Government grab for inactive bank accounts

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As of May this year any bank account which has not seen activity for three years can be transferred into the Government’s hands. Previously the account had to have been inactive for seven years, but the Federal Government rushed the legislation amendment through late last year in a bid to raise $109 million this financial year (it is unclear how they have arrived at this figure).

All authorised deposit taking institutions will have to submit a report on unclaimed money to the Australian Securities and Investments Commission (ASIC) for accounts which have been inactive for seven years by 31 March, and for three years by 31 May. These accounts will then be transferred to the Commonwealth via ASIC.

Accounts which are most likely to be affected are those which contain the bond for a rental property with a lease of longer than three years, savings accounts into which you are no longer making deposits, unclaimed superannuation, life insurance and trust funds. Hundreds of thousands of Australians own accounts which could be transferred to the Government under the amended legislation.

Banks are urging customers to make transactions on these accounts – adding or subtracting just $1 is enough to protect the account from ASIC. Interest payments, fees and charges are not considered transactions and will not prevent the balance of your account from being claimed.

The Government will continue to pay interest on all accounts claimed, so that their value remains the same. If your account is claimed and you discover it at a later date, you can reclaim the money if you can prove it is yours by filling out a form and writing to ASIC.

Find out more at ABC News or read the article in the Financial Review.

Opinion – The dummies guide to losing an election

I’m no politician, but even I know that taking people’s money is a stupid way to win an election. The Government did not consult the Australian Bankers Association (ABA) about the new three-year time limit – the figure appears to be an arbitrary one. Even as a Labor supporter, I am struggling to see this as anything but a desperate grab for money by a government which can’t live up to its (retracted) budget surplus promises.

If this was just about money which had been lost, such as superannuation accounts where the owner cannot be contacted, then I could understand (even condone) the action. But many of the accounts which are likely to be transferred belong to people who just haven’t realised their savings are about to be taken. The bank knows who that money belongs to and the Government knows who that money belongs to, so as far as I’m concerned it’s stealing.

Imagine you have been saving for a big purchase, perhaps a holiday. While you were working you were adding money to the account, but since you cut back you have simply been letting the interest accrue. Three years later you are ready to book your tickets, but when you go to pay for them you discover that your account has been transferrerd to the Commonwealth. You then have to spend months trying to reclaim your own money before you can even think about planning your trip.

Three years is, in my opinion, not long enough to call an account ‘unclaimed’ and I urge all of you to ensure you make at least one transaction on each of your accounts before March 31.

What do you think? Is this a practical way to use money which is just lying around, or has the Government crossed the line in its attempt to raise revenue? 

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78 Comments

Total Comments: 78
  1. 0
    0

    This Government is getting to ‘panic’ stages. It is not Governing it is trying to keep it’s head above water regarding it’s fiscal management of our Country. Swiping this money is to only make their bottom line look better and make Wayne Swan look better as well. Here again another stuff up and is likened to robbery, no matter whether they had anything passed in Parliament, it still amounts to robbery as they are not finding out why the account is inactive ie death, not because the person is as you say saving but because of the monetary turn down this Government has caused, one cannot put any more into that account. The fact that interest is being paid into the account may make some people think that this is enough to say the account is ‘active’ which technically it is because interest is being paid into the account.
    The latest is Ms. Gillard is coming out to Rooty Hill NSW to stay a week in a ‘hotel or motel’. It will not be the run of the mill accomodation. It will be 1st rate and by doing this she is trying to bond with the ‘westies’.
    Who does she think she is kidding. What a political stuff up. Swanning around Rooty Hill, Penrith, and other seats that they hold with a very small margin and which they are likely to lose is not going to endear her to the public. Been too many stuff ups that will not go away and will be bought up by the Opposition just before the election as a reminder to the Electorate of why not to give them another go governing this country. Changing hairstyles and putting spectacles on doesn’t change anything, just makes her look like a old style schoolteacher. Well it goes with everything else ie how she speaks, she doesn’t speak naturally, it is too stilted.
    8 months to the Election, Ms. Gillard should get back to Canberra and pretend to govern our country.
    BG

  2. 0
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    You may not br so dumb at this comment for losing an election perhaps the liberal govt or opposition as it is known probably thought the same thing and why it was allowed to pass through
    parliament after all I did not hear any great objections from Tony Abbot as is his usual.

