Bills Digest no. 21 2008–09
First Home Saver Accounts (Further Provisions) Amendment Bill
2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 4 September
2008
House: House of Representatives
Portfolio: Treasury
Commencement:
The formal provisions
commence on Royal Assent; Schedules 1 and 2 commence on the day
after the Act receives Royal Assent; Schedule 3 commences on 1 July
2009; and Schedule 4 commences on the day after Royal Assent, or
the commencement of Schedule 1 to the Family Law Amendment (De
Facto Financial Matters and Other Measures) Act 2008 (the De
Facto Financial Matters Act, whichever occurs later.[1]
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
Primarily the
Bill makes consequential amendments to a number of Acts following
the passage of the First Home Saver Accounts Act 2008 (the
FHSA Act).
The First Home Savers Accounts (FHSA)
initiative was a commitment made by the Australian Labor Party
during the 2007 election campaign to assist first home buyers to
save for a deposit for a home. The background to the initiative is
set out in detail in the Bills Digest for the First Home Savers
Accounts Bill 2008.[2] Following public consultation on the proposed
arrangements for the accounts, the original Bill was introduced
into the House of Representatives on 28 May 2008 and into the
Senate on 16 June 2008. The FHSA Act received Royal Assent on 25
June and commenced on 26 June 2008. The term FHSA is defined in
section 8 of the FHSA Act as follows:
An individual s account, life policy or
beneficial interest in a trust is an FHSA
(short for first home saver account) if:
- it is described as an FHSA; and
- it is opened or issued on or after 1 October 2008 (or a
later day (if any) specified in the regulations); and
- it is:
- an account to which an [Authorised Deposit-taking Institution]
accepts, or has accepted, contributions; or
- a life policy issued by a life insurance company; or
- a beneficial interest in a trust constituted by a deed, the
trustee of which holds an authorisation as an FHSA provider.
The Bill amends 12 Acts to insert reference to
various matters related to FHSAs which are discussed in the
Main Provisions section below. In summary, some
amendments are of a fairly minor but technical, consequential
nature, such as the updating of legislative references to include
reference to provisions and concepts in the FHSA Act. Other
amendments are more substantial, such as those which extend secrecy
provisions to cover the sharing of information about FHSAs.
Schedule 3 to the Bill contains amendments which
are consequential upon the passage of the First Home Saver Account
Providers Supervisory Levy Imposition Bill 2008. That Bill was
introduced at the same time as the current Bill. It is, however,
the subject of a separate Bills Digest.[3]
The Bill also amends the FHSA Act itself (see
the discussion of items 2 3 of Schedule 1 and
items 4 37 of Schedule 2 to the Bill below). Some
of these amendments are of a minor, consequential nature, but
others contain new, substantive material, such as the insertion of
proposed Part 4A of the FHSA Act, which deals with
unclaimed money in FHSAs. Other amendments alter secrecy and
disclosure provisions in various Acts, primarily to enable the
sharing of information between Government agencies that perform
functions in relation to FHSAs.
On 4 September 2008, the Senate Selection of
Bills Committee resolved to recommend that the current Bill should
not be referred to any committee.[4] At the time of writing, the Bill has not been
referred to any other committee for inquiry and report.
The Senate Select Committee on Housing
Affordability referred to FHSAs in its report titled A good house
is hard to find: Housing affordability in Australia , published on
16 June 2008 the same day as the First Home Saver Accounts Bill
2008 was introduced into the Senate. Chapter 9 of that report is
headed Current and proposed schemes to increase home ownership .
The Senate Committee found (at paragraph 9.18) that some aspects of
the FHSA scheme are widely praised, such as the encouragement for
households to save more and build a deposit , adding that [t]his
may help build a culture of saving .[5] However, the Senate Committee also
noted three concerns about the scheme, two of which have at least
partly been addressed by the government s modifications to the
original FHSA Bill. The concerns are that the scheme is too
complex; it is unfair; and it could lead to higher house
prices.[6] In the
event, the Committee made no recommendation in relation to the
scheme.
According to the Explanatory Memorandum for
the Bill, the amendments contained in the current Bill will not
have a financial impact .[7]
In relation to the impact of compliance costs,
the Explanatory Memorandum states: There are likely to be medium
implementation costs for providers who choose to offer FHSAs.
