WARNING:
This Digest is prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments.
This Digest was available from 18 October 1996.
CONTENTS
Bankruptcy (Estate Charges) Bill 1996
Date Introduced: 9 October 1996
House: Representatives
Portfolio: Attorney-General
Commencement: Proclamation, or 6 months after
Royal Assent whichever date comes first.
To allow the imposition of increased charges made under the
Bankruptcy Act 1966. The charges relate to the
administration of bankrupt estates by the Official Trustee and
registered trustees.
This Bill is one of a package of 3 Bills which follow a separate
major Bill passed by the Parliament on 10 October 1996 dealing with
reform in the administration of bankruptcy in Australia.
On 26 June 1996, the Bankruptcy Legislation Amendment Bill 1996
was introduced into the House of Representatives. The Bill passed
both Houses on 10 October 1996. The Bankruptcy Legislation
Amendment Bill 1996 is a significant piece of legislation which
includes major changes to the administration of bankruptcy, in that
a number of functions now performed by the Federal Court will
become the responsibility of the Insolvency and Trustee Service
Australia (ITSA). ITSA is a Division of the Attorney-General's
Department and the aim of the major changes is to create a
One Stop Shop thus streamlining procedures and
offering convenience for those who have need of the bankruptcy
process.
This current package of Bills comprises:
- Bankruptcy Amendment Bill 1996
- Bankruptcy (Estate Charges) Bill 1996
(this Bill)
- Bankruptcy (Registration Charges) Bill 1996
Under the existing Bankruptcy Rules, registered trustees
(invariably an accountant) and the Official Trustee (Government
statutory appointees) are required to pay a fee based on the amount
received in the administration of a bankrupt estate. The fee is a
cost recovery for the running of ITSA. ITSA is responsible for the
oversight of bankruptcy administration in Australia. The fee is
calculated at a maximum of 3% reducing to 1.25% for amounts
realised in the bankrupt estate in excess of $100,000.
This Bill replaces the existing Bankruptcy Rules with an Act
which imposes a flat and increased fee of 8%, calculated on the
basis of amounts credited to trustees' accounts in a six monthly
period. This fee is also paid on Part X administrations (these are
formal insolvency arrangements one step short of actual
bankruptcy). Also, any interest earned will be paid to Consolidated
Revenue.
Clause 4 establishes the first 6 monthly
charge period as commencing on 1 November 1996. The
subsequent charge period is 1 May 1997, and so on.
Clause 5 imposes on trustees, the personal
obligation to pay the Commonwealth any interest received in the
administration of estates as a charge. The interest is payable
within 21 days after the end of a charge period.
[Digest Comment: This is a new charge in that registered
trustees, as distinct from the Official Trustee (who already pays
interest into Consolidated Revenue), will now be required to pay
interest received to Consolidated Revenue.]
Clauses 6 to 8 impose on trustees, the personal
obligation to pay to the Commonwealth a flat fee of 8% on amounts
realised in bankruptcy as a charge. The amount of 8% can be varied
by Regulations made under the Act. The charge (fee of 8%) is
payable within 21 days after the charge period.
Brendan Bailey Ph. 06 277 2434
17 October 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
PRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1323-9031
© Commonwealth of Australia 1996
Except to the extent of the uses permitted under the
Copyright Act 1968, no part of this publication may be
reproduced or transmitted in any form or by any means, including
information storage and retrieval systems, without the prior
written consent of the Parliamentary Library, other than by Members
of the Australian Parliament in the course of their official
duties.
Published by the Department of the Parliamentary Library,
1996.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 18 October 1996
Back to top