    • 0
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      Actually Unicorn none of the Liberals voted for this legislation. They even tried on two occasions to have it amended. The 6 ‘yeah’ vote that got this legislation through were:
      Robert Oakeshott. Tony Windsor. Adam Bandt. Peter Slipper. Craig Thomson. Bob Katter.
      Always remember that Gillard’s bunch can’t survive without the Greens and the independant members.
      Read more about this Labor farce at:
      http://www.michaelsmithnews.com/2013/02/federal-government-to-raid-your-bank-account-after-36-months-of-no-transactions.html
      As for the $109million, well, they have got to get back some of the revenue that they have squandered in trying to buy votes, paying for a failed refugee policy, recouping losses from a miscalculated mining tax and the list goes on. Where did they get the figure of $109 million? Pick a number, any number. Ask Swanny. He’s a whip with figures. From a surplus to a massive unprecendented defecit in 7 years.
      I’m in the same boat as Lampster, so every so often a couple of $$ gets deposited.

  3. 0
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    This seems sensible to me. It was going to be “grabbed” as you put it, in a few years anyway, except that in 7 years, the Banks will have stolen most of it in fees and charges for doing nothing. Most people whose accounts fit this scenario have long since forgotten the money even existed, or it was too small to care about. They will receive notification of what’s about to happen and this will enable them to deal with it by adding more or withdrawing it. A storm in a teacup.

    • 0
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      Jen
      I missed this before I wrote my own tirade. You got it in one.

      Our corporate media supports BANK GREED and being Murdoch dominated (a yank now, who prints nothing but negatives against any party that is not the one of his choice – Liberal Party) he will print nothing but negatives about the Labor Party, especially if what they are doing removes money from the pockets of his friends in the banking industry.

    • 0
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      No worries, Mussitate. I see at least one paper says this legislation was “rushed through.” How long does it take to put through minor legislation? How fast is “rushed” and how slow is “slow”? A post for our current “Biased Media” topic.

    • 0
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      The Government says that you can have your money back – if you remember.

  4. 0
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    Okay I will mention our situation. I put away some money into a bank account for a future holiday, this was done in 2010, holiday is in 2015. The money wasn’t put into a fixed term deposit just in case we needed it for some emergency. Earning interest is not deemed as an activity or the charges. Suddenly I need the money for an emergency and hey presto its been moved to ASIC, so to prevent this I must deposit at least $1 as an activity.
    Government’s interfere in our affairs too much already, why don’t they just stick to trying to run the country. Unfortunately I am cynical with governments. There has to be something in it for them, and there is, a quick way to fill the coffers with again someone else’s money. To quote Maggie Thatcher “the problem with socialism is that you eventually run out of other people’s money” Don’t we know that!!!!!!!

    • 0
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      Well stated,a good example ‘The Lampster’. So if I am going to work offshore for a few years does this mean that I use offshore banking in a country where I can bank my money safely? If the bank was to claim the money after 3 years of inactivity it would surely be robbery. The only person who can close a bank account is the person who’s name it is in. Or that it can be proved beyond reasonable doubt and upon presentation of a death certificate that the account will never be active again. This must then be posted publicly so that any relative or person can make legal claim. Whether it is a bank account or Superannuation surely some effort to contact the person should be made and not taken for granted that it is not wanted?

  5. 0
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    Just think – would you rather the banks with their million dollar profit make more money on the short term money market or is it better to be used for the good of the country – there should definitely be a system where the owner of the account gets notified prior to the transfer – but they can still get it back eventually – (no I don’t vote labor) – maybe better if it was a 5 year term – it already happens to temporary visa superannuation holders btw

    • 0
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      Don’t care who you vote for Mary, you are a thinker.

      Since when did banks care a hoot about the average Australian with only small bank accounts.

      In some instances, as people above have taken great measures to point out, it may be inconvenient in some small instances BUT it is still better than having nothing in these SMALL accounts, when you finally wish to withdraw it.

  6. 0
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    Governments should leave individuals alone as long as they are law-abiding people. Plenty of people put money away for diverse reasons such as kids university (15 years away), emergency fund, holidays when long service elegibilty is achieved (10 years), etc. It is a nasty money-grab. This will encourage people to hide money under the mattress with all the inherent risks involved in such an activity.

    • 0
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      So Aloysius, you’d prefer the banks stole it in the guise of fees and charges?

    • 0
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      I am no fan of bank greed but that is not the issue. A bank is no longer a “safe” place to put your money as the Government will try to take it from you if you fail to be vigilant. This is akin to a communist government nationalising everything for its own benefit.

    • 0
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      But it’s ok for the Banks to take it from you?

