Treasury is currently reviewing the Labor government’s controversial 2012 unclaimed money rules, which requires authorised deposit-taking institutions to transfer to the government all unclaimed money from accounts that have been inactive for three years (previously seven years). Life insurers must now transfer to the government all sums of money payable on the maturity of a policy which are not claimed within three years of the maturity date.
The rules include exemptions to the change in time period, such as children’s accounts, which are not affected unless they have been inactive for seven years. Term deposit accounts are also exempted.
Account holders can avoid their accounts becoming inactive by notifying their institution that they are aware of the account.
Details of unclaimed money transferred to the government is searchable on ASIC’s ‘MoneySmart’ website. Owners can reclaim their money at any time by contacting their bank or life-insurer.
The unclaimed money provisions are aimed at preserving the value of potentially ‘lost’ bank account and life insurance money. It is not clear however whether the changes strike a balance between re-uniting people with their money and increased regulatory and administrative costs to the industry.
The Treasury discussion paper lists three options: leaving the inactivity period at three years, extending it to five years; and putting it back to seven years.
Treasury is seeking input from stakeholders on what changes they believe could be made to better achieve this balance, including whether other types of accounts should be exempted.
Submissions are due by Friday 11 July.