FIRST HOME SAVER ACCOUNTS BILL 2008

i First Home Saver Accounts Bill 2008 No. , 2008

Contents

Part 1--Preliminary

Division 1--General

Short title ............................................................................................ 1

Commencement .................................................................................. 1

General administration of Act ............................................................ 2

Application of Act not to be excluded or modified ............................ 2

Act extends to external Territories ..................................................... 2

Crown to be bound.............................................................................. 2

Division 2--Simplified outline

Simplified outline ............................................................................... 3

Part 2--Key concepts and other definitions

Division 1--Key concepts

Meaning of FHSA ............................................................................... 5

Meanings of hold and FHSA holder ................................................... 5

Meanings of provide and FHSA provider........................................... 5

Meanings of Government FHSA contribution and personal

FHSA contribution.............................................................................. 6

Meaning of qualifying interest in a dwelling...................................... 7

Meaning of main residence ................................................................ 8

Meaning of FHSA home acquisition payment .................................... 8

Meaning of FHSA eligibility requirements......................................... 8

Meaning of FHSA ineligibility payment ............................................. 9

Meaning of FHSA payment conditions ............................................... 9

Division 2--Other definitions

Definitions ........................................................................................ 12

Part 3--Eligibility, contribution and payment rules

Division 1--Eligibility rules

Obligation of FHSA provider in opening or issuing FHSA ............. 18

FHSA holder must notify provider if he or she does not

satisfy the FHSA eligibility requirements ........................................ 19

Commissioner must notify provider if reason to believe that

certain circumstances exist ............................................................... 20

FHSA provider to close inactive FHSA ........................................... 20

Inactive FHSA .................................................................................. 21

Default superannuation plan ............................................................. 22

First Home Saver Accounts Bill 2008 No. , 2008 ii

Division 2--Contributions to FHSAs

Limit on contributions to FHSAs--account holder aged 65

or over ............................................................................................... 24

Limit on contributions to FHSAs--inactive FHSA.......................... 24

Limit on contributions to FHSAs--holder in breach of

account balance cap .......................................................................... 25

Breach of account balance cap ......................................................... 26

Account balance cap ......................................................................... 27

Indexation of account balance cap.................................................... 27

Division 3--Restrictions on payments from FHSAs

FHSA provider must not make payment from FHSA unless

authorised by law etc. ....................................................................... 29

Division 4--Requirements to make payments from FHSAs

Payment from FHSA for purposes of acquiring a home .................. 31

Payment from FHSA if FHSA holder aged 60 or over .................... 32

Payment of FHSA balance as contribution to superannuation ......... 32

Payment of FHSA balance as transfer to another FHSA.................. 33

Part 4--Government FHSA contributions

Division 1--Eligibility for and amount of a Government FHSA

contribution

Whether a Government FHSA contribution is payable .................... 34

Notification of eligibility status ........................................................ 34

Amount of Government FHSA contribution .................................... 35

Government FHSA contribution threshold....................................... 35

Indexation of Government FHSA contribution threshold ................ 35

Division 2--Payment of Government FHSA contribution

Commissioner's determinations ....................................................... 37

Payment of Government FHSA contribution ................................... 37

Providers to return Government FHSA contribution in

certain circumstances ........................................................................ 38

Government FHSA contribution increased by interest

amount if paid late in certain circumstances..................................... 39

Commissioner to notify if Government FHSA contribution

paid ................................................................................................... 39

Division 3--Underpayments of Government FHSA contribution

Underpayment determinations.......................................................... 40

Providers to return underpaid amounts in certain

circumstances .................................................................................... 41

iii First Home Saver Accounts Bill 2008 No. , 2008

Government FHSA contribution increased by interest

amount if underpaid amount paid late in certain

circumstances .................................................................................... 41

Small underpayments paid by cheque .............................................. 42

Division 4--Overpayments of Government FHSA contribution

Recovery of overpayments ............................................................... 43

Small overpayments.......................................................................... 45

Part 5--Administration

Division 1--General

When general interest charge payable .............................................. 46

Decisions under Part 4 to be in writing ............................................ 47

Commissioner may arrange for use of computer programs to

make decisions under Part 4 ............................................................. 47

Approved forms approved by Commissioner................................... 47

Division 2--Tax file numbers

Subdivision A--Quotation, use and transfer of FHS A holder's tax

file number

FHSA holder or applicant may quote tax file number ...................... 48

FHSA provider may request FHSA holder's or applicant's

tax file number .................................................................................. 48

FHSA provider must request FHSA holder to quote tax file

number if not quoted previously....................................................... 48

No obligation to quote tax file number ............................................. 49

Use of tax file number for certain purposes...................................... 49

FHSA provider must inform other FHSA provider or

superannuation provider of tax file number for certain

purposes ............................................................................................ 51

Subdivision B--Method of quotation of tax file numbers,

including deemed quotation

Method of quoting tax file number ................................................... 52

FHSA holder taken to have quoted where Commissioner

gives notice ....................................................................................... 53

Information provided by FHSA provider taken to have been

provided by FHSA holder................................................................. 53

FHSA holder or applicant taken to have quoted if he or she

quoted for other purposes ................................................................. 53

Subdivision C--Incorrect quotation of tax file number

Effect of mistaken quotation of tax file number ............................... 54

Effect of invalid quotation of tax file number .................................. 54

Subdivision D--Provision of tax file numbers in forms etc.

First Home Saver Accounts Bill 2008 No. , 2008 iv

Forms etc. may require tax file number............................................ 55

Failure to quote tax file number........................................................ 56

Division 3--Secrecy

Secrecy.............................................................................................. 57

Division 4--Review of decisions

Subdivision A--Review of Commissioner decisions relating to

Government FHS A contributions

Review of decisions .......................................................................... 60

Authorised review officers ............................................................... 60

Withdrawal of review applications ................................................... 60

Subdivision B--Review of certain APRA decisions

Reviewable decision ......................................................................... 61

Review of certain decisions .............................................................. 62

Statements to accompany notification of decisions .......................... 63

Part 6--Enforce ment

Division 1--Information gathering

Commissioner may require person or legal representative to

give information................................................................................ 65

Commissioner may require FHSA provider to give

information ....................................................................................... 66

Self-incrimination ............................................................................. 67

Division 2--Access to premises

Appointment of authorised persons .................................................. 68

Powers of authorised person in relation to premises ........................ 68

Obligations of authorised persons--all cases ................................... 69

Obligations of authorised persons--entry by consent ...................... 69

Obligations of authorised persons--entry by warrant ...................... 69

Obstruction of authorised person acting under a warrant ................. 70

Persons to assist authorised persons acting under a warrant ............ 70

Issue of warrant to enter premises .................................................... 71

Identity cards .................................................................................... 72

Part 7--Prudential provisions

Division 1--Authorisation of RSE licensees as FHSA providers

Subdivision A--Applying for authorisation as FHS A provider

RSE licensee applications for authorisation as FHSA

providers ........................................................................................... 73

APRA may request further information ........................................... 73

Period within which application is to be decided ............................. 74

v First Home Saver Accounts Bill 2008 No. , 2008

Subdivision B--Grant of authorisation as FHSA provider

Grant of authorisation as FHSA provider ......................................... 74

Capital requirements ......................................................................... 75

Documents required to bear ABN .................................................... 76

When an authorisation is in force ..................................................... 76

APRA to give notice of refusal of applications ................................ 77

Subdivision C--Conditions on authorisation as FHS A provider

Conditions imposed on all authorisations......................................... 77

Additional conditions imposed by APRA on individual

authorisations .................................................................................... 78

Directions to comply with conditions on authorisation .................... 79

Subdivision D--Variation or revocation of condition on

authorisation as FHSA provider

100

Applications for variation or revocation of condition on

authorisation as FHSA provider ....................................................... 79

101

APRA may request further information ........................................... 80

102

Period for deciding applications ....................................................... 80

103

APRA may vary or revoke conditions on authorisation--in

accordance with application ............................................................. 81

104

APRA may vary or revoke conditions on authorisation--on

its own initiative ............................................................................... 82

105

Notification of APRA's decisions under this Division..................... 83

106

When variations or revocations come into force etc. ....................... 83

Subdivision E--Cancelling authorisation as FHS A provider

107

Cancellation of authorisation as FHSA provider.............................. 84

108

Cancellation of authorisation for FHSA provider that is

financial services licensee................................................................. 84

109

APRA may allow authorisation as FHSA provider to

continue in effect .............................................................................. 85

Subdivision F--Offences and self-incrimination

110

Providing an FHSA while unauthorised etc. .................................... 85

111

Failing to notify breach of condition on authorisation ..................... 86

112

Not complying with direction to comply with condition on

authorisation ..................................................................................... 87

113

Breach does not affect validity of issue of FHSA etc....................... 87

Division 2--Application of the Superannuation Industry

(Supervision) Act 1993

114

Modified application of the Superannuation Industry

(Supervision) Act 1993 ..................................................................... 88

115

Provisions of the Superannuation Industry (Supervision) Act

1993 that do not apply ...................................................................... 89

First Home Saver Accounts Bill 2008 No. , 2008 vi

116

General modifications of applicable provisions of the

Superannuation Industry (Supervision) Act 1993 ............................. 89

117

References to Prudential Standards .................................................. 90

118

Persons who may be appointed to be custodians of FHSA

trusts--approved guarantee etc......................................................... 91

119

Transfer of FHSA trusts.................................................................... 91

120

Covenants to be included in governing rules--investment

management ...................................................................................... 91

Division 3--Prudential Standards

121

Prudential Standards ......................................................................... 93

122

Notice of determination, variation or revocation of certain

Prudential Standards ......................................................................... 94

Division 4--Other prudential provisions

123

Requirement for ADIs and life insurance companies to notify

APRA of intention to provide FHSAs .............................................. 95

124

Obligations of FHSA providers in relation to certain life

policies .............................................................................................. 95

125

Protection for small balances ............................................................ 96

Part 8--Miscellaneous

126

Annual reports .................................................................................. 98

127

Civil immunity where defendant was complying with this

Act..................................................................................................... 98

128

Payment out of a fund in accordance with the Bankruptcy

Act 1966 ............................................................................................ 98

129

Compensation for acquisition of property ........................................ 99

130

State insurance .................................................................................. 99

131

Regulations ....................................................................................... 99

Part 1 Preliminary

Division 1 General

Section 3

2 First Home Saver Accounts Bill 2008 No. , 2008

3 General administration of Act

(1) The Commissioner has the general administration of the following

provisions of this Act:

(a) Part 3;

(b) Part 4;

(d) Part 6.

(2) APRA has the general administration of the following provisions

of this Act:

(a) Subdivision B of Division 4 of Part 5;

(b) Part 7 (subject to subsection (3).

(3) ASIC has the general administration of Division 2 of Part 7 of this

Act, to the extent that section 6 of the Superannuation Industry

(Supervision) Act 1993 (as that section applies under subsection

114(2) of this Act) confers powers and duties on ASIC.

4 Application of Act not to be excluded or modified

This Act applies in relation to an FHSA despite any provision in

the terms and conditions of the FHSA, including any provision that

purports to substitute, or has the effect of substituting, the

provisions of the law of a State or Territory or of a foreign country

for all or any of the provisions of this Act.

5 Act extends to external Territories

This Act extends to every external Territory.

6 Crown to be bound

(1) This Act binds the Crown in each of its capacities.

(2) This Act does not make the Crown liable to be prosecuted for an

offence.

Preliminary Part 1

Simp lified outline Division 2

Section 7

First Home Saver Accounts Bill 2008 No. , 2008 3

Division 2--Simplified outline

7 Simplified outline

The following is a simplified outline of this Act:

This Act provides for first home saver accounts, or

FHSAs, to be offered by certain financial institutions.

It deals with who is eligible to hold an FHSA, limits on

contributions to FHSAs and when payments can be made

from an FHSA.

Provision is made for an annual Government contribution

to be paid to an FHSA if certain conditions are met.

Payments from FHSAs are subject to conditions under this

Act, such as a requirement to use a payment towards the

purchase of a first home.

Failure to comply with the payment conditions can make a

person liable to FHSA misuse tax under the Income Tax

Assessment Act 1997. The tax may also apply if the person

holds an FHSA while ineligible to do so.

This Act also provides for the approval of entities that can

offer FHSAs (other than ADIs and life insurance

companies) and for the supervision of the FHSA business

of those entities.

The general prudential supervision of ADIs and life

insurance companies that offer FHSAs is not dealt with in

this Act, but is dealt with instead under the Banking Act

1959 and the Life Insurance Act 1995.

FHSAs are also subject to concessional treatment in

respect of income tax and social security benefits. This

Key concepts and other definitions Part 2

Key concepts Division 1

Section 8

First Home Saver Accounts Bill 2008 No. , 2008 5

Part 2--Key concepts and other definitions

Division 1--Key concepts

8 Meaning of FHSA

An individual's account, life policy or beneficial interest in a trust

is an FHSA (short for first home saver account) if:

(a) it is described as an FHSA; and

(b) it is opened or issued on or after 1 October 2008 (or a later

day (if any) specified in the regulations); and

(i) an account to which an ADI accepts, or has accepted,

contributions; or

(ii) a life policy issued by a life insurance company; or

(iii) a beneficial interest in a trust constituted by a deed, the

trustee of which holds an authorisation as an FHSA

provider.

9 Meanings of hold and FHSA holder

(1) A person holds an FHSA if:

(a) for an FHSA that is an account--the account is opened solely

in the person's name; or

(b) for an FHSA that is a life policy--the person is the sole

owner of the life policy; or

person is the sole holder of the interest.

(2) A person who holds an FHSA is an FHSA holder.

10 Meanings of provide and FHSA provider

(1) An entity provides an FHSA if:

(a) for an FHSA that is an account--the entity is the ADI that

accepts, or has accepted, contributions to the account; or

Part 2 Key concepts and other definitions

Division 1 Key concepts

Section 11

6 First Home Saver Accounts Bill 2008 No. , 2008

(b) for an FHSA that is a life policy--the entity is the life

insurance company that provides the policy; or

is the trustee of the trust.

(2) An entity that provides an FHSA is an FHSA provider.

11 Meanings of Government FHSA contribution and personal FHSA

contribution

(1) A contribution to an FHSA or other payment by the Commissioner

that is payable under Part 4 of this Act for a person is a

Government FHSA contribution of the person.

(2) A contribution that a person makes, or that is made for the benefit

of the person, to an FHSA held by the person is a personal FHSA

contribution of the person (unless the contribution is a

Government FHSA contribution of the person).

(3) However, a contribution to an FHSA held by a person is not a

personal FHSA contribution of the person if:

(a) the contribution is by way of transfer to the FHSA from

another FHSA held by the person; or

(b) the contribution is made because of a family law obligation;

(i) an FHSA home acquisition payment was previously

made from an FHSA held by the person;

(ii) the payment satisfies the FHSA payment conditions

because of subsection 17(3) (recontribution of FHSA

home acquisition payment after failure to occupy a

dwelling);

(iii) the contribution to the FHSA is by way of a

recontribution of the FHSA home acquisition payment;

(d) the payment is repaid from the FHSA in accordance with:

(i) subsection 25(2), 26(2) or 27(2); or

(ii) subsection 992A(4) (unsolicited offer of financial

product), section 1016F (defective product disclosure

Key concepts and other definitions Part 2

Key concepts Division 1

Section 12

First Home Saver Accounts Bill 2008 No. , 2008 7

document) or section 1019B (cooling-off period) of the

Corporations Act 2001.