      I’d be interested in what people would like done with the money that’s (mostly) abandoned in these accounts. Leave it there until the bank eats it all up, perhaps?

      BTW Aloysius, this is not new, the Government has been taking this money for years, the only change is, it’s happening sooner. Too soon perhaps? Maybe.

    • 0
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      Aloysius
      No it is not communism, Governments are the only safe place from the GREED of Corporate Capitalism – a system by which corporations become so powerful and with their control of media force government to do whatever they want.

      The USA has fallen to Corporate Capitalism ….. brought it to its knees by it.

      I think the current government are very brave and have fought continuously for us, the average Australian, against the might of our corporate media and other powerful corporations (banks, super funds, and mining to name just a few).

    • 0
      0

      You seem to be missing the point that it is my choice whether to use a bank or not. The Government is removing my right to choose unless I fall in within its unnecessary, overbearing regulation. Three years is “new”.

    • 0
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      All rights have to be measured by the overall public good and in this case, three years of inactivity is sufficient to save most peoples savings from being whittled away by greedy bankers.

      The exceptions, such as yourself, still have the option of putting in a dollar and then taking it back out. Your rights are in tact and other peoples funds are saved from the bankers. ALL GOOD.

    • 0
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      I do not consider the government (of any persuasion) to be the best judge of what is good for me. Communist governments believe they know better but the lot in our government have dubious claims to understand the lives of Aussies outside of the cocoon that they operate in.

  7. 0
    0

    This article is ILL researched and a bit amateurish.

    Lets all do what BANKS recommend and put a $1 into each of these accounts because THEY are ONLY concerned about their customers and don’t give a hoot about the billions in profit they make each year. Banks are wonderful institutions and CARE about us before anything else.

    Oh! Please…… some sanity! Small accounts that have no movements are GONE by seven (7) years!!!!!!!! Yes, BANK FEES EAT IT ALL UP. So the BANKS get your money (with some SMALL exceptions) – now isn’t that better than your government holding it for you WITHOUT FEES, so that it DOESN’T DISAPPEAR.

    Go on everyone …… give it to the banks and believe all the bullish**t our corporate media dishes out!

    We are talking about one section of the wealthy elite – corporate owned media, telling us to give (yes, basically HAND OVER) all our small accounts to another section of the wealthy elite – our banking system and NOT to have our government keep it out of their GREEDY little hands.

    BANKS have TOTAL control about the rules of your bank account and can CHANGE them at anytime (higher fees on dormant accounts could be introduced within a blink of the eye) and DON’T talk to me about market forces because our banking system is an OLIGOPOLY – which means it is just short of a MONOPOLY. Whereas, the GOVERNMENT has legislative requirements which are overseen by ASIC to keep your SMALL ACCOUNTS and MONEY SAFE without charge.

    PERSONALLY, given the crap interest you get, I would PREFER ALL, yes ALL my money to be in the hands of the government and accept a small amount of interest BUT I don’t have that opportunity.

    Come on people….. haven’t you learned from the MINING TAX that BIG BUSINESS or the ELITE WEALTHY, will print anything to get you to do what THEY won’t. They are treating you as if you are their patsies ….. show them you are NOT.

    • 0
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      Sorry about the rant……. just sick of our corporate owned media who represent the wealthy elite because they ARE the wealthy elite, leading everyone around by the nose.

      They can do this because Australians have been taught that our media is ‘free’ but the reality is that our media is controlled by the wealthy elite and they print and broadcast THEIR OWN VIEWS on what is GOOD for AUSTRALIA and AUSTRALIANS which ALWAYS boils down to MORE MONEY for THEM and LESS MONEY, SERVICES & INFRASTRUCTURE for US.

      That is why I vote any party EXCEPT Liberal because they are a party that was formed to represent the WEALTHY ELITE and it is their job with the help of their corporate owned media mates to convince us mugs to vote for them.

  8. 0
    0

    We received a letter from the CBA late last year concerning a small savings account my wife has. The letter alerted us to what the government’s intentions regarding an inactive account. My wife’s account had only been collecting interest every three months. Its growth was minimal. THERE ARE NO BANKS FEES CHARGED TO THIS ACCOUNT AS IT IS A PENSIONER ACCOUNT. Enquire at your local bank about such an account.
    However, to stop Treasurer Swan getting his hands on my wife’s account, we arranged for the CBA to direct debit monthly from our joint pensioner savings account, the grand amount of $5. Mr Swan and his mad hatter PM can go and jump in the nearest lake. No way would I allow this ALP mob to get another cent from us. Their history of economic failure is not only legendary, it is pure and simple fact. The sooner they are shown the door the better. Like Keating leaving Howard and Costello a huge black hole of debt, Gillard, Swan et.al are going to leave at this stage, a $15 billion black hole. Like Howard and Costello, it will take the new government come September 2013, at least nine years to pull the budget back into the black. And still Gillard is off making huge economic promises that will never be funded because the government is now broke. What are the Treasury advisors doing? Very little it seems.

