At the end of last year the Government passed legislation that will allow the ASIC to claim any money in bank accounts, which have not been active in the previous three years.
This new legislation will come into effect on the 31/05/2013. Once claimed, the ASIC will pass the fund on to the Government who will include it in general revenue.
Previously this rule applied after 7 years, the rule was changed without consultation with the banks and is estimated that it will raise over $100 million dollars in this financial year.
It will affect all accounts, which have not had any activity on them in the past three years, transactions such as fees and interest do not constitute activity.
The good news is that if one of your accounts is taken you are able to claim it back if you can prove that you own the account and complete the required forms.
The new law comes into effect at the end of May and banks are advising customers to make transactions as small as a dollar to ensure they are not transferred to ASIC.
Australian Bankers Association chief executive Steven Munchenburg says many accounts will be affected.
"If you've put some money away to save for the future and you're not adding any more deposits to that, and if you've got trust accounts where money is being held for some reason in the future, if you've got bond money for example where you're a landlord and the tenant's bond money is sitting in an account for more than three years, any of those sorts of those accounts, and the banks are obliged to move the money to the Government," he said.
The general feeling is that this is merely a cash grab as there is no real structure around changing the term from 7 years to 3 years. It does however mean that you should check you accounts and close the ones, which you do not need and ensure that the rest are active. Prevention is better than a cure.
For our clients the accounts that this could affect:
- Term Deposits, which you just let roll over
- Trading accounts use to purchase shares
- Accounts held on behalf of children
- Trust accounts holding bond money or the initial settlement fund for the trust
Now is the time to tidy up your bank accounts.