12 Meaning of qualifying interest in a dwelling

(1) A person holds a qualifying interest in a dwelling if the person is

the legal owner of the dwelling (whether alone or together with

others).

(2) Without limiting the scope of subsection (1), a person holds a

qualifying interest in a dwelling if:

(a) the person is a lessee or licensee (whether alone or together

with others) under a lease or licence that gives the person

reasonable security of tenure over the dwelling; and

(b) in the case of a lease--the lease is a Crown lease (within the

meaning of the Income Tax Assessment Act 1997); and

Commonwealth, a State or a Territory.

(3) Without limiting the scope of subsection (1), a person holds a

qualifying interest in a dwelling if:

(a) the person holds an equity of redemption in respect of the

dwelling; or

(b) where the dwelling is a flat or home unit--the person is the

legal owner of a share that:

(i) is in a company that is the legal owner of the land on

which the flat or home unit is erected; and

(ii) gives the person a right to occupy the flat or home unit;

village--the person holds a right for him or her to occupy the

dwelling.

(4) A person also holds a qualifying interest in a dwelling if

circumstances exist as specified in regulations made for the

purposes of this subsection.

(5) Despite anything else in the section, a person does not hold a

qualifying interest in a dwelling if:

(a) the dwelling is not fixed to land; or

Part 2 Key concepts and other definitions

Division 1 Key concepts

Section 13

8 First Home Saver Accounts Bill 2008 No. , 2008

(b) circumstances exist as specified in regulations made for the

purposes of this paragraph.

(6) A person acquires a qualifying interest in a dwelling when he or

she starts to hold a qualifying interest in the dwelling.

13 Meaning of main residence

(1) Subject to this section, a reference in this Act to a person's main

residence has its ordinary meaning.

(2) The regulations may specify circumstances in which a dwelling is a

person's main residence for the purposes of this Act.

(3) The regulations may specify circumstances in which a dwelling is

not a person's main residence for the purposes of this Act.

14 Meaning of FHSA home acquisition payment

A payment from an FHSA is an FHSA home acquisition payment

if the FHSA provider must make the payment under section 32

(payments for the purposes of acquiring a qualifying interest in a

dwelling).

15 Meaning of FHSA eligibility requirements

(1) A person meets the FHSA eligibility requirements if:

(a) the person is an individual; and

(b) the person is aged at least 18 years and under 65 years; and

in Australia or Norfolk Island at a time when the dwelling

was the person's main residence; and

(d) the person has never held an FHSA when the person was

aged less than 18 years; and

(e) either:

(i) the person has never held more than one FHSA at a

time; or

(ii) the person has held 2 FHSAs at a time, and the balance

of one of the FHSAs was transferred to the other FHSA

as the initial contribution to the other FHSA; and

Key concepts and other definitions Part 2

Key concepts Division 1

Section 16

First Home Saver Accounts Bill 2008 No. , 2008 9

(f) either:

(i) the person has never held an FHSA that was closed; or

(ii) the requirement in subsection (2) is met for each FHSA

that the person has held that was closed; and

(g) the person meets the requirements (if any) specified in the

regulations.

(2) The requirement in this subsection is met for an FHSA if:

(a) the FHSA was closed following an FHSA home acquisition

payment that met the FHSA payment conditions in

subsection 17(3) (recontribution to an FHSA after failure to

occupy a dwelling); or

(b) the FHSA was closed following an FHSA home acquisition

payment, and it is still possible for the payment to meet the

FHSA payment conditions in subsection 17(3); or

accordance with subsection 992A(4) (unsolicited offer of

financial product), section 1016F (defective product

disclosure document) or section 1019B (cooling-off period)

of the Corporations Act 2001.

16 Meaning of FHSA ineligibility payment

A payment from an FHSA held by a person is an FHSA

ineligibility payment if:

(a) the payment is an FHSA home acquisition payment; and

(b) the person did not satisfy the FHSA eligibility requirements

when the payment was made.

Note:

This Act does not provide for the consequences of the payment being

an FHSA ineligibility payment. However, the FHSA holder will be

liable for FHSA misuse tax in accordance with Subdivision 345-C of

the Income Tax Assessment Act 1997.

17 Meaning of FHSA payment conditions

(1) An FHSA home acquisition payment satisfies the FHSA payment

conditions if:

(a) no later than 6 months after the payment is made, the person

who holds or held the FHSA uses an amount equal to the

Part 2 Key concepts and other definitions

Division 1 Key concepts

Section 17

10 First Home Saver Accounts Bill 2008 No. , 2008

payment in acquiring a qualifying interest in a dwelling in

Australia or Norfolk Island; and

(b) the dwelling is the person's main residence for a continuous

period that:

(i) is at least 6 months long; and

(ii) starts within the period mentioned in subsection (2); and

payment is made--that construction is complete within a

reasonable period after the payment is made.

(2) The period:

(a) starts:

(i) if the construction of the dwelling is not complete when

the payment is made--when the construction of the

dwelling is complete; or

(ii) otherwise--when the person acquires the qualifying

interest in the dwelling; and

(b) ends 12 months after the period starts, or at a later time that

the Commissioner considers reasonable in the circumstances.

(3) An FHSA home acquisition payment also satisfies the FHSA

payment conditions if:

(a) the person who holds or held the FHSA fails to satisfy the

conditions in subsection (1); and

(b) within 6 months after the payment was made, the person

contributes to an FHSA held by the person:

(i) an amount equal to the payment; or

(ii) a lesser amount that is reasonable to pay in the

circumstances.

(4) For the purposes of subparagraph (3)(b)(ii), in determining whether

it is reasonable to pay a lesser amount in the circumstances, have

regard to:

(a) whether the failure to satisfy the conditions in subsection (1)

was beyond the person's control; and

(b) whether that failure was reasonably foreseeable by the

person; and

Part 2 Key concepts and other definitions

Division 2 Other definitions

Section 18

12 First Home Saver Accounts Bill 2008 No. , 2008

Division 2--Other definitions

18 Definitions

In this Act:

ABN (short for Australian Business Number) has the meaning

given by section 41 of the A New Tax System (Australian Business

Number) Act 1999.

account balance cap has the meaning given by section 29.

acquire: a person acquires a qualifying interest in a dwelling in the

circumstances mentioned in subsection 12(6).

ADI (short for authorised deposit-taking institution) means a body

corporate that is an ADI for the purposes of the Banking Act 1959.

approved form means a form approved by the Regulator, in

writing, for the purposes of the provision in which the expression

appears.

APRA means the Australian Prudential Regulation Authority.

ASIC means the Australian Securities and Investments

Commission.

authorisation as an FHSA provider means an authorisation

granted under section 92.

authorised person means a person appointed as an authorised

person under section 80.

base interest rate for a day has the same meaning as in

section 8AAD of the Taxation Administration Act 1953.

breach: an FHSA holder is in breach of the account balance cap in

the circumstances mentioned in section 28.

Commissioner means the Commissioner of Taxation.

Key concepts and other definitions Part 2

Other defin itions Division 2

Section 18

First Home Saver Accounts Bill 2008 No. , 2008 13

complying superannuation plan has the same meaning as in the

Income Tax Assessment Act 1997.

contribution means a contribution of money, and includes a

deposit into an account held at an ADI and a payment of a

premium to a life insurance company.

data processing device means any article or material (for example,

a disc) from which information is capable of being reproduced with

or without the aid of any other article or device.

decision includes a decision not to make a determination under

section 41 or 46.

deed includes an instrument having the effect of a deed.

default superannuation plan has the meaning given by section 24.

Deputy Commissioner means a Deputy Commissioner of Taxation.

examinable documents means any documents relevant to the

operation of a provision of this Act for which the Commissioner

has the general administration, or regulations made for the

purposes of such a provision.

family law obligation means:

(a) a court order under the Family Law Act 1975; or

(b) a financial agreement made under Part VIIIA of the Family

Law Act 1975 that is binding because of section 90G of that

Act.

FHSA (short for first home saver account) has the meaning given

by section 8.

FHSA eligibility requirements has the meaning given by

section 15.

FHSA holder has the meaning given by section 9.

FHSA home acquisition payment has the meaning given by

section 14.

FHSA ineligibility payment has the meaning given by section 16.

Part 2 Key concepts and other definitions

Division 2 Other definitions

Section 18

14 First Home Saver Accounts Bill 2008 No. , 2008

FHSA payment conditions: an FHSA home acquisition payment

satisfies the FHSA payment conditions in the circumstances set out

in section 17.

FHSA provider has the meaning given by section 10.

FHSA trust means a trust of a kind mentioned in subparagraph

8(c)(iii).

financial services licensee has the meaning given by Chapter 7 of

the Corporations Act 2001.

financial year has the same meaning as in the Income Tax

Assessment Act 1997.

function includes duty.

general interest charge means the charge worked out under

Part IIA of the Taxation Administration Act 1953.

Government FHSA contribution has the meaning given by

section 11.

Government FHSA contribution threshold has the meaning given

by section 39.

hold:

(a) a person holds an FHSA in the circumstances mentioned in

section 9; and

(b) a person holds a qualifying interest in a dwelling in the

circumstances mentioned in section 12.

inactive: an FHSA is inactive in the circumstances mentioned in

section 23.

income tax return means:

(a) a return under section 161, 162 or 163 of the Income Tax

Assessment Act 1936; or

(b) a return by the trustee of a deceased person's estate under

Subdivision 260-E of Schedule 1 to the Taxation

Administration Act 1953.

Key concepts and other definitions Part 2

Other defin itions Division 2

Section 18

First Home Saver Accounts Bill 2008 No. , 2008 15

income year has the same meaning as in the Income Tax

Assessment Act 1997.

indexation factor has the meaning given by subsections 30(3) and

40(3).

index number has the meaning given by subsections 30(5) and

40(5).

legal personal representative has the same meaning as in the

Income Tax Assessment Act 1997.

life insurance company means a company registered under the

Life Insurance Act 1995.

life policy has the same meaning as in the Life Insurance Act 1995.

main residence has the meaning given by section 13.

overpaid amount has the meaning given by subsection 50(2).

owner, in relation to a policy, has the same meaning as in the Life

Insurance Act 1995.

person affected by a reviewable decision, in relation to a

reviewable decision, means the person in relation to which the

decision was made.

personal FHSA contribution has the meaning given by section 11.

policy has the same meaning as in the Life Insurance Act 1995.

produce includes permit access to.

protected information means information that:

(a) concerns a person; and

(b) is disclosed to, or obtained by, a person to whom section 70

applies in the course of, or because of, the person's duties

under or in relation to this Act or the regulations.

provides has the meaning given by section 10.

Prudential Standards has the meaning given by subsection 121(1).

Part 2 Key concepts and other definitions

Division 2 Other definitions

Section 18

16 First Home Saver Accounts Bill 2008 No. , 2008

public offer entity has the same meaning as in the Superannuation

Industry (Supervision) Act 1993.

qualifying interest in a dwelling has the meaning given by

section 12.

quarter has the same meaning as in the Income Tax Assessment Act

1997.

Regulator means:

(a) APRA, if the provision in which it occurs is, or is being

applied for the purposes of, a provision that is administered

by APRA; or

(b) ASIC, if the provision in which it occurs is, or is being

applied for the purposes of, a provision that is administered

by ASIC; or

being applied for the purposes of, a provision that is

administered by the Commissioner.

reporting period has the same meaning as in subsection 1017D(2)

of the Corporations Act 2001.

reviewable decision has the meaning given by section 74.

RSE licence has the same meaning as in the Superannuation

Industry (Supervision) Act 1993.

RSE licensee has the same meaning as in the Superannuation

Industry (Supervision) Act 1993.

Second Commissioner means a Second Commissioner of

Taxation.

spouse has the same meaning as in the Superannuation Industry

(Supervision) Act 1993.

Superannuation Acts means:

(a) the Retirement Savings Accounts Act 1997; and

(b) the Superannuation Industry (Supervision) Act 1993; and

Collection) Act 1997; and

Key concepts and other definitions Part 2

Other defin itions Division 2

Section 18

First Home Saver Accounts Bill 2008 No. , 2008 17

(d) the Superannuation Contributions Tax (Members of

Constitutionally Protected Superannuation Funds)

Assessment and Collection Act 1997; and

(e) the Superannuation (Unclaimed Money and Lost Members)

Act 1999; and

(f) the Termination Payments Tax (Assessment and Collection)

Act 1997.

superannuation interest has the same meaning as in the Income

Tax Assessment Act 1997.

superannuation provider has the same meaning as in the Income

Tax Assessment Act 1997.

taxation law has the same meaning as in the Income Tax

Assessment Act 1997.

tax file number has the meaning given by section 202A of the

Income Tax Assessment Act 1936.

underpaid amount has the meaning given by subsection 46(2).

Part 3 Elig ibility, contribution and payment rules

Division 1 Eligib ility ru les

Section 19

18 First Home Saver Accounts Bill 2008 No. , 2008

Part 3--Eligibility, contribution and payment rules

Division 1--Eligibility rules

19 Obligation of FHSA provide r in opening or issuing FHSA

(1) An FHSA provider must not open or issue an FHSA for a person

unless:

(a) the person has given the provider an application in the

approved form; and

(b) the application states that:

(i) the person meets the FHSA eligibility requirements; and

(ii) if the person already holds an FHSA--the person will

ensure that the balance of the FHSA will be transferred

to the FHSA to be opened or issued; and

(iii) if the person held an FHSA that was closed, and

nevertheless meets the FHSA eligibility requirements

because of paragraph 15(2)(b)--the initial contribution

to the FHSA to be opened or issued will be made in

accordance with paragraph 17(3)(b); and

provider in connection with the operation of this Act and the

Superannuation Acts.

Note:

Making a false statement in the application may constitute an offence:

see subsection 8J(9) and sections 8K and 8N of the Taxation

Administration Act 1953.

Offence

(2) A person commits an offence if the person contravenes

subsection (1).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(3) A contravention of subsection (1) does not affect the validity of a

transaction.

Eligibility, contribution and payment rules Part 3

Eligibility rules Division 1

Section 20

First Home Saver Accounts Bill 2008 No. , 2008 19

20 FHSA holder must notify provide r if he or she does not satisfy

the FHSA eligibility requirements

(1) The holder of an FHSA must give the FHSA provider a notice in

the approved form in accordance with this section if circumstances

arise resulting in the FHSA holder not satisfying the FHSA

eligibility requirements.

Note:

Section 286-75 in Schedule 1 to the Taxation Administration Act 1953

provides an administrative penalty for a breach of this subsection. A

breach of this subsection may also be an offence under section 8C of

that Act.

(2) The FHSA holder must give the notice within 30 days after the

circumstances arise.

(3) However, the FHSA holder need not give the notice if:

(a) the FHSA is closed within 30 days after the circumstances

arise; or

(b) the FHSA provider must pay an amount from the FHSA

under section 32 (FHSA home acquisition payment) because

the FHSA holder requests the FHSA provider within 30 days

after the circumstances arise to do so.

(4) The notice must contain:

(a) if the FHSA holder is aged 60 or over and wants the balance

of the FHSA paid to him or her--a statement to that effect; or

(b) otherwise--an authority for the FHSA provider to contribute

the balance of the FHSA to a superannuation interest of the

FHSA holder in a complying superannuation plan.

(5) The FHSA holder may give the FHSA provider a written

revocation of the notice if:

(a) the FHSA holder becomes satisfied that he or she satisfies the

FHSA eligibility requirements; and

(b) 30 days have not yet elapsed since the FHSA holder gave the

FHSA provider the notice; and

paragraph 22(2)(b).

