The Government has delivered on its commitment to protect Australians’ hard-earned savings accounts with the passage of the Banking Laws Amendment (Unclaimed Moneys) Bill 2015 through the Parliament.
The Bill restores the time bank accounts and life insurance policies can be inactive, before they are transferred to government, from three to seven years.
This reverses a decision, made when Bill Shorten was Minister for Financial Services in 2012, to reduce the period of inactivity before funds can be transferred to the government to three years. This desperate cash grab by Labor resulted in $550 million from thousands of accounts being transferred to ASIC in 2012/13 - an almost eight-fold increase in collections in a single year.
The former Government’s change not only imposed large costs and inconvenience on those Australians that had to wait up to six months to reclaim their money, but also left many Australians financially distressed and unable to access their funds when they most needed them.
The Bill also ensures that personal details of account holders are better protected. For example, the provisions will not apply to children’s accounts so they are not transferred to government. Further, in response to community concerns about personal privacy and security, the Bill removes the requirement for ASIC to publish an Unclaimed Money Gazette which included an account holder’s name, last known address and the amount of money held by the government.
The Bill will also cut $36 million of red tape for business. For example, accounts in a foreign currency will be exempted as they are primarily used for business transactions.
There is currently around $700 million in lost bank accounts and life insurance policies. Australians can still access information about unclaimed accounts, free of charge, through the ASIC MoneySmart website.
These changes will protect Australian’s hard-earned savings, increase consumer privacy, and reduce red tape.