||New definition of “preliminary remuneration and expenses” for a trustee’s work under a s 50 order
||This definition clarifies the fees and expenses a trustee can be paid for carrying on business in accordance with a s 50 order. This covers the time period after a bankruptcy notice is issued or a creditor’s petition is presented, but before a debtor becomes bankrupt.
||Judgment or order in foreign currency – Exchange rates
|| 12, 24
||Provisions relating to the conversion of foreign currency have been amended to reflect modern conversion practices i.e. using the Reserve Bank of Australia’s (RBA) exchange rates.
||Required an amount to be converted using outdated “elegraphic rates of exchange”.
||New provision guiding the lodgment of a proof of debt in a foreign currency
||Clarifies what a creditor must do in lodging a proof of foreign debt under s 84 of the Act. Requires a statement setting out the debt in foreign currency, the equivalent Australian amount (calculated using the RBA exchange rates two days before the date of bankruptcy), and a statement saying that the conversion was conducted in accordance with s 24 of the new Regulations.
|| No equivalent.
||Modernised list of exempt household property
||The list of household property, unavailable for the payment of debts, has been modernised. For example, the list now refers to a DVD player or similar appliance, a personal computer, and equipment providing internet access.
|| Regulation 6.03
||Transfers exempt from being void against the trustee
||Clarifies that a transfer, to which s 120(1) of the Act would otherwise apply, is not void if the costs of recovering the transferred property would, in the trustee’s opinion, exceed the value of the property to the transferor’s creditors. This makes an otherwise void transaction valid if, for example, the trustee must adopt unnecessarily expensive means to recover the transferred property.
|| Regulation 6.09
||Superannuation contributions which count as income
||Describes the type of superannuation contributions to be counted as a bankrupt’s income for the purpose of making a contribution assessment. To account for future changes to the percentage rate of an employee’s ordinary time earnings, s 34(2)(a) does not stipulate a particular amount but instead refers to any contributions which “exceed the relevant superannuation guarantee charge percentage of the employees’ ordinary time earnings”.
||Regulation 6.12B(2)(a) states that any superannuation contributions which exceed 9% of the employee’s ordinary time earnings be classified as income. However, this value increases each year in accordance with s 19(2) of the Superannuation Guarantee (Administration) Act 1992.
||Determining the income of a “dependant”
|| 36, 144
||The provision for determining the maximum income a person can earn before they are classified as a bankrupt’s ‘dependant’ has been amended to provide clear methods for determining a dependant’s prescribed income amount at the following times (i) before the new Regulations commence (ii) during the financial year that the new Regulations commence, and (iii) into the future according to indexation. Indexation has been changed from quarterly to annual, calculated in accordance with s 114 of the new Regulations. A trustee must calculate the income likely to be derived by a person over a contribution assessment period (CAP) (rather than a financial, or calendar, year).
||Regulation 6.15A provides a base income amount of $2,500, indexed quarterly in accordance with s 304A of the Act.
||Timing for filing a s 156A “consent to act” (CTA) instrument with the Official Receiver
Requires an instrument under s 156A(1) of the Act to be filed:
(a) on or before the day that a debtor presents their debtor’s petition, or
(b) before the day on which the Court makes a sequestration order.
|Existing Regulation 8.01 permits a trustee to file a CTA instrument with the Official Receiver up to 2 days after a sequestration order is made or “as soon as practicable” after a trustee signs the CTA. This may lead to administrative difficulties, such as the Official Trustee incurring interim expenses.
||Amended timeframe for notifying the Official Receiver of the termination of a Personal Insolvency Agreement (PIA)
||The trustee must give notice to the Official Receiver within two business days after termination of a PIA takes effect. But, the requirement for notice does not apply if the trustee is the Official Trustee, s 68(2).
||Existing subreg 10.12(1) and sch 8, Item 28A fail to provide a precise timeframe for a trustee to notify the Official Receiver that they have terminated a PIA in accordance with s 222A of the Act. This is problematic because failure to meet the required deadline is a strict liability offence under the existing Regulations.
||Information to be entered in the National Personal Insolvency Index (Index)
||Schedule 8 of the existing Regulations, has been significantly amended and is now contained within ss 75–79. These sections outline the obligation for documents to be given to the Official Receiver and obliges the Official Receiver to enter the information in those documents into the Index. The source of the obligation on the Official Receiver can come from the Act, the Regulations, or a trigger event.
||Schedule 8 fails to state the source of the obligation on the Official Receiver to enter information into the Index.
||Bankruptcy Notice Form
- Reflect the new RBA foreign currency exchange rate calculation method in s 12.
- Refers to “accompanying” final judgments and orders, rather than “attached” final judgments and orders. This reflects the lodgment of Bankruptcy Notices online and ensures the validity of online Notices.
|Schedule 1, less the new amendments
||Taxable value of car fringe benefits — Statutory formula
||Schedule 2, Item 3
||The statutory formula for calculating car fringe benefits has been simplified in line with changes to the Fringe Benefits Tax Assessment Act 1986. Schedule 2, Item 3, uses a flat rate of 20% to calculate car benefits, regardless of the number of kilometers travelled. This ensures consistency for trustees in calculating car fringe benefits in bankruptcy.
|| Schedule 4, Item 3
||Clarifying that certain offences do not apply to the Inspector-General, Official Trustee or Official Receiver
||52(1), 52(3), 70, 72
||Clarifies offences which do not apply to the Inspector-General, Official Trustee or Official Receiver, in particular where an obligation to provide information or documents is placed on those parties. The relevant provisions relate to the removal and appointment of trustees, and the provision of information from trustees to the Official Receiver and/or Official Trustee.
||Regulations 8.50(3)(a), 8.50(3)(b), 10.14, 12.01
These provisions fail to clarify offences which do not apply to the Inspector-General, Official Trustee or Official Receiver.
||Monetary figures subject to indexation
|| 26, 28, 30, 36
Makes it easier for trustees and debtors to calculate prescribed monetary amounts. Provisions include:
- 26 — Prescribing the maximum amount payable to an employee
- 28, 30 — Tools, and motor vehicles, respectively, which are not available for the payment of debts
- 36 — Income of a dependant for the purpose of a contribution assessment
These provisions provide clear methods for determining the prescribed amount (i) before the new Regulations commence (ii) during the financial year that the new Regulations commence and (iii) into the future using indexation.
| No equivalent.