Part 3 Elig ibility, contribution and payment rules

Division 1 Eligib ility ru les

Section 21

20 First Home Saver Accounts Bill 2008 No. , 2008

21 Commissioner must notify provider if reason to believe that

certain circumstances exist

(1) The Commissioner must give the provider of an FHSA a notice in

accordance with this section if the Commissioner has reason to

believe that the FHSA holder does not satisfy the FHSA eligibility

requirements.

Note:

The Commissioner may give the provider a notice under subsection

67(2) if a correct TFN was not quoted for the FHSA holder.

(2) If the Commissioner gives a notice under subsection (1), the

Commissioner must give a copy of the notice to the FHSA holder.

(3) The notice must describe the operation of the following provisions

that results from the notice being given:

(a) section 22 (requirement to close inactive FHSA);

(b) section 26 (limit on contributions to inactive FHSA);

(4) The Commissioner must give the FHSA provider a written

revocation of the notice if:

(a) the Commissioner becomes satisfied that the FHSA holder

satisfies the FHSA eligibility requirements; and

(b) 30 days have not yet elapsed since the Commissioner gave

the FHSA provider the notice; and

paragraph 22(2)(b).

(5) If the Commissioner gives a revocation under subsection (4), the

Commissioner must give a copy of it to the FHSA holder.

22 FHSA provider to close inactive FHSA

(1) This section applies if:

(a) an FHSA becomes inactive under subsection 23(1), and the

FHSA provider has not received a revocation of the notice

mentioned in that subsection before the 30th day (the trigger

day) after the FHSA provider received the notice; or

(b) an FHSA becomes inactive under subsection 23(2), (3) or (4)

on a particular day (also the trigger day).

Eligibility, contribution and payment rules Part 3

Eligibility rules Division 1

Section 23

First Home Saver Accounts Bill 2008 No. , 2008 21

(2) The FHSA provider must, within 14 days after the trigger day:

(a) pay the entire balance of the FHSA to:

(i) if the FHSA holder is aged 60 or over and has given the

FHSA provider a statement that he or she wants the

balance of the FHSA to be paid to him or her--the

FHSA holder; or

(ii) otherwise--the superannuation interest mentioned in

subsection (3); and

(b) close the FHSA.

Note:

If the FHSA holder becomes bankrupt, this section does not prevent a

payment from the FHSA that is property divisible amongst the

holder's creditors (see section 128).

(3) The superannuation interest is:

(a) if, for the purposes this paragraph, the FHSA holder has

notified the FHSA provider in writing of a particular

superannuation interest of the holder in a complying

superannuation plan--that superannuation interest; or

(b) otherwise--to a superannuation interest for the benefit of the

FHSA holder in the FHSA provider's default superannuation

plan (see section 24).

Offence

(4) A person commits an offence if the person contravenes

subsection (2).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(5) A contravention of subsection (2) does not affect the validity of a

transaction.

23 Inactive FHSA

(1) An FHSA is inactive if the provider of the FHSA:

(a) has received a notice from the FHSA holder in accordance

with subsection 20(1) (and has not received a revocation of

that notice under subsection 20(5)); or

Part 3 Elig ibility, contribution and payment rules

Division 1 Eligib ility ru les

Section 24

22 First Home Saver Accounts Bill 2008 No. , 2008

(b) has received a notice from the Commissioner in accordance

with subsection 21(1) (and has not received a revocation of

that notice under subsection 21(4)); or

with subsection 67(2) (and has not received a revocation of

that notice).

(2) An FHSA is also inactive if:

(a) the provider of the FHSA makes a payment from the FHSA;

and

(b) the provider must make the payment under:

(i) section 32 (FHSA home acquisition payment); or

(ii) section 33 (FHSA holder aged 60 or over); and

more than nil.

(3) An FHSA is also inactive if the holder of the FHSA is 65 years of

age or over.

(4) An FHSA is also inactive if:

(a) the FHSA was opened or issued for a person because he or

she made a statement in an application, in accordance with

subparagraph 19(1)(b)(ii), that he or she would ensure that

the balance of another FHSA held by him or her would be

transferred to the FHSA; and

(b) a period of 44 days has elapsed since the FHSA was opened

or issued; and

24 Default superannuation plan

(1) An entity that provides an FHSA or offers to provide an FHSA at a

time must have nominated in writing, before that time, a complying

superannuation plan to be its default superannuation plan for the

purposes of paragraph 22(3)(b).

Offence

(2) A person commits an offence if the person contravenes

subsection (1).

Part 3 Elig ibility, contribution and payment rules

Division 2 Contributions to FHSAs

Section 25

24 First Home Saver Accounts Bill 2008 No. , 2008

Division 2--Contributions to FHSAs

25 Limit on contributions to FHSAs--account holder aged 65 or

over

(1) The provider of an FHSA must not allow an amount to be

contributed to the FHSA if the holder of the account is aged 65 or

older.

Note:

In these circumstances the Commissioner may be able to pay a

Government FHSA contribution directly to the FHSA holder (see

section 41).

(2) The FHSA provider does not contravene subsection (1) if the

provider repays the amount from the FHSA to the FHSA holder

within 30 days after receiving it.

Offence

(3) A person commits an offence if the person contravenes

subsection (1).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (1) does not affect the validity of a

transaction.

26 Limit on contributions to FHSAs--inactive FHSA

(1) The provider of an FHSA must not allow an amount to be

contributed to the FHSA if it is inactive.

(2) The FHSA provider does not contravene subsection (1) if the

provider repays the amount from the FHSA to the FHSA holder

within 30 days after receiving it.

Eligibility, contribution and payment rules Part 3

Contributions to FHSAs Division 2

Section 27

First Home Saver Accounts Bill 2008 No. , 2008 25

Offence

(3) A person commits an offence if the person contravenes

subsection (1).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (1) does not affect the validity of a

transaction.

27 Limit on contributions to FHSAs--holde r in breach of account

balance cap

(1) The provider of an FHSA must not allow an amount to be

contributed to the FHSA at a time if:

(a) either:

(i) the FHSA holder is in breach of the account balance cap

at the time the amount is to be paid; or

(ii) the FHSA holder would be in breach of the account

balance cap at that time if the amount were paid; and

(b) the contribution would not be:

(i) a Government FHSA contribution; or

(ii) a contribution mentioned in paragraph 11(3)(a) (transfer

to the FHSA from another FHSA held by the FHSA

holder); or

(iii) a contribution mentioned in paragraph 11(3)(c)

(recontribution of FHSA home acquisition payment

after failure to occupy a dwelling).

Note:

This subsection does not prevent the FHSA provider from allowing

part of a sum paid to it to be contributed to the FHSA.

(2) The FHSA provider does not contravene subsection (1) if the

provider repays the amount from the FHSA to the FHSA holder

within 30 days after receiving it.

Part 3 Elig ibility, contribution and payment rules

Division 2 Contributions to FHSAs

Section 28

26 First Home Saver Accounts Bill 2008 No. , 2008

Offence

(3) A person commits an offence if the person contravenes

subsection (1).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (1) does not affect the validity of a

transaction.

28 Breach of account balance cap

(1) If the balance of an FHSA at a time exceeds the account balance

cap for the financial year in which that time occurs, the person who

holds the FHSA is in breach of the account balance cap:

(a) at that time; and

(b) at all later times (subject to this section).

Note:

The FHSA holder is in breach of the account balance cap at a later

time even if the balance of his or her FHSA falls short of the account

balance cap for the financial year in which that later time occurs.

(2) However, the person is not in breach of the account balance cap

during the period mentioned in subsection (3) if:

(a) the person applies to open or be issued with an FHSA; and

(b) the initial contribution to the FHSA to be opened or issued

will be made in accordance with paragraph 17(3)(b)

(recontribution of FHSA home acquisition payment after

failure to occupy a dwelling).

(3) The period:

(a) starts when the FHSA mentioned in paragraph (2)(a) is

opened or issued; and

(b) ends at the first time when the balance of that FHSA (or any

other FHSA later held by the person) exceeds the account

balance cap for the financial year in which that time occurs.

(4) The person is also not in breach of the account balance cap during

the period mentioned in subsection (5) if:

Eligibility, contribution and payment rules Part 3

Contributions to FHSAs Division 2

Section 29

First Home Saver Accounts Bill 2008 No. , 2008 27

(a) a payment of a kind mentioned in paragraph 31(1)(c)

(payments because of a family law obligation) is made from

an FHSA held by the person; and

(b) the balance of that FHSA immediately after the payment is

less than the account balance cap for the financial year in

which the payment is made.

(5) The period:

(a) starts when the payment is made; and

(b) ends at the first time when the balance of that FHSA (or any

other FHSA later held by the person) exceeds the account

balance cap for the financial year in which that time occurs.

29 Account balance cap

The account balance cap for the 2008-09 financial year is

$75,000. This amount is indexed annually.

Note:

Section 30 shows how to index this cap. However, the cap only moves

by increments of $5,000.

30 Indexation of account balance cap

(1) The amount of the account balance cap is indexed annually by:

(a) multiplying the amount for the 2008-09 financial year by its

indexation factor; and

(b) rounding the result in paragraph (a) down to the nearest

multiple of $5,000.

(2) The account balance cap is not indexed if its indexation factor is 1

or less.

(3) The indexation factor is:

Index number mentioned in subsection (5) for the quarter ending

on 31 December just before the start of the relevant financial year

Index number mentioned in subsection (5)

for the quarter ending on 31 December 2007

(4) The indexation factor mentioned in subsection (3) is calculated to 3

decimal places (rounding up if the fourth decimal place is 5 or

more).

Eligibility, contribution and payment rules Part 3

Restrictions on payments from FHSAs Division 3

Section 31

First Home Saver Accounts Bill 2008 No. , 2008 29

Division 3--Restrictions on payments from FHSAs

31 FHSA provider must not make payment from FHSA unless

authorised by law etc.

(1) The provider of an FHSA must not make a payment from the

FHSA unless:

(a) the provider must make the payment under:

(i) section 32 (FHSA home acquisition payment); or

(ii) section 33 (FHSA holder aged 60 or over); or

(b) the provider must make the payment under:

(i) subsection 22(2) (compulsory contribution of balance of

inactive FHSA to superannuation etc.); or

(ii) section 34 (voluntary contribution of balance of FHSA

to superannuation); or

(iii) section 35 (voluntary transfer of balance of FHSA to

another FHSA); or

it to be made:

(i) by way of a contribution to a superannuation interest of

the FHSA holder's spouse or former spouse in a

complying superannuation plan; or

(ii) by way of transfer to an FHSA held by the FHSA

holder's spouse or former spouse; or

(iii) to the FHSA holder's spouse or former spouse, if the

spouse or former spouse is aged 60 or over; or

(d) the payment is a repayment made in accordance with:

(i) subsection 25(2), 26(2) or 27(2); or

(ii) subsection 992A(4) (unsolicited offer of financial

product), section 1016F (defective product disclosure

document) or section 1019B (cooling-off period) of the

Corporations Act 2001; or

(e) the FHSA holder is deceased; or

(f) the payment is of an amount of fees owing to the FHSA

provider for providing the FHSA; or

Part 3 Elig ibility, contribution and payment rules

Division 3 Restrictions on payments fro m FHSAs

Section 31

30 First Home Saver Accounts Bill 2008 No. , 2008

(g) the payment is of an amount owing to the Commonwealth in

respect of overpayments of Government FHSA contributions.

Note:

If the FHSA holder becomes bankrupt, this section does not prevent a

payment from the FHSA that is property divisible amongst the

holder's creditors (see section 128).

Offence

(2) A person commits an offence if the person contravenes

subsection (1).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(3) A contravention of subsection (1) does not affect the validity of a

transaction.

Eligibility, contribution and payment rules Part 3

Requirements to make pay ments fro m FHSAs Division 4

Section 32

First Home Saver Accounts Bill 2008 No. , 2008 31

Division 4--Requirements to make payments from FHSAs

32 Payment from FHSA for purposes of acquiring a home

(1) This section applies if:

(a) the holder of an FHSA has given the FHSA provider an

application in the approved form requesting an amount to be

paid from the FHSA; and

(b) the FHSA holder has declared in the application that the

payment will satisfy the FHSA payment conditions

mentioned in subsection 17(1); and

(i) personal FHSA contributions of at least $1,000 per

financial year have been made for the FHSA holder in at

least 4 financial years (one of which may be the

financial year in which the payment is to be made);

(ii) the FHSA holder is in breach of the account balance

cap, and has held an FHSA in at least 4 financial years

(one of which may be the financial year in which the

payment is to be made);

(iii) the FHSA holder has declared in the application that he

or she will acquire a qualifying interest in a dwelling

together with another FHSA holder in respect of whom

the requirement in subparagraph (i) or (ii) is met; and

(d) the provider is satisfied that the requirements (if any)

specified in the regulations are met; and

(e) the FHSA is not inactive.

(2) The FHSA provider must pay the amount as requested:

(a) as soon as practicable after the application is made; and

(b) no later than 30 days after the application is made.

Offence

(3) A person commits an offence if the person contravenes

subsection (2).

Penalty: 100 penalty units.

Part 3 Elig ibility, contribution and payment rules

Division 4 Requirements to make payments fro m FHSAs

Section 33

32 First Home Saver Accounts Bill 2008 No. , 2008

Validity of transaction not affected by contravention

(4) A contravention of subsection (2) does not affect the validity of a

transaction.

33 Payment from FHSA if FHSA holder aged 60 or over

(1) This section applies if:

(a) the holder of an FHSA has given the FHSA provider an

application in the approved form requesting an amount to be

paid from the FHSA; and

(b) the FHSA holder is aged 60 or over.

(2) The FHSA provider must pay the amount as requested:

(a) as soon as practicable after the application is made; and

(b) no later than 30 days after the application is made.

Offence

(3) A person commits an offence if the person contravenes

subsection (2).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (2) does not affect the validity of a

transaction.

34 Payment of FHSA balance as contribution to superannuation

(1) This section applies if:

(a) an FHSA holder requests the FHSA provider to pay the

balance of the FHSA by way of a contribution to a

superannuation interest of the FHSA holder in a complying

superannuation plan; and

(b) the request is in the approved form.

(2) The FHSA provider must pay the amount as requested:

(a) as soon as practicable after the application is made; and

(b) no later than 30 days after the application is made.

Eligibility, contribution and payment rules Part 3

Requirements to make pay ments fro m FHSAs Division 4

Section 35

First Home Saver Accounts Bill 2008 No. , 2008 33

Offence

(3) A person commits an offence if the person contravenes

subsection (2).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (2) does not affect the validity of a

transaction.

35 Payment of FHSA balance as transfer to another FHSA

(1) This section applies if:

(a) an FHSA holder requests the FHSA provider to pay the

balance of the FHSA by way of transfer to another FHSA

held by the FHSA holder; and

(b) the request is in the approved form; and

(2) The FHSA provider must pay the amount as requested:

(a) as soon as practicable after the application is made; and

(b) no later than 30 days after the application is made.

Note:

If the other FHSA is provided by another entity, the FHSA provider

must give that entity a statement in accordance with section 391-10 in

Schedule 1 to the Taxation Administration Act 1953.

Offence

(3) A person commits an offence if the person contravenes

subsection (2).

Penalty: 100 penalty units.

Validity of transaction not affected by contravention

(4) A contravention of subsection (2) does not affect the validity of a

transaction.