    • 0
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      You do get interest from the new GOVERNMENT proposal you know. Given that the government interest will be based on the Reserve Bank figures, I should imagine they will be a tad higher than your bank interest. Your money is also safer…. the GFC (Global Financial Crisis) hasn’t finished just yet.

      Again, WHY would you support the GREEDY wealthy elite, rather than your own government??? Just look at what the GREEDY wealthy elite have done to the USA, they have brought a nation that no external force could touch, to its knees and this year will see this once mighty nation reel from even further blows.

      FACT – HOWARD WAS THE BIGGEST SPENDER OF ALL!!! What on, you might ask.. not services or infrastructure to the people of Australia …. no …… he GAVE it to private enterprise. For example a lot went to private schools and subsidising the private health insurance bodies.
      Great aye, creating two different forms of education and health… one for the ‘wealthy’ and one for the ‘others’ and then getting the ‘OTHERS’ to pay for it!!!!!!
      Now the question begs, WHERE did he get the extra money because he was JUST SHORT OF A DEFICIT when he left? Oh, yes that is right he reduced top level tax for the rich and introduced GST (a disgustingly inequitable tax) which hit every single person, whether they were pensioners, disabled, poor, disadvantaged. They all paid. Packer thought it was a great tax, so you know damn well it wasn’t good for the average person.

      If Abbott gets elected this tax will be increased and everyone will be hit again. It is a disgusting tax but if you vote for this clown, that is what you can expect.

      Additionally
      – An NBN that costs nearly as much as Labor’s NBN, that is not that much better than what we now have (although those select few that can afford a few thousand can upgrade to Labor’s NBN), will be a big actual cost to us the taxpayers…. whereas Labor’s NBN was a merely a LOAN that would have been repaid by 2034 and thereafter would actually MAKE MONEY for the Australian people.
      – University or tertiary education will revert to how much money you have instead of ability because the Uni system will be deregulated and student allowances/loans stopped. The only people able to afford Uni will be a handful of the wealthy elite AND greater numbers of overseas students will replace those Australians that have the ability but not the money.
      – Public school infrastructure and funding will decrease with an increase in private school funding.
      – Public health system will have funding decreased (by not increasing it) whereas private health systems will have funding actually increased.

      Can you see a pattern here…… yes, the Liberal Party represent the wealthy elite.

  9. 0
    0

    Mussitate. We are discussing the government ripping off people’s money. Not an ALP policy speech. Maybe you have a short memory. What happened to the $21 billion that Rudd/Gillard/Swan inherited? I’m not sure that Abbott will be any better managing the economy, but he couldn’t be any worse than what we are encountering now. Why all the crap about university fees, NBN, public/private school funding? We are discussing inactive bank accounts and the $109 million grab that Swan needs to try and pay the bills. Enough is enough. Despite your anti Howard and Abbott attitude, the country was never in the mess it is in now despite Howard’s short comings.

    • 0
      0

      robmur, we are not discussing the government ripping off people’s money because that is not what is happening. The government has been taking abandoned money from these accounts for years, the only change is that it’s happening a lot sooner (3 years as opposed to 7) which will save most people money. They will be notified as to what’s happening with their account and the owner of the account can decide whether to add to the account to keep it current, or close the account. Many wouldn’t have even remembered the existence of the account, so it will come as a pleasant surprise to those account holders. If the owner can’t be reached, the money will still be able to be claimed and it won’t have bank fees deducted as is happening in most cases, whilst left in the hands of the banks.

      The hysteria over this is becoming deafening.

    • 0
      0

      Don’t vote ALP robmur, but it is painfully obvious that you lad, are a Liberal supporter. Worth millions are we or simply believe what you are told… maybe had a small business and think you are one of the big boys?

      Abbott is a clown – he couldn’t even negotiate with independents to form a government, last time round because he was too arrogant and STUPID. Gillard has outflanked him on all occasions and provided good programs for Australians BUT you wouldn’t read or hear about it because our media only prints and broadcasts negatives on Gillard. Easy target…. she is a woman.