However, the design of the initiative as reflected in the law has
sought to minimise compliance costs for account providers.
Schedule 1 contains
amendments that will apply from 1 October 2008, when FHSAs come
into being.
Item 1 of Schedule
1 repeals the definition of contribution in section 5 of
the Anti-Money Laundering and Counter-Terrorism Financing Act
2006, and replaces it with a new definition. Currently, the
definition provides:
contribution , in
relation to an FHSA or [retirement savings account], has the same
meaning as in the Retirement Savings Accounts Act
1997.
The content of the proposed definition is not
different but it is clearer, because it no longer relies on the
cross-referenced definition of FHSA located elsewhere in section 5
(where a FHSA is defined by reference to the FHSA Act), and removes
the possibility that a reader may look to the Retirement
Savings Account Act 1997 (Retirement Savings Account Act) for
a definition of a FHSA.
First Home Saver Accounts Act
2008
Item 2 amends subsection
31(1) of the FHSA Act to include proposed
paragraph 31(1)(h). Section 31 provides that a FHSA
provider must not make a payment from the FHSA unless authorised by
law. Proposed paragraph 31(1)(h) authorises the
provider to make a payment of an amount of tax .
Item 3 inserts
proposed section 126C into the FHSA Act.
(Item 37 of Schedule 2 to the
Bill inserts proposed sections 126A and 126B see
below.) Proposed section 126C protects a FHSA provider from
liability for any loss or damage suffered by any person for a thing
done (or not done) by the FHSA provider in good faith on reliance
on either an application under proposed section
126A (see below) for information about the balance of a
FHSA or a family law obligation . The term family law obligation is
defined in section 18 of the FHSA Act to mean:
- a court order under the Family Law Act 1975; or
- a financial agreement made under Part VIIIA of the Family
Law Act 1975 that is binding because of section 90G of that
Act.[8]
Item 4 expands the definition
of fringe benefit in subsection 136(1) of the Fringe Benefits
Tax Assessment Act 1986 (FBT Assessment Act) to include
reference in proposed paragraph 136(1)(hd) to a
benefit that is constituted by the making of a contribution to an
FHSA (as defined in the FHSA Act and quoted above in the
Background section above) or is an expense payment
benefit in relation to such a contribution.
The term expense payment benefit is defined in
subsection 136(1) to mean a benefit referred to in section 20 of
the FBT Assessment Act. Section 20 deals specifically with expense
payment benefits and provides:
Where a person (in this section referred to as
the provider):
- makes a payment in discharge, in whole or in part, of an
obligation of another person (in this section referred to as the
recipient) to pay an amount to a third
person in respect of expenditure incurred by the recipient; or
- reimburses another person (in this section also referred to as
the recipient ), in whole or in part, in respect of an amount of
expenditure incurred by the recipient;
the making of the payment referred to in
paragraph (a), or the reimbursement referred to in paragraph (b),
shall be taken to constitute the provision of a benefit by the
provider to the recipient.
Item 5 of Schedule
1 inserts a definition of FHSA into subsection 6(1) of the
Income Tax Assessment Act 1936 (ITAA 1936), which is the
interpretation provision in that Act.
Item 6 amends subsection
159J(6) of the ITAA 1936 by inserting proposed paragraphs
159J(6)(aae) and (aaf) to expand the definition of the
term separate net income (in relation to a dependant) to exclude an
amount of earnings or other return credited to an FHSA and a
Government FHSA contribution . The term Government FHSA
contribution is defined in section 11 of the FHSA Act as a
contribution to an FHSA or other payment by the Commissioner [of
Taxation] that is payable under Part 4 of this Act for a person
.[9]
Items 7 9 amend the
definitions of the terms interest-bearing account ,
interest-bearing deposit and unit trust in section 202A of the ITAA
1936 to make clear that a FHSA does not fall within the scope of
those terms. Section 202A is the interpretation section for
Part IVA of that Act, which deals with schemes to reduce
income tax.
Items 10 11 insert reference
to provisions in the Income Tax Assessment Act 1997 (ITAA
1997) that deal with FHSAs into section 10-5 of the ITAA 1997,
which contains a list of provisions about assessable income in the
ITAA 1997. (The list makes it relatively easy to find provisions
that deal with assessable income in various contexts.) Item
12 inserts reference to credits to and payments from
FHSAs, and tax paid by providers of FHSAs in section 11-55 of the
ITAA Act 1997, which contains a list of non-assessable non-exempt
income provisions in the ITAA Act 1997.