Part 4 Govern ment FHSA contributions

Division 1 Eligib ility for and amount of a Govern ment FHSA contribution

Section 36

34 First Home Saver Accounts Bill 2008 No. , 2008

Part 4--Government FHSA contributions

Division 1--Eligibility for and amount of a Government

FHSA contribution

36 Whether a Government FHSA contribution is payable

(1) A Government FHSA contribution is payable under this Act for a

person for a financial year if:

(a) the person is an individual; and

(b) one or more personal FHSA contributions are made during

the financial year for the person; and

(i) the person has lodged an income tax return for the

income year corresponding to the financial year; or

(ii) the person has given a notice in accordance with

section 37 for the income year corresponding to the

financial year; and

(d) the return or notice (as the case requires) states that the

person satisfied the residency requirement in subsection (2)

for at least part of the income year corresponding to the

financial year; and

(e) the person satisfied the residency requirement in

subsection (2) for at least part of the income year

corresponding to the financial year.

(2) The residency requirement is that the person is a resident of

Australia for the purposes of the Income Tax Assessment Act 1936.

37 Notification of eligibility status

For the purposes of this Part, a person may, in the approved form,

notify the Commissioner that:

(a) the person is not required to lodge an income tax return for

an income year corresponding to a financial year; and

Govern ment FHSA contributions Part 4

Eligibility for and amount of a Govern ment FHSA contribution Division 1

Section 38

First Home Saver Accounts Bill 2008 No. , 2008 35

(b) the person satisfied the residency requirement in subsection

36(2) for at least part of that year.

38 Amount of Government FHSA contribution

(1) Work out the amount of a Government FHSA contribution for a

person for a financial year in accordance with this section.

(2) First work out the following (the covered contributions):

(a) add up the personal FHSA contributions that were made

during the financial year for the person; and

(b) if the total exceeds the Government FHSA contribution

threshold for that financial year (see section 39)--disregard

the excess.

(3) The amount of the Government FHSA contribution is the covered

contributions multiplied by 17%.

(4) If (apart from this subsection) the amount of the Government

FHSA contribution would be less than $20, the amount of the

Government FHSA contribution is increased to $20.

(5) If (apart from this subsection) the amount of the Government

FHSA contribution would fall short of a multiple of $1, the amount

of the Government FHSA contribution is increased by that

shortfall.

39 Government FHSA contribution threshold

The Government FHSA contribution threshold for the 2008-09

financial year is $5,000. This amount is indexed annually.

Note:

Section 40 shows how to index this threshold. However, the threshold

only moves by increments of $500.

40 Indexation of Government FHSA contribution threshold

(1) The amount of the Government FHSA contribution threshold is

indexed annually by:

(a) multiplying the amount for the 2008-09 financial year by its

indexation factor; and

Part 4 Govern ment FHSA contributions

Division 1 Eligib ility for and amount of a Govern ment FHSA contribution

Section 40

36 First Home Saver Accounts Bill 2008 No. , 2008

(b) rounding the result in paragraph (a) down to the nearest

multiple of $500.

(2) The Government FHSA contribution threshold is not indexed if its

indexation factor is 1 or less.

(3) The indexation factor is:

Index number mentioned in subsection (5) for the quarter ending

on 31 December just before the start of the relevant financial year

Index number mentioned in subsection (5)

for the quarter ending on 31 December 2007

(4) The indexation factor mentioned in subsection (3) is calculated to 3

decimal places (rounding up if the fourth decimal place is 5 or

more).

(5) The index number for a quarter is the estimate of full-time adult

average weekly ordinary time earnings for the middle month of the

quarter first published by the Australian Statistician for that month.

Govern ment FHSA contributions Part 4

Payment of Govern ment FHSA contribution Division 2

Section 41

First Home Saver Accounts Bill 2008 No. , 2008 37

Division 2--Payment of Government FHSA contribution

41 Commissioner's determinations

(1) The Commissioner must determine that a Government FHSA

contribution is payable for a person for a financial year if the

Commissioner is satisfied that the contribution is payable for the

person for the financial year.

(2) In deciding whether to make a determination under this section, the

Commissioner may have regard to:

(a) the income tax return lodged for the person, or the notice

given in accordance with section 37 for the person, as the

case requires, for the income year corresponding to the

financial year; and

(b) the statement (relating to personal FHSA contributions) given

to the Commissioner under section 391-5 in Schedule 1 to the

Taxation Administration Act 1953 for the person for the

financial year; and

relevant to whether a Government FHSA contribution is

payable for the person for the financial year.

(3) If the Commissioner makes a determination under subsection (1),

the Commissioner must determine whether the contribution is to be

paid:

(a) to an FHSA held by the person; or

(b) to a superannuation interest of the person in a complying

superannuation plan; or

(d) to the person's legal personal representative.

42 Payment of Governme nt FHSA contribution

(1) The Commissioner must, in accordance with a determination made

under section 41, pay the Government FHSA contribution payable

for a person for a financial year on or before the last day (the

payment date) of the period mentioned in subsection (2).

Part 4 Govern ment FHSA contributions

Division 2 Pay ment of Govern ment FHSA contribution

Section 43

38 First Home Saver Accounts Bill 2008 No. , 2008

(2) The period:

(a) starts on the later of the following days:

(i) the day on which the income tax return is lodged for the

person, or the notice is given in accordance with

section 37 for the person, as the case requires, for the

income year corresponding to the financial year;

(ii) the day on which the statement (relating to personal

FHSA contributions) for the person for the financial

year is given to the Commissioner under section 391-5

in Schedule 1 to the Taxation Administration Act 1953;

and

(b) ends 60 days later.

43 Providers to return Government FHSA contribution in certain

circumstances

(1) If:

(a) a Government FHSA contribution for a person is paid to an

FHSA provider or a superannuation provider; and

(b) the provider has not paid the contribution to an FHSA held

by the person, or to a superannuation interest of the person in

a complying superannuation plan, by the end of the 28th day

after the day on which the contribution was paid to the

provider;

the provider:

(d) must advise the Commissioner of the repayment, in the

approved form, when the contribution is repaid.

Note 1:

The liability to repay the contribution is a tax-related liability: see

Part 4-15 in Schedule 1 to the Taxation Administration Act 1953 for

collection and recovery provisions.

Note 2:

Section 52 provides for the imposition of general interest charge if the

contribution is not repaid within a certain period.

Note 3:

Section 286-75 in Schedule 1 to the Taxation Administration Act 1953

provides an administrative penalty for breach of paragraph (1)(d). A

breach of that paragraph may also be an offence under section 8C of

that Act.

Govern ment FHSA contributions Part 4

Payment of Govern ment FHSA contribution Division 2

Section 44

First Home Saver Accounts Bill 2008 No. , 2008 39

(2) The amount is due and payable 7 days after the day on which the

provider first becomes liable to repay the contribution.

44 Government FHSA contribution increased by interest amount if

paid late in certain circumstances

(1) The amount of the Government FHSA contribution for a person for

a financial year is increased by the amount of interest worked out

under subsection (2) if the Commissioner pays none of the

Government FHSA contribution on or before the payment date for

the contribution (see subsection 42(1)).

(2) The interest is to be calculated:

(a) on the amount of the Government FHSA contribution; and

(b) for the period from the payment date for the Government

FHSA contribution until the day on which the Commissioner

first pays an amount in satisfaction of the Government FHSA

contribution; and

(d) at the base interest rate for the day on which the interest is

calculated.

45 Commissioner to notify if Gove rnme nt FHSA contribution pa id

(1) If the Commissioner pays a Government FHSA contribution for a

person to:

(a) the person; or

(b) the person's legal personal representative;

the Commissioner must notify the person or the representative of

the payment when the contribution is paid.

(2) If the Commissioner pays a Government FHSA contribution for a

person to an FHSA provider or superannuation provider, the

Commissioner must notify the provider and the person of the

contribution when it is paid.

Part 4 Govern ment FHSA contributions

Division 3 Underpayments of Govern ment FHSA contribution

Section 46

40 First Home Saver Accounts Bill 2008 No. , 2008

Division 3--Underpayments of Government FHSA

contribution

46 Unde rpayme nt determinations

(1) This section applies if the Commissioner:

(a) pays an amount by way of a Government FHSA contribution

for a person for a financial year; and

(b) is satisfied that the amount paid is less than the correct

amount of the contribution.

(2) The amount by which the correct amount exceeds the amount paid

is the underpaid amount.

(3) The Commissioner must determine that the underpaid amount is to

be paid for the person for the financial year.

(4) If the Commissioner makes a determination under subsection (3),

the Commissioner must determine whether the underpaid amount

is to be paid:

(a) to an FHSA held by the person; or

(b) to a superannuation interest of the person in a complying

superannuation plan; or

(d) to the person's legal personal representative.

(5) The Commissioner must, in accordance with determinations made

under this section, pay the underpaid amount on or before the last

day (the payment date) of the period mentioned in subsection (6).

(6) The period:

(a) starts on the later of the following days:

(i) the day on which the income tax return is lodged for the

person, or the notice is given in accordance with

section 37 for the person, as the case requires, for the

income year corresponding to the financial year;

(ii) the day on which the statement (relating to personal

FHSA contributions) for the person for the financial

Govern ment FHSA contributions Part 4

Underpayments of Govern ment FHSA contribution Division 3

Section 47

First Home Saver Accounts Bill 2008 No. , 2008 41

year is given to the Commissioner under section 391-5

in Schedule 1 to the Taxation Administration Act 1953;

and

(b) ends 60 days later.

47 Providers to return underpaid amounts in certain circumstances

(1) If:

(a) the underpaid amount for a person is paid to an FHSA

provider or a superannuation provider; and

(b) the provider has not paid the underpaid amount to an FHSA

held by the person, or to a superannuation interest of the

person in a complying superannuation plan, by the end of the

28th day after the day on which the contribution was paid to

the provider;

the provider:

Commonwealth; and

(d) must notify the Commissioner of the repayment, in the

approved form, at the time when the underpaid amount is

repaid.

Note 1:

The liability to repay the contribution is a tax-related liability: see

Part 4-15 in Schedule 1 to the Taxation Administration Act 1953 for

collection and recovery provisions.

Note 2:

Section 52 provides for the imposition of general interest charge if the

contribution is not repaid within a certain period.

Note 3:

Section 286-75 in Schedule 1 to the Taxation Administration Act 1953

provides an administrative penalty for breach of paragraph (1)(d). A

breach of that paragraph may also be an offence under section 8C of

that Act.

(2) The amount is due and payable 7 days after the day on which the

provider first becomes liable to repay the underpaid amount.

48 Government FHSA contribution increased by interest amount if

underpaid amount paid late in certain circumstances

(1) The amount of the Government FHSA contribution for a person for

a financial year is increased by the amount of interest worked out

under subsection (2) if the Commissioner does not pay the

Part 4 Govern ment FHSA contributions

Division 3 Underpayments of Govern ment FHSA contribution

Section 49

42 First Home Saver Accounts Bill 2008 No. , 2008

underpaid amount in full on or before the payment date for the

underpaid amount (see subsection 46(5)).

(2) The interest is to be calculated:

(a) on the underpaid amount that remains unpaid on the payment

date for the underpaid amount; and

(b) for the period from the payment date for the underpaid

amount until the day on which the underpaid amount is paid

in full; and

(d) at the base interest rate for the day on which the interest is

calculated.

49 Small underpayments paid by cheque

The amount of the Government FHSA contribution is increased by

the difference between $5 and the underpaid amount if:

(a) the Commissioner makes a determination under subsection

46(3) in relation to an underpaid amount; and

(b) the underpaid amount is less than $5; and

(i) the person; or

(ii) the person's legal personal representative.

Govern ment FHSA contributions Part 4

Overpayments of Govern ment FHSA contribution Division 4

Section 50

First Home Saver Accounts Bill 2008 No. , 2008 43

Division 4--Overpayments of Government FHSA

contribution

50 Recovery of overpayme nts

(1) This section applies if:

(a) the Commissioner pays an amount by way of a Government

FHSA contribution for a person for a financial year; and

(b) either:

(i) the contribution was not payable for the person for the

financial year; or

(ii) the amount paid is more than the correct amount of the

contribution.

(2) The overpaid amount is:

(a) if the contribution was not payable for the person for the

financial year--the whole of the amount referred to in

paragraph (1)(a); or

(b) if the amount paid is more than the correct amount of the

contribution--the amount by which the amount paid exceeds

the correct amount.

(3) The Commissioner may take action to recover the overpaid amount

under one or more of the items in the following table, but may only

take action under an item if the conditions (if any) specified for

that item are satisfied:

Methods for recovering overpaid amount

Item

Action the Commissioner may

take to recover overpaid amount

Conditions to be satisfied

The Co mmissioner may deduct the

whole or a part of the overpaid

amount fro m any Govern ment

FHSA contribution payable for the

person.

Part 4 Govern ment FHSA contributions

Division 4 Overpay ments of Government FHSA contribution

Section 50

44 First Home Saver Accounts Bill 2008 No. , 2008

Methods for recovering overpaid amount

Item

Action the Commissioner may

take to recover overpaid amount

Conditions to be satisfied

The Co mmissioner may recover the

whole or a part of the overpaid

amount fro m the person (or the

person's legal personal

representative) as a debt due by the

person (or the representative) to the

Co mmonwealth.

The Government FHSA contribution

must have been paid by the

Co mmissioner to the person (or the

representative) or a payment of a

kind mentioned in paragraph

31(1)(a) or (e) must have been made

fro m an FHSA held by the person.

The Co mmissioner must give the

person (or the representative) written

notice of the proposed recovery

(including the amount to be

recovered).

At least 28 days must have elapsed

since the notice was given.

The amount recovered must not

exceed the amount specified in the

notice.

The Co mmissioner may recover the

whole or a part of the overpaid

amount fro m an FHSA provider or a

superannuation provider to which:

(a) the Co mmissioner paid the

Govern ment FHSA contribution;

(b) another FHSA provider or

superannuation provider

transferred the Govern ment

FHSA contribution;

as a debt due by the FHSA provider

or superannuation provider to the

Co mmonwealth.

The amount recovered must not

exceed the balance held by the

provider for the person.

The Co mmissioner must give the

provider written notice of the

proposed recovery (including the

amount to be recovered).

At least 28 days must have elapsed

since the notice was given.

The amount recovered must not

exceed the amount specified in the

notice.

Note:

Section 52 provides for the imposition of general interest charge if an

amount that the person must pay under a notice given to the person

under item 2 or 3 of the above table is not repaid within a certain

period.

Govern ment FHSA contributions Part 4

Overpayments of Govern ment FHSA contribution Division 4

Section 51

First Home Saver Accounts Bill 2008 No. , 2008 45

(4) The Commissioner may revoke a notice given under item 2 or 3 of

the table in subsection (3) if the Commissioner is satisfied that it is

appropriate in the circumstances to do so.

(5) The total of the amounts deducted or recovered under

subsection (3) in relation to an overpayment must not exceed the

overpaid amount.

(6) If the Commissioner makes a deduction under item 1 of the table in

subsection (3) in relation to a Government FHSA contribution for a

person, the Commissioner must notify the person within 28 days

after the deduction is made.

51 Small overpayme nts

If the overpaid amount mentioned in subsection 50(2) is less than

the greater of the following amounts:

(a) $100;

(b) the amount (if any) specified in the regulations for the

purposes of this paragraph;

the Government FHSA contribution is increased by the overpaid

amount.

Part 5 Ad min istration

Division 1 General

Section 52

46 First Home Saver Accounts Bill 2008 No. , 2008

Part 5--Administration

Division 1--General

52 When general interest charge payable

(1) If:

(a) a person is liable under subsection 43(1) or 47(1) to repay an

amount; and

(b) the whole or a part of the amount remains unpaid after the

time by which the amount is due to be paid;

the person is liable to pay general interest charge on the unpaid

amount.