      Dear boy, you brought up politics – you can’t spit it out and then not expect it back again.

      It is NOT crap about deregulating Universities, NBN and getting the average Australian to foot the bill for the wealthy to send their kids to school or to get the best health care whilst the average Australian is turned away from the hospital from lack of beds. Fact.

      $109 million in the hands of our government – SAFE, ACCRUING INTEREST, NO FEES. Errr and that is bad! Better than MOST of that $109 million going into BANK COFFERS (with some minority exceptions) over a seven (7) year period, aye robmur!

    • 0
      0

      Oh! forgot….. this proves how our media have distorted the view of the average Australian.

      Australia is NOT in a mess. AUSTRALIA is economically and otherwise ON TOP OF THE WORLD. Yes, we are the most egalitarian, our wealth is more spread out over the population than any other country in the world which is why we have survived the GFC, no not survived…. flourished whilst other great countries are wallowing (USA UK Europe).

      With the help of Glen Stevens (Chairman, Reserve Bank) Australia has timed and made moves to put Australia on top of the world in Management of our Country and the GFC. We have done brilliantly under the current government!

      This government has fought to tax the wealthy to provide for the Average Australian but with Corporate Media representing those wealthy elite, this good thing has been presented as evil. Same as this issue of saving funds. Say no more.

    • 0
      0

      Seeing that Mussitate insists on changing the topic: Labor has delivered the four biggest Budget deficits in history with a cumulative value of $172 billion. If this is great government then we agree to disagree. Australia got throught the GFC through good luck and entrepreneurial effort by private enterprise. The good luck was owning resources that a thriving China wanted. Entrepreneurial effort involved selling it to China and the government coffers used this “windfall” to offset its wasteful expenditure and huge borrowings.

    • 0
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      No actually, Australia got through the GFC because we didn’t throw open the liaise fare or Market driven economics that the USA and UK and many other countries did. Another name for corporate capitalism, whereby large powerful corporations control our governments (suits in the shadows who are not democratically elected by control our destiny).
      Additionally, Australia is one of the most egalitarian country in the world whereby the wealth is spread out among all Australians, rather than like the USA where .1% own .99% of the wealth.
      Finally and very importantly, under guidance from Glen Stevens, chairman of Reserve Bank of Aust – brilliant economist and Rudd, who actually put in place VERY timely and solid short term, medium term and long term plans and projects to ensure our prosperity. These projects and plans were adopted by Gillard.

      This is another reason WHY the Labor party has a deficit…… it needed to ensure the well being of this country and took the steps when it had to, rather than drag their feet with indecision, like Abbott.

      By the way mining was only an aspect of our wealth, most of it goes overseas to foreign shareholders…… Now if it was nationalised, then the resources that belong to every Australian would stay in Australia and add totally to the wealth of all Australians. Just think about it….we would not have to pay taxes anymore and pensioners would get enough money to live on….ALL GOOD.

      Selling to China….. oh please, give me a break. Why weren’t you out there whinging about this sort of thing when the USA bought out most of our resources. In comparison, China owns nothing. That statement was a bit white supremacists, wasn’t it???

  10. 0
    0

    Hi Abby
    Being a pension myself, and I must say that majority of my friends are pensioners and they definitely will not be and very few have ever voted Labor.
    You go into the lower socio-economic areas where the majority rely on welfare then you find that they will vet Labor. I asked one person is this situation why they voted labor and it was because that was the only voting literature that they were handed at the polling booth she voted at. With a lot of people, they vote because they have to not because they want to. They can’t differentiate between State and Federal Politics and end up voting for the person, not the policies.

    • 0
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      gerberry1

      No different from yourself really. They get handed out brochures for Labor and you get handed out information from corporate owned newspapers and television for Liberal.

      The people from the ‘lower socio-economic areas’ are probably smarter than you think. They are not conned into voting for a party that represents the wealthy elite.

      If you are not earning over $500,000 a year then by voting for Liberal, you are just playing the mugs game and voting for the wealthy elite to pay less taxes and for you to get less services and virtually no infrastructure.

      Going back to the education of the ‘lower socio-economic areas’ – the lowering of our education standards is ensured when you pour more of our taxpayers dollars into private education, rather than public education. Intelligence has nothing to do with how well you are educated, it is all to do with money.

      You say that most people vote for the person and not the policies….this I have to agree with you. Liberals have close to zero policies in place (other than support the wealthy wherever and whenever possible) but they still get lots and lots of mugs voting for them.

      So when it all boils down…… who is more intelligent.

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