Inactive bank accounts to be raided by ASIC
(01 March 2013 – Australia) The Australian Federal Government has passed legislation to recover up to A$109 million from inactive bank accounts.
From 31 May, the government will be able to transfer all money from accounts that have not been used for three years into their own revenues.
This will mean that accounts with anything from A$1 upwards that have not had any deposit or withdrawals in the past three years will be transferred to the Australian Securities and Investment Commission (ASIC).
The law is forecast to raise A$109 million this year as inactive accounts for three years or more are raided by Treasury.
Experts warn this will have a negative impact on people that may have put money away in a special account for their children's education or decided to put an inheritance in a separate account for a rainy day.
The previous legislation allowed for bank accounts to remain inactive for up to 7 years before the money was transferred to ASIC.
Australian Bankers Association Chief Executive Steven Munchenberg said there is no benefit for consumers from the changes.
'It is very hard to see why this needed to be rushed through but there have been suggestions it was done more for the government's own financial circumstances rather than customers needs,' he said.
Munchenberg warned that unaware customers face having accounts frozen and could face months of delays trying to reclaim their own money from ASIC.
This cash grab comes as economists warn the government is on track to hand down a A$15 billion budget deficit in May as company tax receipts collapse.
This will mean that accounts with anything from A$1 upwards that have not had any deposit or withdrawals in the past three years will be transferred to the Australian Securities and Investment Commission (ASIC).
The law is forecast to raise A$109 million this year as inactive accounts for three years or more are raided by Treasury.
Experts warn this will have a negative impact on people that may have put money away in a special account for their children's education or decided to put an inheritance in a separate account for a rainy day.
The previous legislation allowed for bank accounts to remain inactive for up to 7 years before the money was transferred to ASIC.
Australian Bankers Association Chief Executive Steven Munchenberg said there is no benefit for consumers from the changes.
'It is very hard to see why this needed to be rushed through but there have been suggestions it was done more for the government's own financial circumstances rather than customers needs,' he said.
Munchenberg warned that unaware customers face having accounts frozen and could face months of delays trying to reclaim their own money from ASIC.
This cash grab comes as economists warn the government is on track to hand down a A$15 billion budget deficit in May as company tax receipts collapse.
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