(2) If:

(a) the Commissioner gives a person a notice under item 2 or 3

of the table in subsection 50(3); and

(b) an amount that the person must pay under the notice remains

unpaid after the time by which it is due to be paid;

the person is liable to pay general interest charge on the unpaid

amount.

(3) A person who is liable under this section to pay general interest

charge on an unpaid amount is liable to pay the charge for each day

in the period that:

(a) started at the beginning of the day by which the unpaid

amount was due to be paid; and

(b) finishes at the end of the last day at the end of which any of

the following remains unpaid:

(i) the unpaid amount;

(ii) general interest charge on any of the unpaid amount.

(4) For the purposes of this section:

(a) an amount that a person becomes liable under subsection

43(1) or 47(1) to repay is due to be paid 7 days after the day

on which the person first becomes liable to repay the amount;

and

Admin istration Part 5

General Division 1

Section 53

First Home Saver Accounts Bill 2008 No. , 2008 47

(b) an amount payable under a notice given under item 2 or 3 of

the table in subsection 50(3) is due to be paid 28 days after

the day on which the notice is given.

53 Decisions under Part 4 to be in writing

(1) A decision of the Commissioner under Part 4 or regulations

relating to that Part must be in writing.

(2) Such a decision is taken to be in writing if it is made, or recorded,

by means of a computer.

54 Commissioner may arrange for use of computer programs to

make decisions unde r Part 4

(1) The Commissioner may arrange for the use, under the

Commissioner's control, of computer programs for any purposes

for which the Commissioner may make decisions under Part 4 or

regulations relating to that Part.

(2) A decision made by the operation of a computer program under an

arrangement made under subsection (1) is taken to be a decision

made by the Commissioner.

55 Approved forms approved by Commissioner

To avoid doubt, an approved form approved by the Commissioner

for the purposes of a provision of this Act is an approved form

within the meaning of section 388-50 in Schedule 1 to the Taxation

Administration Act 1953.

Part 5 Ad min istration

Division 2 Tax file numbers

Section 56

48 First Home Saver Accounts Bill 2008 No. , 2008

Division 2--Tax file numbers

Subdivision A--Quotation, use and transfer of FHSA holder's

tax file number

56 FHSA holder or applicant may quote tax file numbe r

An FHSA holder, or an applicant to become an FHSA holder, may

quote his or her tax file number to the FHSA provider in

connection with the operation or the possible future operation of

this Act and the Superannuation Acts.

Note:

Section 62 sets out the method of quoting.

57 FHSA provider may request FHSA holder's or applicant's tax

file numbe r

An FHSA provider may at any time request, in the approved form,

an FHSA holder, or a person applying to become an FHSA holder,

to quote his or her tax file number to the FHSA provider in

connection with the operation or the possible future operation of

this Act and the Superannuation Acts.

58 FHSA provider must request FHSA holder to quote tax file

number if not quoted previously

(1) Subject to subsection (3), if:

(a) a person becomes a holder of an FHSA; and

(b) the person has not quoted his or her tax file number to the

FHSA provider in connection with the operation or the

possible future operation of this Act and the Superannuation

Acts, by the time he or she becomes a holder;

the FHSA provider must, before the required time (see

subsection (2)), request the person in the approved form to quote

his or her tax file number to the FHSA provider in connection with

the operation or the possible future operation of this Act and the

Superannuation Acts.

Admin istration Part 5

Tax file nu mbers Division 2

Section 59

First Home Saver Accounts Bill 2008 No. , 2008 49

Example: The FHSA provider must make the request if the person quoted the

incorrect tax file number in his or her application for the FHSA.

Required time

(2) The required time is the end of the 28th day after the day on which

the FHSA provider becomes aware that the person has not quoted

his or her tax file number to the FHSA provider in connection with

the operation or the possible future operation of this Act and the

Superannuation Acts.

Exception

(3) The FHSA provider is not required to make the request if, before

the required time, the person quotes his or her tax file number to

the FHSA provider in connection with the operation or the possible

future operation of this Act and the Superannuation Acts.

Offences

(4) An FHSA provider commits an offence if it contravenes

subsection (1).

Penalty: 100 penalty units.

(5) An FHSA provider commits an offence if it contravenes

subsection (1). This is an offence of strict liability.

Penalty: 50 penalty units.

Note:

For strict liability, see section 6.1 of the Criminal Code.

59 No obligation to quote tax file numbe r

If the FHSA provider requests an FHSA holder or an applicant to

quote his or her tax file number, the holder or applicant is not

obliged to comply with the request.

60 Use of tax file number for certain purposes

(1) This section applies if an FHSA holder, or a person applying to

become an FHSA holder, quotes his or her tax file number to the

Part 5 Ad min istration

Division 2 Tax file numbers

Section 60

50 First Home Saver Accounts Bill 2008 No. , 2008

FHSA provider in connection with the operation or the possible

future operation of this Act and the Superannuation Acts.

Obligation to record tax file number

(2) If the FHSA provider does not already have a record of the tax file

number, the FHSA provider must, as soon as is reasonably

practicable after the quotation, make a record of it.

Obligation to retain tax file number until no longer required

(3) The FHSA provider must ensure that:

(a) if the person applies to become an FHSA holder, but does not

become an FHSA holder--the record is retained until the

time (the last retention time) at which the person ceases to be

an applicant; and

(b) if the person is or becomes a holder of an FHSA provided by

the FHSA provider--the record is retained until the later of

the following times (also the last retention time):

(i) the time the person ceases to be a holder of such an

FHSA;

(ii) the last time at which the FHSA provider needs to use

the tax file number in order to comply with its

obligations under Division 391 in Schedule 1 to the

Taxation Administration Act 1953.

Obligation to destroy tax file number record when no longer

required

(4) The FHSA provider must ensure that the record is destroyed as

soon as is reasonably practicable after the last retention time.

(5) Subsection (4) does not apply if the tax file number has also been

provided for another purpose and is still required for that purpose.

Use of tax file numbers to locate amounts

(6) Subject to subsection (7), the FHSA provider may use tax file

numbers quoted to it as mentioned in subsection (1) in order to

locate, in the records or accounts of the FHSA provider, amounts

held in FHSAs provided by it.

Admin istration Part 5

Tax file nu mbers Division 2

Section 61

First Home Saver Accounts Bill 2008 No. , 2008 51

Use of tax file numbers to identify FHSAs held by a particular

person

(7) If the FHSA provider needs to identify the FHSA held by a

particular person:

(a) the FHSA provider must first use information (other than tax

file numbers) to identify the FHSA; and

(b) the FHSA provider may only use the tax file number quoted

by the person to the FHSA provider:

(i) if the information referred to in paragraph (a) is

insufficient to identify the FHSA; or

(ii) to confirm the identification of the FHSA resulting from

the use of the other information.

Offences

(8) An FHSA provider commits an offence if it contravenes a

requirement of this section.

Penalty: 100 penalty units.

(9) An FHSA provider commits an offence if it contravenes a

requirement of this section. This is an offence of strict liability.

Penalty: 50 penalty units.

Note:

For strict liability, see section 6.1 of the Criminal Code.

61 FHSA provider must inform othe r FHSA provider or

superannuation provider of tax file number for certain

purposes

(1) This section applies if:

(a) a person is the holder of an FHSA provided by an FHSA

provider; and

(b) the holder has quoted (whether as a holder or as a person

applying to become a holder) his or her tax file number to the

FHSA provider in connection with the operation or the

possible future operation of this Act and the Superannuation

Acts.

Part 5 Ad min istration

Division 2 Tax file numbers

Section 62

52 First Home Saver Accounts Bill 2008 No. , 2008

Transfer of amounts in an FHSA to another FHSA

(2) If the FHSA provider transfers the balance of the FHSA to another

FHSA held by the holder, the FHSA provider must, at the time of

the transfer and in the approved form, inform the other FHSA

provider of the holder's tax file number.

Contribution of amounts in an FHSA to a complying

superannuation plan

(3) If the FHSA provider contributes any amount from the FHSA to a

complying superannuation plan for the benefit of the holder, the

FHSA provider must, at the time of the contribution and in the

approved form, inform the superannuation provider in relation to

the plan of the holder's tax file number.

Offences

(4) An FHSA provider commits an offence if it contravenes a

requirement of this section.

Penalty: 100 penalty units.

(5) An FHSA provider commits an offence if it contravenes a

requirement of this section. This is an offence of strict liability.

Penalty: 50 penalty units.

Note:

For strict liability, see section 6.1 of the Criminal Code.

Subdivision B--Method of quotation of tax file numbers,

including deemed quotation

62 Method of quoting tax file number

A person quotes his or her tax file number to another person in

connection with the operation or the possible future operation of

this Act and the Superannuation Acts if:

(a) the person informs the other person of the number in the

approved form; or

(b) the person is taken to have quoted the number to the other

person in connection with the operation or the possible future

Admin istration Part 5

Tax file nu mbers Division 2

Section 63

First Home Saver Accounts Bill 2008 No. , 2008 53

operation of this Act and the Superannuation Acts under any

of the following provisions of this Division.

63 FHSA holder taken to have quoted whe re Commissioner gives

notice

(1) An FHSA holder, or a person applying to become an FHSA holder,

is taken to have quoted his or her tax file number to an FHSA

provider in connection with the operation or the possible future

operation of this Act and the Superannuation Acts if the

Commissioner gives to the provider notice of the person's tax file

number.

(2) The holder or applicant is taken to have quoted that tax file number

at the time when the Commissioner gave the notice.

64 Information provided by FHSA provider taken to have been

provided by FHSA holder

(1) This section applies if, in accordance with subsection 61(2) or (3),

an FHSA provider (the first FHSA provider) informs another

FHSA provider (the second FHSA provider), or a superannuation

provider, of the tax file number of an FHSA holder.

(2) The FHSA holder is taken:

(a) to have quoted the tax file number to the second FHSA

provider or the superannuation provider in connection with

the operation or the possible future operation of this Act and

the Superannuation Acts; and

(b) to have quoted that tax file number at the time when the first

FHSA provider informs the second FHSA provider or the

superannuation provider.

65 FHSA holder or applicant taken to have quoted if he or she

quoted for other purposes

For the purposes of this Act, an FHSA holder, or a person applying

to become an FHSA holder, is taken to have quoted his or her tax

file number to the FHSA provider in connection with the operation

Part 5 Ad min istration

Division 2 Tax file numbers

Section 66

54 First Home Saver Accounts Bill 2008 No. , 2008

or the possible future operation of this Act and the Superannuation

Acts, if:

(a) the FHSA holder or applicant has quoted his or her tax file

number to the FHSA provider under a provision of:

(i) the Taxation Administration Act 1953; or

(ii) the Income Tax Assessment Act 1936; or

(iii) the Income Tax Assessment Act 1997; and

(b) the quotation was made on or after the commencement of this

Part.

Subdivision C--Incorrect quotation of tax file number

66 Effect of mistaken quotation of tax file numbe r

(1) The Commissioner may give an FHSA provider notice of the tax

file number of the holder of an FHSA if:

(a) the provider has made a record of a number (the recorded

TFN) the provider believes to be the tax file number of the

holder; and

(b) the Commissioner is satisfied that the recorded TFN:

(i) has been cancelled or withdrawn since it was quoted; or

(ii) is otherwise wrong; and

number.

(2) The holder is taken to have quoted his or her tax file number to the

provider in connection with the operation or the possible future

operation of this Act and the Superannuation Acts at a time if:

(a) the Commissioner gives the provider a notice under

subsection (1); and

(b) had the recorded TFN been the tax file number of the holder,

the holder would have quoted his or her tax file number to

the trustee in that way at the time.

67 Effect of invalid quotation of tax file number

(1) The Commissioner may give an FHSA provider a notice under

subsection (2) if:

Admin istration Part 5

Tax file nu mbers Division 2

Section 68

First Home Saver Accounts Bill 2008 No. , 2008 55

(a) the provider has made a record of a number (the recorded

TFN) the FHSA provider believes to be the tax file number

of the holder of an FHSA; and

(b) the Commissioner is satisfied that the recorded TFN:

(i) has been cancelled or withdrawn since it was quoted; or

(ii) is otherwise wrong; and

number.

(2) The notice must:

(a) identify the holder; and

(b) state that the Commissioner is not satisfied that the holder

has a tax file number; and

from the notice being given:

(i) section 22 (requirement to close inactive FHSA);

(ii) section 26 (limit on contributions to FHSA);

(iii) sections 32 and 35 (limit on payments from FHSA).

(3) If the Commissioner gives a notice under subsection (2), the

Commissioner must give a copy of the notice to the holder.

(4) If the Commissioner gives the FHSA provider notice of the

person's tax file number at a later time, the Commissioner must at

that time also give the FHSA provider a written revocation of the

notice under subsection (2).

Subdivision D--Provision of tax file numbers in forms etc.

68 Forms etc. may require tax file number

Application for approval

(1) The approved form of an application for authorisation as an FHSA

provider under section 89 may require the application to contain

the tax file number of the applicant.

Part 5 Ad min istration

Division 2 Tax file numbers

Section 69

56 First Home Saver Accounts Bill 2008 No. , 2008

Financial returns

(2) The form of a financial return a copy of which is required to be

given by an FHSA provider to APRA under section 13 of the

Financial Sector (Collection of Data) Act 2001 may require the

return to contain the provider's tax file number.

Application for FHSA

(3) The approved form of an application for an FHSA in accordance

with section 19 may require the application to contain the tax file

number of the applicant.

69 Failure to quote tax file number

(1) For the purposes of section 137.1 of the Criminal Code, a person

does not omit a matter or thing from a statement made to a person

covered under subsection (4) merely because the person has, in

making the statement, failed to quote his or her tax file number.

(2) For the purposes of subsection (1), a statement made to a person

covered under subsection (4) includes a statement made orally, in

writing, in a data processing device or in any other form.

(3) Without limiting subsection (2), a statement made to a person

covered under subsection (4) includes a statement:

(a) made in an application, notification, return or other document

made, prepared, given, or purporting to be made, prepared or

given, under this Act or the regulations; or

(b) made in answer to a question asked of a person under this

Act or the regulations; or

under this Act or the regulations; or

(d) made in a document given to a person covered under

subsection (4) otherwise than under this Act or the

regulations.

(4) A person is covered under this section if the person is exercising

powers or performing functions under or in relation to this Act or

the regulations.

Admin istration Part 5

Secrecy Division 3

Section 70

First Home Saver Accounts Bill 2008 No. , 2008 57

Division 3--Secrecy

70 Secrecy

Persons covered by this section

(1) This section applies to a person who is or has been:

(a) the Commissioner, a Second Commissioner or a Deputy

Commissioner; or

(b) a person engaged under the Public Service Act 1999 in the

Agency (within the meaning of that Act) of which the

Commissioner is the Agency Head; or

services for, the Commonwealth.

Information may be recorded or divulged only for purposes of Act

(2) A person to whom this section applies commits an offence if:

(a) the person:

(i) makes a record of any protected information; or

(ii) whether directly or indirectly, divulges or

communicates to a person any protected information

about another person; and

(b) the record is not made, or the information is not divulged or

communicated:

(i) under or for the purposes of this Act or the regulations;

(ii) in the performance of duties, as a person to whom this

section applies, under or in relation to this Act or the

regulations.

Penalty: Imprisonment for 2 years.

