cost credit contract (or to a low cost credit contract or matters related to such a contract).

47   Section 159 of the National Credit Code (definition of consumer credit product)

After "continuing credit contract", insert "or a low cost credit contract".

48   Application provision - comparison rates

(1) The amendments of sections 157, 158 and 159 of the National Credit Code made by this Part apply in relation to a credit advertisement that is published on or after the commencement of this Part.

(2) For the purposes of subitem (1), a credit advertisement that:

(a) began to be published before the commencement of this Part; and

(b) remains published on, or for a period after, that commencement;

is taken to be published on or after that commencement.

Part 8   Default notices

National Consumer Credit Protection Act 2009

49   Subsection 39C(1) of the National Credit Code

Omit "(1)".

50   Subsection 39C(2) of the National Credit Code

Repeal the subsection.

51   Subdivision C of Division 1 of Part 5 of the National Credit Code (heading)

Omit " first direct debit default ", substitute " first default in payment ".

52   Section 87 of the National Credit Code (heading)

Omit " the first time a direct debit default occurs ", substitute " of first default in payment ".

53   Before subsection 87(1) of the National Credit Code

Insert:

Which defaults does this section apply to?

54   Paragraph 87(1)(a) of the National Credit Code