Item 13 inserts
proposed section 15-80 at the end of Division 15
of Part 2-1 of Chapter 2 of the ITAA 1997. Division 15 deals with
some items of assessable income. Proposed section
15-80 deals with employer FSHA contributions. It provides
that a person s assessable income includes a contribution or
expense payment benefit of a kind mentioned in proposed
paragraph (hd) of the definition of fringe benefit in
subsection 136(1) of the FBT Assessment Act (see item
4 of Schedule 1 above) that, but for that
paragraph, would be a fringe benefit . In other words, employer
FHSA contributions constitute assessable income.
Item 14 amends section
205-15, which sets out a table showing when a credit (called a
franking credit ) arises in the franking account of an entity and
the amount of the credit. Proposed subsection
205-15(3) provides that despite items 1 or
2 in the table (which deal with an entity that pays a PAYG
instalment or income tax), no credit arises on that part of the
payment that is attributable to a payment of income tax in relation
to a FHSA component and/or a retirement savings account component.
Item 16 makes a similar amendment to section
205-30, which sets out a table showing when a debit (called a
franking debit ) arises in the franking account of an entity and
the amount of the debit.
Items 20 and 21 amend section
295-615 of the ITAA 1997, which defines when a person has quoted
(for superannuation purposes) his/her tax file number, to include
the situation where a person has provided the tax file number in
connection with the FHSA Act.
Item 22 inserts
proposed sections 345-25 and 345-30 into Division
345 of Part 3-45 of the ITAA 1997. Part 3-45 contains rules for
particular industries and occupations. Division 345 deals with
FHSAs. Proposed section 345-25 states that a FHSA
provider that is an approved deposit-taking institution (ADI)
(other than a retirement savings account provider) cannot deduct
anything for amounts credited to FHSAs. Proposed section
345-30 states that an amount is not assessable income, and
is not exempt income of a FHSA provider if the amount is paid from
a FHSA to the FHSA provider to enable the provider to make a
payment of an amount of tax under paragraph 31(1)(h) of the FHSA
Act (see item 2 above) and the provider is
an ADI.
Item 23 removes reference to
sections 22 and 34 of the FHSA Act from
subparagraph 7(1)(c)(v) of the Superannuation (Government
Co-contribution for Low Income Earners) Act 2003. Section 7 of
that Act deals with eligible personal superannuation contributions
that attract matching Government co-contributions. Currently
subparagraph 7(1)(c)(v) states that the a payment from an FHSA
required under section 22 or 34 of the First Home Saver
Accounts Act 2008 is not such a contribution. The
proposed amendment will mean that a payment from an FHSA under
any section of the FHSA Act (and not just section 22 or 34)
is not an eligible personal superannuation contribution
.
Item 24 amends paragraph
12-1(3)(b) in Schedule 1 to the Taxation Administration Act
1953 (Taxation Administration Act). Schedule 1 deals with the
collection and recovery of income tax and other liabilities.
Subsection 12-3(3) currently states that in working out how much to
withhold from a payment under various provisions of that Act, one
must disregard so much of the payment as (a) is an expense payment
benefit, as defined by section 136 of the FBT Assessment Act; and
(b) is not an exempt benefit under section 22 of that Act (which
deals with reimbursement of an employee s car expenses on the basis
of distance travelled). The effect of the proposed amendment in
item 24 is that an expense payment benefit in
relation to a contribution to a FHSA will be treated in the same
way as an exempt benefit under section 22 of the FBT Assessment
Act.
Item 25 replaces the
reference to paragraph (g) in paragraph 391-5(1)(e) of Schedule 1
to the Tax Administration Act with a reference to paragraph (g) or
(h) .[10] The
amendment means that it will not be necessary for a FHSA provider
to include certain FHSA payments in a statement to the Commissioner
of Taxation. Item 25 is consequential upon the
amendment made by item 2 (see above).
The amendments in Schedule 2
will occur on the day after Royal Assent. This Digest will deal
first with the amendments relating to secrecy and disclosure
provisions in various Acts, and second with the amendments dealing
with unclaimed money. It will then deal sequentially with other
amendments.
