Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Schedule 1
Amendment of the Bankruptcy Act 1966
8. The Bankruptcy Act 1966 (the Bankruptcy Act) sets out the treatment of property in the event of the bankruptcy of a person, or the death of a bankrupt. Generally, any benefits that the bankrupt has in superannuation up to the pension reasonable benefit limit (RBL) is not available to creditors. This schedule amends the Bankruptcy Act to ensure benefits in an exempt public sector superannuation scheme are treated in a similar fashion to benefits in a regulated superannuation fund.
Item 1 - At the end of subparagraph 116(2)(d)(iii)
9. This item inserts new sub-subparagraph 116(2)(d)(iii)(C) into the Bankruptcy Act to provide that a members benefits in an exempt public sector superannuation scheme, up to the members pension RBL, are exempt from creditors in the event of the members bankruptcy.
Item 2 - After sub-subparagraph 249(6)(a)(ii)(B)
10. This item inserts new sub-subparagraph 249(6)(a)(ii)(BAA) into the Bankruptcy Act to provide that where the administration of the estate of a deceased person commenced before the death of the person, the divisible property does not include a payment from an exempt public sector superannuation scheme that would not have been divisible among the creditors if the person had not died, the sequestration order had been made before death and the amount concerned had been paid immediately before the persons death.
Item 3 - After sub-subparagraph 249(7)(a)(ii)(B)
11. This item inserts new sub-subparagraph 249(7)(a)(ii)(BAA) into the Bankruptcy Act to provide that where the administration of the estate of a deceased person commenced at the time of the death of the person, the divisible property does not include a payment from an exempt public sector superannuation scheme that would not have been divisible among the creditors if the person had not died, the sequestration order had been made before death and the amount concerned had been paid immediately before the persons death.
Item 4 - After sub-subparagraph 249(8)(a)(ii)(B)
12. This item inserts new sub-subparagraph 249(8)(a)(ii)(BAA) into the Bankruptcy Act to provide that where the administration of the estate of a deceased person commenced after the death of the person, the divisible property does not include a payment from an exempt public sector superannuation scheme that would not have been divisible among the creditors if the person had not died, the sequestration order had been made before death and the amount concerned had been paid immediately before the persons death.
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