Information may be divulged to persons performing duties under

taxation law

(3) Subsection (2) does not prohibit the Commissioner, a Second

Commissioner or a Deputy Commissioner, or a person authorised

Part 5 Ad min istration

Division 3 Secrecy

Section 70

58 First Home Saver Accounts Bill 2008 No. , 2008

by any of them, from divulging or communicating any protected

information to a person performing, as a person to whom this

section applies, duties under, or in relation to, a taxation law for the

purpose of enabling the person to perform the duties.

Note:

In a prosecution for an offence against subsection (2), the defendant

bears an evidential burden in relation to the matters in this

subsection (see subsection 13.3(3) of the Criminal Code).

Divulging information to Minister

(4) A person divulges or communicates protected information to a

person in contravention of subsection (2) if the person divulges or

communicates the information to a Minister.

Court may not require information or documents

(5) A person to whom this section applies is not required:

(a) to divulge or communicate protected information to a court;

(b) to produce a protected document in court;

except where it is necessary to do so for the purpose of carrying

into effect the provisions of this Act or the regulations.

Information may be divulged to persons performing duties under

this Act

(6) Nothing in this Act or any other taxation law prohibits the

Commissioner, a Second Commissioner or a Deputy

Commissioner, or a person authorised by any of them, from

divulging or communicating any information to a person

performing, as a person to whom this section applies, duties under

or in relation to this Act or the regulations for the purpose of

enabling the person to perform the duties.

Note:

In a prosecution for an offence against subsection (2), the defendant

bears an evidential burden in relation to the matters in this

subsection (see subsection 13.3(3) of the Criminal Code).

Admin istration Part 5

Secrecy Division 3

Section 70

First Home Saver Accounts Bill 2008 No. , 2008 59

Information may be divulged to court for purposes of this Act

(7) Nothing in this Act or any other taxation law prohibits the

Commissioner, a Second Commissioner, a Deputy Commissioner,

or a person authorised by any of them, from:

(a) divulging or communicating to a court any information

obtained under or for the purposes of such an Act; or

(b) producing in court a document obtained or made under or for

the purposes of such an Act;

if it is necessary to do so for the purpose of carrying into effect the

provisions of this Act or the regulations.

Note:

In a prosecution for an offence against subsection (2), the defendant

bears an evidential burden in relation to the matters in this

subsection (see subsection 13.3(3) of the Criminal Code).

Oath, or affirmation, or declaration, of secrecy

(8) A person to whom this section applies must, if and when required

by the Commissioner, a Second Commissioner or a Deputy

Commissioner to do so, make an oath, or affirmation, or

declaration, in a manner and form determined by the

Commissioner in writing, to maintain secrecy in accordance with

this section.

Part 5 Ad min istration

Division 4 Rev iew o f decisions

Section 71

60 First Home Saver Accounts Bill 2008 No. , 2008

Division 4--Review of decisions

Subdivision A--Review of Commissioner decisions relating to

Government FHSA contributions

71 Review of decisions

(1) A person affected by a decision (the original decision) made by

the Commissioner under Division 2, 3 or 4 of Part 4 may apply to

the Commissioner for review of the decision.

(2) If the person does so, the Commissioner must either:

(a) review the original decision and decide to:

(i) affirm it; or

(ii) vary it; or

(iii) set it aside and substitute a new decision; or

(b) arrange for an authorised review officer (see section 72) to do

so.

(3) In making arrangements for a review under subsection (2), the

Commissioner must have regard to the need for the review to be an

independent one.

72 Authorised review officers

The Commissioner must authorise persons employed or engaged

under the Public Service Act 1999 who are exercising powers or

performing functions under, pursuant to or in relation to a taxation

law to be authorised review officers for the purposes of this

Division.

73 Withdrawal of review applications

(1) An applicant for review under section 71 may, in writing or in any

other manner approved by the Commissioner, withdraw the

application at any time before the reviewer of the decision does

any of the things in subsection 71(2).

Admin istration Part 5

Review of decisions Division 4

Section 74

First Home Saver Accounts Bill 2008 No. , 2008 61

(2) If an application is so withdrawn, it is taken never to have been

made.

Subdivision B--Review of certain APRA decisions

74 Reviewable decision

Each of the following decisions is a reviewable decision:

(a) a decision of APRA to make a Prudential Standard referred

to in paragraph 121(1)(c);

(b) a decision of APRA to vary or revoke a Prudential Standard

referred to in paragraph 121(1)(c);

application for an authorisation as an FHSA provider as

having been withdrawn;

(d) a decision of APRA under subsection 92(2) refusing an

application for an authorisation as an FHSA provider;

(e) a decision of APRA under subsection 98(1) to impose any

additional conditions on an authorisation as an FHSA

provider;

(f) a decision of APRA under subsection 101(2) to treat an

application for variation or revocation of a condition imposed

on an authorisation as an FHSA provider as having been

withdrawn;

(g) a decision of APRA to refuse to vary or revoke under

subsection 103(1) any conditions imposed on an

authorisation as an FHSA provider;

(h) a decision of APRA under subsection 104(1) to vary or

revoke any conditions imposed on an authorisation as an

FHSA provider;

(i) a decision of APRA under subsection 107(1) to cancel an

authorisation as an FHSA provider.

Part 5 Ad min istration

Division 4 Rev iew o f decisions

Section 75

62 First Home Saver Accounts Bill 2008 No. , 2008

75 Review of certain decisions

Request for review

(1) A person who is affected by a reviewable decision of APRA may,

if dissatisfied with the decision, request APRA to reconsider the

decision.

How request must be made

(2) The request must be made by written notice given to APRA within

the period of 21 days after the day on which the person first

receives notice of the decision, or within such further period as

APRA allows.

Request must set out reasons

(3) The request must set out the reasons for making the request.

APRA to reconsider decision

(4) Upon receipt of the request, APRA must reconsider the decision

and may, subject to subsection (5), confirm or revoke the decision

or vary the decision in such manner as APRA thinks fit.

Deemed confirmation of decision if delay

(5) If APRA does not confirm, revoke or vary a decision before the

end of the period of 60 days after the day on which APRA received

the request under subsection (1) to reconsider the decision, APRA

is taken, at the end of that period, to have confirmed the decision

under subsection (4).

Notice of APRA's action

(6) If APRA confirms, revokes or varies a decision before the end of

the period referred to in subsection (5), APRA must give written

notice to the person stating:

(a) the result of the reconsideration of the decision; and

(b) the reasons for confirming, varying or revoking the decision,

as the case may be.

Admin istration Part 5

Review of decisions Division 4

Section 76

First Home Saver Accounts Bill 2008 No. , 2008 63

AAT review of APRA's decisions

(7) Applications may be made to the Administrative Appeals Tribunal

for review of decisions of APRA that have been confirmed or

varied under subsection (4).

Period for making certain AAT applications

(8) If a decision is taken to be confirmed because of subsection (5),

section 29 of the Administrative Appeals Tribunal Act 1975 applies

as if the prescribed time for making application for review of the

decision were the period of 28 days beginning on the day on which

the decision is taken to be confirmed.

Only trustees affected by certain reviewable decisions

(9) For the purposes of this section and section 76, a person is taken

not to be affected by a reviewable decision mentioned in paragraph

74(f), (g) or (h) unless the person is a trustee of an FHSA trust that

is affected by the decision.

76 Statements to accompany notification of decisions

(1) If a written notice is given to a person affected by a reviewable

decision stating that the reviewable decision has been made, that

notice is to include a statement to the effect that:

(a) the person may, if dissatisfied with the decision, seek a

reconsideration of the decision by APRA in accordance with

subsection 75(1); and

(b) the person may, subject to the Administrative Appeals

Tribunal Act 1975, if dissatisfied with a decision made by

APRA upon that reconsideration confirming or varying the

first-mentioned decision, make application to the

Administrative Appeals Tribunal for review of the decision

so confirmed or varied.

(2) If APRA confirms or varies a reviewable decision under subsection

75(4) and gives to the person written notice of the confirmation or

variation of the decision, that notice is to include a statement to the

effect that the person may, subject to the Administrative Appeals

Tribunal Act 1975, if dissatisfied with the decision so confirmed or

Enforcement Part 6

Information gathering Division 1

Section 77

First Home Saver Accounts Bill 2008 No. , 2008 65

Part 6--Enforcement

Division 1--Information gathering

77 Commissioner may require person or legal representative to give

information

(1) The Commissioner may give a person, or the legal personal

representative of a person, a written notice requiring the person or

representative to give the Commissioner a statement setting out:

(a) information to enable the Commissioner to determine:

(i) whether a Government FHSA contribution is payable

for the person; or

(ii) the amount of any Government FHSA contribution

payable for the person; or

(b) information to enable the Commissioner to determine to

whom the Commissioner should pay a Government FHSA

contribution, or an underpaid amount, payable for the person;

(i) whether an amount is recoverable under section 50

(which deals with overpayments) in relation to a

Government FHSA contribution paid for the person; or

(ii) the overpaid amount in relation to a Government FHSA

contribution paid for the person; or

(d) any other matters relating to Government FHSA

contributions specified in the regulations.

The notice must specify the period within which the statement

must be given to the Commissioner. The period specified must end

not less than 21 days after the day on which the notice is given.

(2) The person or representative commits an offence if:

(a) the notice requires the person or representative to give the

Commissioner a statement setting out information to enable

the Commissioner to determine:

Part 6 Enforcement

Division 1 Information gathering

Section 78

66 First Home Saver Accounts Bill 2008 No. , 2008

(i) whether an amount is recoverable under section 50

(which deals with overpayments) in relation to a

Government FHSA contribution paid for the person; or

(ii) the overpaid amount in relation to a Government FHSA

contribution paid for the person; and

(b) the person or representative fails to comply with the notice.

Penalty: 30 penalty units.

(3) The Commissioner may give a notice under subsection (1) at any

time and from time to time.

78 Commissioner may require FHSA provider to give information

(1) The Commissioner may give an FHSA provider a written notice

requiring the provider to give the Commissioner a statement setting

out:

(a) information to enable the Commissioner to determine:

(i) whether a Government FHSA contribution is payable

for a person; or

(ii) the amount of any Government FHSA contribution

payable for a person; or

(b) information to enable the Commissioner to determine to

whom the Commissioner should pay a Government FHSA

contribution, or an underpaid amount, for a person; or

(i) whether an amount is recoverable under section 50

(which deals with overpayments) in relation to a

Government FHSA contribution paid for a person; or

(ii) the overpaid amount in relation to a Government FHSA

contribution paid for a person; or

(d) any other matters relating to Government FHSA

contributions specified by the regulations.

The notice must specify the period within which the statement

must be given to the Commissioner. The period specified must end

not less than 21 days after the day on which the notice is given.

(2) The FHSA provider commits an offence if the provider fails to

comply with the notice.

Enforcement Part 6

Information gathering Division 1

Section 79

First Home Saver Accounts Bill 2008 No. , 2008 67

Penalty: 30 penalty units.

(3) The Commissioner may give a notice under subsection (1) at any

time and from time to time.

79 Self-incrimination

(1) A person is not excused from giving a statement under section 77

or 78 on the ground that the statement might tend to incriminate the

person or make the person liable to a penalty.

(2) However, if the person is an individual, neither:

(a) the statement; nor

(b) anything obtained as a direct or indirect result of the giving

of the statement;

is admissible in evidence against the individual in any criminal

proceedings (other than proceedings for an offence against

section 77 or 78 of this Act or proceedings for an offence against

section 137.1 or 137.2 of the Criminal Code that relates to this

Act).

Part 6 Enforcement

Division 2 Access to premises

Section 80

68 First Home Saver Accounts Bill 2008 No. , 2008

Division 2--Access to premises

80 Appointment of authorised persons

The Commissioner may, by writing signed by the Commissioner,

appoint a person:

(a) appointed or engaged under the Public Service Act 1999; and

(b) performing duties in the Australian Taxation Office;

to be an authorised person for the purposes of this Division or of a

specified provision of this Division.

81 Powe rs of authorised person in relation to pre mises

(1) An authorised person may:

(a) with the consent of the occupier or person in charge of

premises; or

(b) in accordance with a warrant issued under section 87 in

relation to premises;

enter the premises for the purposes of:

(i) whether a Government FHSA contribution is payable

for a person; or

(ii) the amount of a Government FHSA contribution that is

payable for a person; or

(iii) whether an amount is recoverable under section 50

(which deals with overpayments) in relation to a

Government FHSA contribution paid for a person; or

(iv) the overpaid amount in relation to a Government FHSA

contribution for a person; or

(d) ascertaining whether a person has contravened or is

contravening a provision of this Act.

(2) If an authorised person enters any premises under subsection (1),

the authorised person may search the premises for, inspect,

examine, take extracts from, and make copies of, any examinable

documents.

Enforcement Part 6

Access to premises Division 2

Section 82

First Home Saver Accounts Bill 2008 No. , 2008 69

82 Obligations of authorised pe rsons--all cases

(1) An authorised person is authorised to enter premises in accordance

with subsection 81(1) only if:

(a) the authorised person has shown his or her identity card, if

required by the occupier or person in charge of the premises;

and

(b) the authorised person has given the occupier or person in

charge of the premises a written statement of the occupier's

or person's rights and obligations in relation to the authorised

person's proposed entry onto the premises.

(2) An authorised person is not entitled to exercise any powers under

this Division in relation to premises if, after entering the premises:

(a) the occupier or person in charge of the premises has required

the authorised person to produce his or her identity card for

inspection; and

(b) the authorised person fails to comply with the requirement.

83 Obligations of authorised pe rsons--entry by consent

(1) An authorised person is authorised to enter premises in accordance

with paragraph 81(1)(a) only if the authorised person has informed

the occupier or person in charge of the premises that the occupier

or person may refuse consent.

(2) If an authorised person is on premises by consent in accordance

with paragraph 81(1)(a), the authorised person must leave the

premises if the occupier or person in charge of the premises asks

the authorised person to do so.

84 Obligations of authorised pe rsons--entry by warrant

(1) An authorised person must, before entering premises under a

warrant issued under section 87:

(a) announce that he or she is authorised to enter the premises;

and

(b) give any person at the premises an opportunity to allow entry

to the premises.

Part 6 Enforcement

Division 2 Access to premises

Section 85

70 First Home Saver Accounts Bill 2008 No. , 2008

(2) An authorised person is not required to comply with subsection (1)

if he or she believes on reasonable grounds that immediate entry to

the premises is required to ensure that the effective execution of

the warrant is not frustrated.

(3) If, when executing the warrant, the occupier or person in charge of

the premises is present at the premises, the authorised person must

make available to the occupier or person a copy of the warrant.

(4) The authorised person must identify himself or herself to the

occupier or person.

(5) The copy of the warrant referred to in subsection (3) need not

include the signature of the magistrate who issued the warrant.

85 Obstruction of authorised person acting under a warrant

A person commits an offence if:

(a) the person obstructs or hinders an authorised person in the

exercise of the authorised person's power under section 81;

and

(b) the authorised person exercises that power in accordance

with a warrant issued under section 87.

Penalty: 30 penalty units.

86 Persons to assist authorised persons acting under a warrant

(1) If an authorised person enters any premises in accordance with

paragraph 81(1)(b), the occupier or the person in charge of the

premises must, if requested to do so by the authorised person,

provide reasonable assistance to the authorised person in the

exercise of his or her power under that section in relation to those

premises.

(2) The occupier or the person in charge of the premises commits an

offence if he or she fails to provide that reasonable assistance to the

authorised person.

Penalty: 30 penalty units.