Item 1 of Schedule
2 to the Bill inserts proposed subsection
127(1AA) into the Australian Securities and
Investments Commission Act 2001 (ASIC Act) to provide that
subsection 127(1) does not apply to information given or produced
in accordance with section 70 of the FHSA Act. Subsection 127(1) of
the ASIC Act states that ASIC must take all reasonable measures to
protect confidential information and protected information (as
defined in section 127 of that Act) from unauthorised use or
disclosure. Similarly, section 70 of the FHSA Act deals with
secrecy and sets out restrictions on the disclosure of this
information. Particularly, section 70 of the FHSA Act creates an
offence punishable by 2 years imprisonment that is committed if a
person (including the Commissioner of Taxation and any public
servant employed at the Australian Tax Office) (a) makes a record
of protected information, or directly or indirectly divulges or
communicates protected information about another person; and (b)
the record is not made, or the information is not divulged or
communicated, for the purposes of the FHSA Act (or its associated
regulations).
The amendment in item 1 is
intended to prevent the situation where information is protected
from disclosure under both the ASIC Act and the FHSA Act. The
amendment will thus enable the sharing of information between
agencies for the purposes of the FHSA Act. A person employed at
ASIC who receives information that is given or produced under
section 70 of the FHSA Act must comply with the restrictions on
disclosure of that information contained in section 70.
Item 13 amends the definition
of protected information in section 18 of the FHSA Act to exclude
from the scope of the definition any protected document or
protected information within the meaning of section 56 of the APRA
Act, and information that is protected by section 127 of the ASIC
Act.[11] While the
amendment excludes information obtained directly by ASIC or APRA
from the definition of protected information in the FHSA Act, such
protected document or protected information will continue to be
covered (that is, protected from disclosure) by section 56 of the
APRA Act and section 127 of the ASIC Act.
Items 28 33 amend section 70
of the FHSA Act. Item 28 amends subsection 70(1)
(which sets out the persons covered by the section) to replace the
reference to a person otherwise appointed or employed by, or a
provider of services for, the Commonwealth with a reference to a
person who, because of his or her employment, or in the course of
that employment, has acquired protected information, other than an
employee of the body to which the information relates . The
amendment thus extends the range of persons to whom the section
applies.
Item 32 amends subsection
70(5), which protects a person to whom section 70 applies from
divulging protected information or producing a protected document
to a court except where necessary for the purposes of the FHSA Act
or regulations. The amendment removes reference to a protected
document . According to the Explanatory Memorandum, such reference
is superfluous .[12] Presumably, this is because a protected document would
fall within the definition of protected information , which
currently means information that (a) concerns a person and (b) is
disclosed to, or obtained by, a person to whom section 70
applies in the course of, or because of, the person s duties under
or in relation to the FHSA Act or the First Home Saver Account
Regulations.[13]
Item 33 inserts
proposed subsection 70(7A) into the FHSA Act to
authorise the Commissioner (and other persons) to divulge or
communicate protected information to APRA and to ASIC for the
purpose of allowing those entities to perform functions in relation
to FHSAs.
Item 38 amends subsection
16(4) of the ITAA 1936 to provide that the Commissioner of Taxation
(and other persons) do not breach the secrecy provisions of the
ITAA 1936 if he/she communicates any information to APRA or ASIC
for the purposes of those bodies performing functions in relation
to FHSAs.
Items 41 42 amend section 13J
of the Taxation Administration Act, which deals with the provision
of Commonwealth taxation information to State taxation authorities.
Subsection 13J(1) states:
(1) Notwithstanding anything in a secrecy
provision of a taxation law, the Commissioner may communicate
information disclosed or obtained under or for the purposes of a
taxation law to a State taxation officer for the purposes of the
administration of a State tax law if a State taxation officer is
authorised by law to communicate similar information to the
Commissioner.
Item 41 replaces the
reference to similar information in the last line of that
subsection with the phrase information obtained under the State tax
law . The amendment clarifies the existing provision, but also
makes the section more readily applicable to the FHSA Act by virtue
of the amendment contained in item 42.
