Bills Digest 43 1996-97 Bankruptcy (Estate Charges) Bill 1996


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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

Passage History

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.

Purpose

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.

Background

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.

Main Provisions

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.

Contact Officer and Copyright Details

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

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