Enforcement Part 6

Access to premises Division 2

Section 87

First Home Saver Accounts Bill 2008 No. , 2008 71

87 Issue of warrant to enter premises

(1) If a magistrate, on application by an authorised person, is satisfied,

by information on oath or affirmation:

(a) that there are reasonable grounds for believing that there are

examinable documents on particular premises of an FHSA

provider; and

(b) that the issue of the warrant is reasonably required for the

purpose of ascertaining:

(i) whether a Government FHSA contribution is payable

for a person; or

(ii) the amount of a Government FHSA contribution that is

payable for a person; or

(iii) whether an amount is recoverable under section 50

(which deals with overpayments) in relation to a

Government FHSA contribution paid for a person; or

(iv) the overpaid amount in relation to a Government FHSA

contribution for a person; or

(v) whether a person has contravened or is contravening a

provision of this Act;

the magistrate may issue a warrant authorising the authorised

person to enter the premises:

(d) during such hours as the warrant specifies, or, if the warrant

so specifies, at any time.

(2) A warrant must specify:

(a) the powers exercisable under subsection 81(2) by the

authorised person to whom the warrant is issued; and

(b) the day (not more than 14 days after the issue of the warrant)

on which the warrant ceases to have effect; and

(3) The function of issuing a warrant is conferred on the magistrate in

a personal capacity and not as a court or a member of a court. The

magistrate need not accept the function conferred.

Part 6 Enforcement

Division 2 Access to premises

Section 88

72 First Home Saver Accounts Bill 2008 No. , 2008

88 Identity cards

(1) The Commissioner may cause an identity card to be issued to an

authorised person.

(2) An identity card must:

(a) contain a recent photograph of the authorised person to

whom it is issued; and

(b) be in a form approved, in writing, by the Commissioner.

(3) A person commits an offence if:

(a) the person has been issued with an identity card under

subsection (1); and

(b) the person ceases to be an authorised person for the purposes

of this Division; and

the Commissioner.

Penalty: 1 penalty unit.

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 89

First Home Saver Accounts Bill 2008 No. , 2008 73

Part 7--Prudential provisions

Division 1--Authorisation of RSE licensees as FHSA

providers

Subdivision A--Applying for authorisation as FHSA provider

89 RSE licensee applications for authorisation as FHSA providers

Who may apply for authorisation as FHSA provider

(1) An RSE licensee that holds an RSE licence of a class that would

enable it to be a trustee of a public offer entity may apply to APRA

for an authorisation as an FHSA provider.

Requirements for applications

(2) An application for an authorisation as an FHSA provider must:

(a) be in the approved form; and

(b) contain the information required by the approved form; and

regulations made for the purposes of this paragraph.

Note:

The approved form may require the application to contain the tax file

number of the applicant (see section 68).

90 APRA may request further information

(1) APRA may give an applicant for an authorisation as an FHSA

provider a notice, in writing, requesting it to give specified

information relating to the application to APRA by a specified

time. The specified time must be reasonable in the circumstances.

(2) APRA may decide to treat the application as having been

withdrawn if the applicant:

(a) does not comply with a request to provide information under

this section; and

(b) does not have a reasonable excuse for not complying.

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 91

74 First Home Saver Accounts Bill 2008 No. , 2008

(3) If APRA decides under subsection (2) to treat the application as

having been withdrawn, APRA must take all reasonable steps to

ensure that the applicant is given a notice informing the applicant

of:

(a) APRA's decision; and

(b) the reasons for that decision;

as soon as practicable after making the decision.

91 Period within which application is to be decided

(1) APRA must decide an application for an authorisation as an FHSA

provider within 30 days after receiving the application unless

APRA extends the period for deciding the application under

subsection (2).

(2) APRA may extend the period for deciding an application by up to

14 days if APRA informs the applicant of the extension:

(a) in writing; and

(b) within 30 days after receiving the application.

(3) If APRA extends the period for deciding an application, it must

decide the application within the extended period.

(4) If APRA has not decided an application by the end of the period in

which it is required to decide the application, APRA is taken to

have decided, at the end of the last day of that period, to refuse the

application.

Subdivision B--Grant of authorisation as FHSA provider

92 Grant of authorisation as FHSA provider

(1) APRA must grant an authorisation as an FHSA provider to an

applicant if, and only if:

(a) APRA has no reason to believe that the applicant would fail

to comply with this Act, the regulations or the Prudential

Standards if the authorisation were granted; and

(b) APRA has no reason to believe that the applicant would fail

to comply with any condition imposed on the authorisation if

it were granted; and

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 93

First Home Saver Accounts Bill 2008 No. , 2008 75

(d) APRA is satisfied that the applicant holds an RSE licence of

a class that would enable it to be a trustee of a public offer

entity; and

(e) APRA is satisfied that the applicant meets the capital

requirements under section 93; and

(f) the application has not been withdrawn, treated as withdrawn

under subsection 90(2) or taken to have been refused under

subsection 91(4).

Note:

Conditions apply to every authorisation as an FHSA provider. See

Subdivision C.

(2) Otherwise APRA must refuse the application.

93 Capital require ments

(1) The capital requirements under this section are met by an applicant

if it satisfies at least one of the following subsections.

(2) An applicant satisfies this subsection if it satisfies subsection

29DA(2) of the Superannuation Industry (Supervision) Act 1993.

(3) An applicant satisfies this subsection if:

(a) it satisfies subsection 29DA(3) of the Superannuation

Industry (Supervision) Act 1993 because it is entitled to the

benefit of an approved guarantee (within the meaning of that

Act); and

(b) the approved guarantee is also in respect of its duties as

trustee of each FHSA trust of which it is, or is proposing to

become, the trustee.

(4) An applicant satisfies this subsection if:

(a) it satisfies subsection 29DA(4) of the Superannuation

Industry (Supervision) Act 1993 because it is entitled to the

benefit of an approved guarantee (within the meaning of that

Act); and

(b) the approved guarantee is also in respect of its duties as

trustee of each FHSA trust of which it is, or is proposing to

become, the trustee.

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 94

76 First Home Saver Accounts Bill 2008 No. , 2008

(5) An applicant satisfies this subsection if:

(a) it satisfies subsection 29DA(5) of the Superannuation

Industry (Supervision) Act 1993; and

(b) it has agreed, in writing, to comply with written requirements

that have been given to it by APRA; and

each FHSA trust of which it is, or is proposing to become,

the trustee.

94 Documents required to bear ABN

(1) An RSE licensee that is an FHSA provider must ensure that its

ABN is included in:

(a) each document that it gives to APRA in the capacity of an

FHSA provider; and

(b) any other document in which it identifies itself as an FHSA

provider; and

FHSA trust.

(2) An RSE licensee that is an FHSA provider must ensure that the

ABN of an FHSA trust of which it the trustee is included in:

(a) each document that it gives to APRA in the capacity of the

trustee of the trust; and

(b) any document in which it identifies itself as the trustee of the

trust.

(3) However, an RSE licensee is not required to comply with

subsection (1) in respect of a particular document if it has been

given written approval by APRA not to be required to ensure that

the ABN is included in that document or in a class of documents

that includes that document.

95 When an authorisation is in force

(1) An authorisation as an FHSA provider comes into force at the later

of:

(a) the time when it is granted; or

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 96

First Home Saver Accounts Bill 2008 No. , 2008 77

(b) the time specified in the authorisation as the time when it

comes into force.

(2) An authorisation as an FHSA provider continues in force, subject

to:

(a) any imposition of conditions under Subdivision C; or

(b) any variation or revocation of those conditions under

Subdivision D;

until the authorisation is cancelled under Subdivision E.

96 APRA to give notice of refusal of applications

If APRA refuses an application for an authorisation as an FHSA

provider, APRA must take all reasonable steps to ensure that the

applicant is given a notice informing it of:

(a) APRA's refusal of the application; and

(b) the reasons for that refusal;

as soon as practicable after refusing the application.

Subdivision C--Conditions on authorisation as FHSA provider

97 Conditions imposed on all authorisations

(1) The following conditions are imposed on all authorisations as an

FHSA provider:

(a) the FHSA provider must comply with this Act, the

regulations and the Prudential Standards;

(b) the FHSA provider must perform properly the duties of a

trustee in respect of each FHSA trust of which it is the

trustee;

which it is the trustee is maintained solely in respect of the

provision of FHSAs;

(d) the FHSA provider must continue to meet the capital

requirements under section 93;

(e) the FHSA provider must continue to hold an RSE licence of a

class that would enable it to be a trustee of a public offer

entity;

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 98

78 First Home Saver Accounts Bill 2008 No. , 2008

(f) the FHSA provider must comply with any other conditions

specified by regulations made for the purposes of this

paragraph.

Note 1:

Breach of a condition may lead to consequences such as a direction

from APRA to comply with the condition (see section 99) or

cancellation of the authorisation (see section 107).

Note 2:

An FHSA provider must notify APRA of certain breaches of

conditions: see section 111.

Note 3:

Additional conditions may be imposed on various types of

authorisation (see subsection (2)) or a particular authorisation (see

section 98).

(2) An additional condition specified by a regulation made for the

purposes of this subsection as a condition applying to all

authorisations of a specified class is imposed on each authorisation

of that class.

98 Additional conditions imposed by APRA on individual

authorisations

(1) APRA may, at any time, impose an additional condition on an

authorisation as an FHSA provider by giving the FHSA provider a

notice setting out the additional condition.

(2) A condition imposed under subsection (1) must not be inconsistent

with the following:

(a) any condition imposed by, or under, section 97 on an

authorisation as an FHSA provider;

(b) any condition imposed on the RSE licence of the FHSA

provider under the Superannuation Industry (Supervision)

Act 1993.

Note 1:

Breach of a condition may lead to consequences such as a direction

from APRA to comply with the condition (see section 99) or

cancellation of the authorisation (see section 107).

Note 2:

An FHSA provider must notify APRA of certain breaches of

conditions (see section 111).

Note 3:

FHSA providers may apply to APRA to have conditions imposed

under this section varied or revoked (see section 100).

(3) If the FHSA provider is also a financial services licensee:

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 99

First Home Saver Accounts Bill 2008 No. , 2008 79

(a) APRA must consult ASIC before imposing a condition that,

in APRA's opinion, might reasonably be expected to affect

the FHSA provider's ability to provide one or more of the

financial services (within the meaning of the Corporations

Act 2001) that the FHSA provider provides; and

(b) APRA must inform ASIC about the imposition of any

condition not covered by paragraph (a) within one week after

the condition is imposed.

(4) A failure to comply with a requirement of subsection (3) does not

affect the validity of the imposition of any condition.

(5) An additional condition imposed under this section comes into

force on the later of:

(a) the day on which APRA gives the FHSA provider the notice

of the condition; or

(b) the day specified in the notice as the day on which the

condition comes into force.

99 Directions to comply with conditions on authorisation

APRA may direct an FHSA provider to comply with a specified

condition on its authorisation as an FHSA provider by a specified

time if APRA has reasonable grounds to believe that the FHSA

provider has breached the condition. The direction must:

(a) be by notice in writing given to the FHSA provider; and

(b) specify a time that is reasonable in the circumstances.

Note:

A failure to comply with a direction may lead to cancellation of the

authorisation (see section 107) and may be an offence (see

section 112).

Subdivision D--Variation or revocation of condition on

authorisation as FHSA provider

100 Applications for variation or revocation of condition on

authorisation as FHSA provider

(1) An FHSA provider may apply to APRA for variation or revocation

of a condition that APRA has imposed on its authorisation as an

FHSA provider under section 98.

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 101

80 First Home Saver Accounts Bill 2008 No. , 2008

(2) An application under this section must:

(a) be in the approved form; and

(b) contain the information required by the approved form.

101 APRA may request further information

(1) APRA may give an FHSA provider that makes an application

under section 100 a notice requesting the FHSA provider to give

APRA, in writing, specified information relating to the application

by a specified time that is reasonable in the circumstances.

(2) APRA may decide to treat an application under section 100 as

having been withdrawn if the FHSA provider:

(a) does not comply with a request to provide information under

this section; and

(b) does not have a reasonable excuse for not complying.

(3) If APRA decides to treat an application under section 100 as

having been withdrawn, APRA must take all reasonable steps to

ensure that the FHSA provider is given a notice informing it of:

(a) APRA's decision; and

(b) the reasons for that decision;

as soon as practicable after making the decision.

102 Period for deciding applications

(1) APRA must decide an application under section 100 within 30

days of receiving the application, unless APRA extends the period

for deciding the application under subsection (2).

(2) APRA may extend the period for deciding an application under

section 100 by up to 14 days if APRA informs the FHSA provider

of the extension:

(a) in writing; and

(b) within 30 days after receiving the application.

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 103

First Home Saver Accounts Bill 2008 No. , 2008 81

(3) If APRA extends the period for deciding an application under

section 100, it must decide the application within the extended

period.

(4) If APRA has not decided an application under section 100 by the

end of the period by which it is required to decide the application,

APRA is taken to have decided, at the end of the last day of that

period, to refuse the application.

103 APRA may vary or revoke conditions on authorisation--in

accordance with application

(1) If an FHSA provider makes an application in accordance with

section 100, APRA may vary or revoke a condition that APRA has

imposed under section 98 on the FHSA provider's authorisation as

an FHSA provider.

(2) However:

(a) a condition as varied must not be inconsistent with the

following:

(i) any condition imposed by section 97;

(ii) any condition imposed on the RSE licence of the FHSA

provider under the Superannuation Industry

(Supervision) Act 1993; and

(b) if the FHSA provider is also a financial services licensee:

(i) APRA must consult ASIC before varying or revoking a

condition that, in APRA's opinion, might reasonably be

expected to affect the FHSA provider's ability to

provide one or more of the financial services (within the

meaning of the Corporations Act 2001) that the FHSA

provider provides; and

(ii) APRA must consult ASIC before varying a condition so

that it would, in APRA's opinion, become a condition

that might reasonably be expected to have an effect as

described in subparagraph (ii); and

(iii) APRA must inform ASIC about the variation or

revocation of any condition not covered by

subparagraph (i) or (ii) within one week after the

condition is varied or revoked.

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 104

82 First Home Saver Accounts Bill 2008 No. , 2008

(3) A failure to comply with a requirement of paragraph (2)(b) does

not invalidate the variation or revocation of a condition.

(4) APRA is not required to vary or revoke any condition on an

authorisation as an FHSA provider in the terms requested by an

FHSA provider in an application under section 100.

104 APRA may vary or revoke conditions on authorisation--on its

own initiative

(1) APRA may, on its own initiative, vary or revoke any condition that

it imposed on an authorisation as an FHSA provider under

section 98.

(2) However:

(a) a condition as varied must not be inconsistent with the

following:

(i) any condition imposed by section 97;

(ii) any condition imposed on the RSE licence of the FHSA

provider under the Superannuation Industry

(Supervision) Act 1993; and

(b) if the FHSA provider is also a financial services licensee:

(i) APRA must consult ASIC before varying or revoking a

condition that, in APRA's opinion, might reasonably be

expected to affect the FHSA provider's ability to

provide one or more of the financial services (within the

meaning of the Corporations Act 2001) that the FHSA

provider provides; and

(ii) APRA must consult ASIC before varying a condition so

that it would, in APRA's opinion, become a condition

that might reasonably be expected to have an effect as

described in subparagraph (i); and

(iii) APRA must inform ASIC about the variation or

revocation of any condition not covered by

subparagraph (i) or (ii) within one week after the

condition is varied or revoked.

(3) A failure to comply with a requirement of paragraph (2)(b) does

not affect the validity of the variation or revocation of a condition.

