USE YOUR AUSTRALIAN BANK ACCOUNT OR LOSE YOUR MONEY!
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On 26/2/13 the Australian Financial Review ran a story advising that the period for a bank account to be declared “dormant” has reduced from seven years to three years. The article cites legislation passed last December.
By 31st March all authorised deposit taking institutions must lodge an unclaimed money return to ASIC showing accounts that have been dormant for seven years and by 31st May for accounts that have been dormant for three years. ASIC can then request the money in these accounts and it is the onus of the account owner to prove title to reclaim the money. This may take some time to process.
Whilst this is not strictly a financial services topic I thought that this change should be highlighted to our clients and friends. Accounts that appear to be targeted are child accounts, overseas holders’ accounts and trust accounts. Many leases require a bond or deposit to be held in a bank account and unless these accounts are regularly operated the money within could be confiscated. Entries relating to interest and fees are ignored when determining whether an account is dormant.
This move has been seen as a revenue raising tool by the Federal Government to rein in the deficit. We imagine that there will be a backlash by voters who have had their money taken from their bank account.
Thanks to Tony Lewis , Dayton Way Securities, Sydney.