Item 42 states that section 13J applies in
relation to the FHSA Act as if references in this section to a
State tax law include references to the First Home Owner Grant
Scheme Act 2000 (NSW) and other similar legislation enacted by
other States and Territories.
Items 2 3 of Schedule
2 to the Bill amends section 69 of the Banking Act
1959 (Banking Act), which deals with unclaimed moneys. The
term unclaimed moneys is defined for the purposes of the section to
mean:
all principal, interest, dividends, bonuses,
profits and sums of money legally payable by an ADI but in respect
of which the time within which proceedings may be taken for the
recovery thereof has expired, and includes moneys to the credit of
an account that has not been operated on either by deposit or
withdrawal for a period of not less than 7 years.
Item 2 inserts reference to
FHSAs into subsection 69(3) of the Banking Act, with the
effect that an ADI is not required to provide the Treasurer
with an annual statement of all sums of unclaimed moneys held in a
FHSA.
Item 4 amends subsection 3(3)
of the FHSA Act to provide that ASIC has general administration of
Division 2 of Part 7 and Part 4A of the FHSA Act. Division 2 of
Part 7 deals with the modified application of the
Superannuation Industry (Supervision) Act 1993 (the
Superannuation Industry Supervision Act). Part 4A deals
with unclaimed money and is to be inserted by item
25 of Schedule 2 to the Bill (see
below).
Items 5 9, 19 20 and
22 23, which also amend the FHSA Act, are largely
consequential upon the introduction of proposed sections
51B and 51C (see item 25 below), but some
simplify the language used in the existing provisions.
Item 12 inserts
proposed section 17A into the FHSA Act, which
defines unclaimed money as the balance of a FHSA to which no
contributions have been made, and from which no payments (other
than a payment of the kind mentioned in paragraphs 31(1)(f), (g)
and (h)) have been made for at least 7 years. The FHSA provider
must be unable to contact the FHSA holder at the end of that
period, despite making reasonable efforts to do so. Paragraphs
31(1)(f) and (g) authorise the FHSA provider to deduct an amount of
fees owing to the FHSA provider for providing the FHSA, and to pay
an amount owing to the Commonwealth in respect of overpayments of
Government FHSA contributions. Proposed paragraph
31(1)(h) is contained in item 2 of
Schedule 1.
Item 14 inserts the term
unclaimed money into section 18 of the FHSA Act, and defines it by
reference to section 17A (see item 12 of
Schedule 2 above).
Item 24 amends section 34 of
the FHSA Act, which provides that where a FHSA provider has
received a request from a FHSA holder, the FHSA provider must pay
the balance of a FHSA as a contribution to the FHSA holder s
superannuation fund. The proposed amendment inserts the requirement
that the FHSA provider must not have received a notice from the
Commissioner under subsection 67(2), or if he/she has received such
a notice, that it has been revoked. A notice under subsection 67(2)
states that the Commissioner is not satisfied that the FHSA holder
has a tax file number, and the action which the Commissioner
proposes to take in relation to the FHSA.
Item 25 inserts
proposed Part 4A Unclaimed money into the FHSA Act
and contains proposed sections 51A 51E. As stated
in the Explanatory Memorandum for the Bill, the unclaimed money
provisions will ensure that FHSA providers are not required to
service small, inactive accounts , thus easing the compliance
burden for providers.[14]
Proposed section 51A makes it
an offence for a FHSA provider not to provide a statement to ASIC
within 3 months after the end of a calendar year, if there is
unclaimed money in a FHSA provided by it at the end of a calendar
year. Proposed subsection 51A(3) authorises the
FHSA to disclose in the statement to ASIC details such as the FHSA
holder s name, address, account number, and the balance of the
account (ie the amount of unclaimed money). Proposed
subsection 51A(4) provides that if the FHSA provider has
made payments from the FHSA between the end of the calendar year
and the date of the statement, the statement must contain
information about those payments. A payment of the kind mentioned
in paragraphs 31(1)(f), (g) or (h) is not a relevant payment for
the purposes of this subsection (see above, particularly
item 2 of Schedule 1 and
item 12 of Schedule 2).
Proposed subsection 51B(1)
makes it an offence for a FHSA provider to give a statement to ASIC
under proposed section 51A if at the same time it
does not pay to ASIC an amount equal to the amount of unclaimed
money worked out under subsection (2) .
