Explanatory Memorandum
(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)Chapter 2
Schedule 2 - First Home Saver Accounts
Outline of chapter
2.1 Schedule 2 to the Bill amends the First Home Saver Accounts Act 2008 (FHSA Act) to provide for new arrangements for unclaimed moneys held by FHSA providers.
Context of amendments
2.2 Currently, FHSA providers within the meaning of the FHSA Act are required to report on and pay unclaimed moneys to ASIC. Unclaimed moneys are FHSAs where there has not been a contribution or withdrawal (other than fees or taxes) for a period of not less than seven years and the FHSA provider has been unable to contact the FHSA holder (Sections 17A, 51A and 51B, FHSA Act).
2.3 ASIC may publish details relating to unclaimed moneys from FHSAs (Section 51D, FHSA Act).
2.4 Owners of unclaimed moneys are able to lodge claims for the return of the value of their money at any time through funds appropriated by Parliament for that purpose (Section 51C, FHSA Act).
2.5 The new arrangements will reduce the period before a FHSA is treated as unclaimed moneys to three years. They also allow for the payment of interest from 1 July 2013.
Summary of new law
2.6 The new law will amend sections 17A and 51C of the FHSA Act to change the unclaimed moneys period from seven years to three years and provide for the payment of interest on unclaimed moneys claimed after 1 July 2013.
Comparison of key features of new law and current law
| New law | Current law |
| Amounts held by FHSA providers become unclaimed moneys three years after the last contribution or withdrawal (other than fees, taxes or interest) and after the FHSA provider has made reasonable efforts to contact the FHSA holder. | Amounts held by FHSA providers become unclaimed moneys seven years after the last contribution or withdrawal (other than fees, taxes or interest) and after the FHSA provider has made reasonable efforts to contact the FHSA holder. |
| Claimants are able to seek the return of unclaimed moneys at any time through an appropriation by Parliament. This would include an interest component . | Claimants are able to seek the return of unclaimed moneys at any time through an appropriation by Parliament. No interest is payable . |
Detailed explanation of new law
2.7 The Bill amends the definition of unclaimed moneys by adding additional limbs to the definition of unclaimed moneys. Accordingly the test currently contained in section 17A is renumbered as subsection 17A(1). [Schedule 2, item 1, section 17A]
2.8 The Bill changes the time period before which a FHSA become unclaimed moneys from seven years to three years or such longer period as may be specified in regulations. [Schedule 2, item 2, paragraph 17A(a)]
2.9 Regulations may specify additional conditions that must be met before a FHSA will become unclaimed moneys. [Schedule 2, item 3, subsections 17A(2), 17A(3), 17A(4)]
2.10 The Bill also provides that owners of unclaimed moneys will be entitled to a payment of interest, which will be calculated according to the regulations. This interest does not accrue prior to 1 July 2013. The regulations may prescribe different rates for different periods over which interest accrues. It is intended that interest will be calculated in accordance with the Consumer Price Index (CPI) and that a nil rate will be able to be prescribed where the CPI does not change between given periods. [Schedule 2, item 4, subsections 51C(1A), 51C(1B), 51C(1C)]
2.11 The Bill requires that FHSA providers must pass on any amount of interest paid by ASIC in relation to a FHSA that has been treated as unclaimed moneys. [Schedule 2, item 5, paragraph 51C(2)(a)]
Application and transitional provisions
2.12 The amendments in this Chapter will commence the day after the Act receives the Royal Assent.
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