Proposed subsection 51B(3)
states that subject to proposed section 51C, upon
payment of the money to ASIC, the FHSA provider is discharged from
further liability in respect of that amount .
Proposed section 51C deals
with the situation where unclaimed money that a FHSA provider has
paid to ASIC under proposed section 51B is later
claimed by the FHSA holder (or the person s legal personal
representative). In that circumstance, the FHSA provider must seek
the return of the money from ASIC. Proposed subsection
51C(2) creates an offence where the FHSA provider has not
dealt with the money according to the FHSA holder s wishes within
30 days of receiving the money back from ASIC. Proposed
subsection 51C(3) deals with the situation where the FHSA
provider has paid more than the balance of the FHSA to ASIC.
Proposed subsection 51C(4) states that the
Consolidated Revenue Fund is appropriated for the purposes of
section 51C. Proposed section 51D authorises ASIC
to publish the information given to it in a statement under
subsection 51A(3) in an unclaimed money statement .
Proposed section 51E provides
that proposed sections 51A 51D are intended to
apply to the exclusion of any State or Territory law which requires
a FHSA provider to pay unclaimed money to a State or Territory (or
to its authority) or to lodge a return relating to unclaimed money.
Any relevant State or Territory law continues to exist ( the
Commonwealth Parliament has no authority to repeal State or
Territory legislation), but by dint of the operation of section 109
of the Commonwealth Constitution, such State or Territory laws
would be invalid to the extent of any inconsistency with the
proposed Commonwealth law.
Items 26 27 make minor
amendments to subparagraph 67(2)(c) of the FHSA Act, which deals
with the invalid quotation of a tax file number. The amendments are
consequential upon the passage of other items in the Bill.
Item 34 inserts
proposed subsection 114(2A) into the FHSA Act to
extend the modified application of the Superannuation Industry
Supervision Act to cover unauthorised trusts and trustees.
Item 36 of Schedule
2 inserts proposed section 123A, which
provides that a life insurance company or an ADI may by written
notice to APRA revoke a notice given under section 123 of the FHSA
Act if the company or ADI does not provide FHSAs or does not offer
to provide FHSAs. Section 123 creates an offence that is committed
if a life insurance company or ADI provides a FHSA or offers to
provide a FHSA if it has not previously informed APRA in writing of
its intention to provide FHSAs. The offence attracts a penalty of
120 penalty units, which is high compared to other offences in the
Bill (or indeed the FHSA Act) which attract a penalty of 50 penalty
units.[15]
Item 35 replaces the word informed in section
123 (quoted immediately above) with the word notified .
Item 37 inserts
proposed section 126A into the FHSA Act.
Proposed subsections 126A(1) and (2) authorise a
FHSA provider to provide information about the balance of a FHSA,
where the spouse (or his/her legal personal representative)
requests such information in an approved form. The spouse must
require the information to assist him/her to enter into a financial
agreement under Part VIIIA of the Family Law Act 1975
(which deals with financial agreements) or to assist the applicant
to obtain a court order under that Act (which would include an
order made by consent).
Proposed subsections 126A(3)
(5) contain offences that may be committed by a FHSA
provider. There is no fault element specified for any of the
physical elements of the offences (being intention, knowledge,
recklessness or negligence) although they are not specified to be
strict liability offences. However, subsection 5.6(1) of the
Criminal Code (which applies to offences under Commonwealth laws)
provides that if the law creating the offence does not specify a
fault element for a physical element that consists only of conduct,
intention is the fault element for the physical element .
Subsection 5.2(1) of the Criminal Code states that a person has
intention with respect to conduct if he or she means to engage in
that conduct .
In June 2008, the Scrutiny of Bills Committee
criticised the use of strict liability offences in the First Home
Saver Accounts Bill 2008, particularly the lack of any explanation
or justification for the imposition of strict liability
offences.[16] The
Explanatory Memorandum for the current Bill provides no such
information in relation to the proposed amendments/offences.
Proposed subsection 126A(3)
makes it an offence for a FHSA provider to not comply with an
application it has received from a spouse under section 126A.
Proposed subsection 126A(4) makes it an offence
for a FHSA provider, in response to an application made by a spouse
for information about the balance of a FHSA, to provide any address
(including a postal address) of the FHSA holder . Proposed
subsection 126A(5) makes it an offence for a FHSA provider
to inform the FHSA holder that the application has been made.
Under Commonwealth privacy law (such as
Information Privacy Principle 11, which sets out the limits on
disclosure of by a record-keeper of personal information held by
the record-keeper), the FHSA holder would ordinarily be entitled to
have access to records containing his/her personal information or
to have a say in the manner in which it is disclosed. However,
Information Privacy Principle 6 (set out in section 14 of the
Privacy Act 1988) provides:
Where a record-keeper has possession or control
of a record that contains personal information, the individual
concerned shall be entitled to have access to that record, except
to the extent that the record-keeper is required or authorised to
refuse to provide the individual with access to that record under
the applicable provisions of any law of the Commonwealth that
provides for access by persons to documents.
The Explanatory Memorandum states that the
prohibition on disclosure to a spouse of the FHSA holder, or the
fact that an application has been made by the spouse, is necessary
to protect the privacy of the FHSA holder and their spouse
.[17]
Proposed section 126B
prohibits certain uses of FHSAs. Proposed subsection
126B(1) states that a term of a contract or other
agreement providing for a charge (including a mortgage) over a FHSA
has no effect. Proposed subsection 126B(2) states
that rights to payments from a FHSA cannot be assigned .
Proposed subsection 126B(3) states that a FHSA
provider must not recognise a charge over a FHSA or an assignment
of rights to payments under a FHSA, with proposed
subsection 126B(4) making it an offence for a person to do
something that results in a contravention of proposed
subsection 126B(3).
Items 39 40 amend section 216
of the Life Insurance Act 1995, which deals with unclaimed
money held by a life company, so that FHSAs are treated in the same
way as retirement savings accounts.
Schedule 3 commences on 1
July 2009.
Item 1 of Schedule
3 inserts proposed subsection 7(4A) into
the Authorised Deposit-taking Institutions Supervisory Levy
Imposition Act 1998 (ADI Levy Act). Section 7 of the ADI
Levy Act contains the amount of levy payable by an ADI for a
financial year. The effect of proposed subsection
7(4A) is that the Treasurer, in determining by legislative
instrument under paragraph 7(3)(d) how an ADI s asset value is to
be worked out , must exclude an amount equal to the total balances
of all FHSAs provided by the ADI.
Items 2 5 of Schedule
3 amends sections 7 and 8 of the Financial
Institutions Supervisory Levies Collection Act 1998 to include
reference to a leviable FHSA body in the definitions of leviable
body and levy .
Item 6 inserts
proposed subsection 7(4A) into the Life
Insurance Supervisory Levy Imposition Act 1998 (Life Insurance
Levy Act). Section 7 of that Act is similar to section 7 of the ADI
Levy Act mentioned in item 1 of Schedule
3 above. Section 7 of the Life Insurance Levy Act contains
the amount of levy payable by a life insurance company for a
financial year. The effect of proposed subsection
7(4A) is that the Treasurer, in determining by legislative
instrument under paragraph 7(3)(d) how a life insurance company s
asset value is to be worked out , must exclude an amount equal to
the total balances of all FHSAs provided by the life insurance
company.
Item 1 of Schedule
4 amends proposed paragraph 126A(2)(a) of
the FHSA Act (see item 37 of Schedule
2 above) to include reference to Part VIIIAB of the Family
Law Act if that Part is enacted. Part VIIIAB is contained in the De
Facto Financial Matters Bill 2008 that is currently before the
Parliament and deals with financial matters relating to de
facto relationships. For details of proposed section
126A of the FHSA Act, see item 37 of
Schedule 2 above. If Part VIIIAB is enacted, the
FHSA Act will not have to be re-amended so as to apply to family
law matters between de facto and same sex
relationships.
As mentioned throughout this Digest, many of
the amendments contained in the Bill are of a minor but technical
nature. They predominantly insert references to FHSAs and
provisions in the FHSA Act into a number of relevant and related
Acts, particularly ones dealing with finance and taxation.
There are, however, several amendments which
make substantive changes to the law, but again these are not
particularly controversial and generally ensure consistency of
treatment of FHSAs with (for example) retirement savings
accounts.
Morag Donaldson
16 September 2008
Bills Digest Service
Parliamentary Library
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