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 105

First Home Saver Accounts Bill 2008 No. , 2008 83

105 Notification of APRA's decisions unde r this Division

(1) APRA must give a notice to an FHSA provider if APRA varies or

revokes, under section 103 or 104, a condition on the FHSA

provider's authorisation as an FHSA provider.

(2) The notice must:

(a) identify the authorisation condition being varied or revoked;

and

(b) specify any conditions imposed under section 98 to which the

authorisation is subject after the variation or revocation

comes into force; and

(d) specify the day, not earlier than the day on which APRA

gives the notice, on which the variation or revocation comes

into force.

(3) If APRA refuses an application for a variation or revocation under

section 103, APRA must take all reasonable steps to ensure that the

applicant is given a notice informing it of:

(a) APRA's refusal of the application; and

(b) the reasons for the refusal;

as soon as practicable after refusing the application.

106 When variations or revocations come into force etc.

(1) If, under section 103 or 104, APRA varies a condition imposed on

an authorisation as an FHSA provider:

(a) the variation comes into force on the day specified in the

notice under paragraph 105(2)(d); and

(b) the variation remains in force until:

(i) the condition is varied in an inconsistent manner; or

(ii) the condition is revoked; or

(iii) the authorisation is cancelled.

(2) If, under section 103 or 104, APRA revokes a condition imposed

on an authorisation as an FHSA provider, the revocation comes

into force on the day specified in the notice under paragraph

105(2)(d).

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 107

84 First Home Saver Accounts Bill 2008 No. , 2008

Subdivision E--Cancelling authorisation as FHSA provider

107 Cancellation of authorisation as FHSA provider

(1) Subject to subsection (3), APRA may, in writing, cancel an

authorisation as an FHSA provider.

Note:

In some circumstances, APRA must inform or consult ASIC before

cancelling an authorisation (see section 108).

(2) Without limiting subsection (1), APRA may cancel an

authorisation as an FHSA provider under that subsection if:

(a) the FHSA provider has requested, in the approved form, that

the authorisation be cancelled; or

(b) the FHSA provider is a disqualified person for the purposes

of Part 15 of the Superannuation Industry (Supervision) Act

1993 (as that Part applies under subsection 114(2)); or

authorisation; or

(d) APRA has reason to believe that the FHSA provider will

breach a condition imposed on the authorisation; or

(e) the FHSA provider has failed to comply with a direction by

APRA under section 99; or

(f) APRA has reason to believe that the FHSA provider will fail

to comply with a direction by APRA under section 99.

(3) If APRA cancels an authorisation as an FHSA provider it must

take all reasonable steps to ensure that the FHSA provider is given

a notice informing it:

(a) that APRA has cancelled the authorisation; and

(b) of the reasons for the cancellation.

108 Cancellation of authorisation for FHSA provider that is

financial services licensee

(1) Before cancelling the authorisation as an FHSA provider of an

FHSA provider that is also a financial services licensee, APRA

must consult ASIC if, in APRA's opinion, the cancellation might

reasonably be expected to affect the FHSA provider's ability to

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 109

First Home Saver Accounts Bill 2008 No. , 2008 85

provide one or more of the financial services (within the meaning

of the Corporations Act 2001) that the FHSA provider provides.

(2) If APRA cancels the authorisation as an FHSA provider of an

FHSA provider that is also a financial services licensee, APRA

must inform ASIC of the cancellation within one week after the

cancellation.

(3) A failure to comply with a requirement of this section does not

affect the validity of the cancellation of an authorisation as an

FHSA provider.

109 APRA may allow authorisation as FHSA provider to continue in

effect

In a notice that APRA gives to an FHSA provider cancelling its

authorisation as an FHSA provider, APRA may specify that the

authorisation continues in effect as though the cancellation had not

happened for the purposes of:

(a) a specified provision, administered by APRA, of this Act or

the regulations; or

(b) the Prudential Standards; or

law of the Commonwealth;

in relation to specified matters, a specified period, or both.

Subdivision F--Offences and self-incrimination

110 Providing an FHSA while unauthorised etc.

(1) A person commits an offence if:

(a) the person purports to provide an FHSA; and

(b) the person is not an RSE licensee that holds an authorisation

as an FHSA provider; and

(i) the person is not an ADI; or

(ii) the person is an ADI with an authority granted under

section 9 of the Banking Act 1959 that does not allow

the person to provide an FHSA; and

Part 7 Prudential provisions

Division 1 Authorisation of RSE licensees as FHSA providers

Section 111

86 First Home Saver Accounts Bill 2008 No. , 2008

(d) either:

(i) the person is not a life insurance company; or

(ii) the person is a life insurance company with conditions

of registration imposed under section 22 of the Life

Insurance Act 1995 that do not allow the person to

provide an FHSA.

(2) A person that contravenes subsection (1) commits an offence.

Penalty: Imprisonment for 2 years, or 120 penalty units, or both.

(3) This section does not prevent an FHSA provider from engaging or

authorising persons to act on its behalf.

111 Failing to notify breach of condition on authorisation

(1) If an FHSA provider becomes aware that:

(a) the FHSA provider has breached or will breach a condition

imposed on its authorisation as an FHSA provider; and

(b) the breach is or will be significant (see subsection (2));

the FHSA provider must give APRA a written report about the

breach as soon as practicable, and in any case no later than 10

business days, after becoming aware of the breach.

(2) For the purposes of subsection (1), a breach is or will be

significant if the breach is or will be significant having regard to

any one or more of the following factors:

(a) the number or frequency of similar previous breaches;

(b) the impact the breach has or will have on the FHSA

provider's ability to fulfil its obligations as an FHSA

provider;

provider's arrangements to ensure compliance with this Act,

the regulations and the Prudential Standards might be

inadequate;

(d) the actual or potential financial loss arising or that will arise

from the breach to the holders of FHSAs provided by the

FHSA provider;

(e) any other matters specified in regulations made for the

purposes of this paragraph.

Prudential provisions Part 7

Authorisation of RSE licensees as FHSA providers Division 1

Section 112

First Home Saver Accounts Bill 2008 No. , 2008 87

(3) A person commits an offence if:

(a) the person is an FHSA provider; and

(b) the person is in breach of subsection (1).

Penalty: 50 penalty units.

(4) Subsection (2) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

112 Not complying with direction to comply with condition on

authorisation

(1) An FHSA provider must comply with a direction given to it under

section 99 within the time specified in the direction.

(2) A person commits an offence if:

(a) the person is an FHSA provider; and

(b) the person is in breach of subsection (1).

Penalty: 60 penalty units.

(3) Subsection (2) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

113 Breach does not affect validity of issue of FHSA etc.

A contravention of section 110, 111 or 112 does not affect the

validity of a transaction.

Part 7 Prudential provisions

Division 2 Application of the Superannuation Industry (Supervision) Act 1993

Section 114

88 First Home Saver Accounts Bill 2008 No. , 2008

Division 2--Application of the Superannuation Industry

(Supervision) Act 1993

114 Modified application of the Superannuation Industry

(Supervision) Act 1993

(1) The object of this section is to apply certain prudential provisions

of the Superannuation Industry (Supervision) Act 1993 to RSE

licensees that hold an authorisation as an FHSA provider.

(2) For the purposes of this Act, the provisions of the Superannuation

Industry (Supervision) Act 1993 apply:

(a) to an FHSA provider that holds such an authorisation in the

same way that they apply to an RSE licensee that is a trustee

of a public offer superannuation fund; and

(b) to an FHSA trust in the same way that they apply to a public

offer superannuation fund; and

provider in the same way that they apply to a beneficiary or

member of a public offer superannuation fund; and

(d) to an FHSA provided by such an FHSA provider in the same

way that they apply to a superannuation interest.

Example: An FHSA provider that is the trustee of an FHSA trust may commit an

offence under section 35A of the Superannuation Industry

(Supervision) Act 1993 as applied by this section if the provider fails

to comply with the obligations in section 35A concerning the

accounting records of the FHSA trust.

(3) However:

(a) subsection (2) does not apply to the provisions of the

Superannuation Industry (Supervision) Act 1993 mentioned

in section 115; and

(b) the remaining provisions of that Act apply under

subsection (2) as modified by this Division.

Prudential provisions Part 7

Application of the Superannuation Industry (Supervision) Act 1993 Division 2

Section 115

First Home Saver Accounts Bill 2008 No. , 2008 89

115 Provisions of the Superannuation Industry (Supervision) Act 1993

that do not apply

For the purposes of paragraph 114(3)(a), the provisions of the

Superannuation Industry (Supervision) Act 1993 that do not apply

are as follows:

(a) sections 1 to 4 and section 10A;

(b) Parts 2A, 2B and 3;

(d) sections 54 and 55A and subsection 59(1A);

(e) Part 7, other than:

(i) sections 65 and 66; and

(ii) subsections 67(1), (2), (3) and (7); and

(iii) section 68;

(f) Part 8, other than:

(i) sections 69, 70B, 70C, 70D, 70E, 71D, 71E, 73, 75, 83,

84 and 85; and

(ii) section 71 (other than paragraph 71(1)(c));

(g) Parts 9 to 11;

(h) sections 104, 107, 108, 117 and 118;

(i) Parts 24, 24A, 24B and 25A;

(j) sections 337A, 342, 349, 349A and 353;

(k) Part 32.

116 General modifications of applicable provisions of the

Superannuation Industry (Supervision) Act 1993

The provisions of the Superannuation Industry (Supervision) Act

1993 that apply for the purposes of this Act under subsection

114(2) apply with the following modifications:

(a) treat references to "this Act" as references to this Act

(including provisions of the Superannuation Industry

(Supervision) Act 1993 that apply for the purposes of this

Act);

(b) treat references to "the regulations" as references to the

regulations under this Act;

Part 7 Prudential provisions

Division 2 Application of the Superannuation Industry (Supervision) Act 1993

Section 117

90 First Home Saver Accounts Bill 2008 No. , 2008

financial year;

(d) treat conduct (including an omission) that is inconsistent with

the Prudential Standards in the same way as conduct

(including an omission) that is inconsistent with the

Superannuation Industry (Supervision) Act 1993;

(e) treat conduct (including an omission) that is required or

authorised by, or otherwise performed in connection with, the

Prudential Standards in the same way as conduct (including

an omission) that is required or authorised by, or otherwise

performed in connection with, the Superannuation Industry

(Supervision) Act 1993.

117 References to Prudential Standards

(1) The Superannuation Industry (Supervision) Act 1993 applies in

accordance with subsection 114(2) with the modifications set out

in this section.

(2) Treat the reference in paragraph 130A(a) of the Superannuation

Industry (Supervision) Act 1993 to "this Act" as including the

Prudential Standards.

(3) Insert after paragraph 133(1)(c) of the Superannuation Industry

(Supervision) Act 1993 the following paragraph:

(d) the FHSA provider breaches:

(i) the Prudential Standards; or

(ii) its authorisation as an FHSA provider; or

(4) Insert after paragraph 135(1)(c) of the Superannuation Industry

(Supervision) Act 1993 the following paragraph:

(ca) the Prudential Standards; and

(5) Treat the reference in paragraph 139(b) of the Superannuation

Industry (Supervision) Act 1993 to "this Act" as including the

Prudential Standards.

(6) Treat the reference in subsection 320(1) of the Superannuation

Industry (Supervision) Act 1993 to "this Act" as including the

Prudential Standards.

Prudential provisions Part 7

Application of the Superannuation Industry (Supervision) Act 1993 Division 2

Section 118

First Home Saver Accounts Bill 2008 No. , 2008 91

(7) Treat the reference in section 341 of the Superannuation Industry

(Supervision) Act 1993 to "this Act" as including the Prudential

Standards.

118 Persons who may be appointed to be custodians of FHSA

trusts--approved guarantee etc.

The requirement in paragraph 123(1)(b) of the Superannuation

Industry (Supervision) Act 1993 is satisfied in relation to a person

who is the custodian of an FHSA trust if:

(a) the person satisfies the requirement in that paragraph in

relation to the person's duties as the custodian of a

superannuation entity, because of an approved guarantee; and

(b) the trustee of the FHSA trust is also entitled to the benefit of

the approved guarantee in respect of the due performance of

the person's duties as custodian of the FHSA trust.

119 Transfer of FHSA trusts

(1) The Superannuation Industry (Supervision) Act 1993 applies in

accordance with subsection 114(2) with the modifications set out

in this section.

(2) Omit references in Part 18 of the Superannuation Industry

(Supervision) Act 1993 to an approved deposit fund.

(3) Replace paragraph 146(1)(d) of the Superannuation Industry

(Supervision) Act 1993 with the following paragraph:

(d) the transferee fund has an RSE licensee that holds an

authorisation as an FHSA provider.

120 Covenants to be included in gove rning rules--investment

manage ment

(1) The Superannuation Industry (Supervision) Act 1993 applies in

accordance with subsection 114(2) with the modifications set out

in this section.

Part 7 Prudential provisions

Division 2 Application of the Superannuation Industry (Supervision) Act 1993

Section 120

92 First Home Saver Accounts Bill 2008 No. , 2008

(2) Insert at the beginning of paragraph 52(2)(f) of the Superannuation

Industry (Supervision) Act 1993 "if paragraph (fa) does not

apply--".

(3) Add at the end of paragraph 52(2)(f) of the Superannuation

Industry (Supervision) Act 1993 the following subparagraph:

(v) the risk of capital losses in light of the purpose of the

FHSA and the minimum term of the FHSA having

regard to subparagraph 32(1)(c)(i) or (ii) of the First

Home Saver Accounts Act 2008;

(4) Insert after paragraph 52(2)(f) of the Superannuation Industry

(Supervision) Act 1993 the following paragraph:

(fa) if the FHSA provider allows individual FHSA holders to

choose between investment options specified by the FHSA

provider--to formulate and give effect to an investment

strategy for each option having regard to the matters

mentioned in subparagraphs 52(2)(f)(i), (ii), (iii), (iv) and (v);

(5) Omit subsection 52(4) of the Superannuation Industry

(Supervision) Act 1993.

(6) Treat the reference in subsection 55(5) of the Superannuation

Industry (Supervision) Act 1993 to "an investment strategy

formulated under a covenant referred to in paragraph 52(2)(f)" as

including a reference to an investment option formulated under a

covenant referred to in paragraph 52(2)(fa) of that Act (as it applies

because of subsection (4) of this section).

(7) Replace paragraph 58(2)(d) of the Superannuation Industry

(Supervision) Act 1993 with the following paragraph:

(d) a direction given by an FHSA holder by way of a choice

mentioned in paragraph 52(2)(fa); or

Prudential provisions Part 7

Prudential Standards Division 3

Section 121

First Home Saver Accounts Bill 2008 No. , 2008 93

Division 3--Prudential Standards

121 Prudential Standards

(1) APRA may, in writing, determine standards (known as Prudential

Standards) in relation to prudential matters to be complied with

by:

(a) all RSE licensees that are FHSA providers; or

(b) a specified class of RSE licensees that are FHSA providers;

providers;

in order to protect the interests of holders of FHSAs provided by

the FHSA providers concerned.

(2) A Prudential Standard may impose different requirements to be

complied with in different situations or in respect of different

activities.

(3) A Prudential Standard is of no effect to the extent that it conflicts

with this Act, the regulations or the Financial Sector (Collection of

Data) Act 2001.

(4) A Prudential Standard may provide for APRA to exercise powers

and discretions under the Prudential Standard, including (but not

limited to) discretions to approve, impose, adjust or exclude

specific prudential requirements in relation to one or more

specified RSE licensees that are FHSA providers.

(5) APRA may, in writing, vary or revoke a Prudential Standard.

(6) A Prudential Standard referred to in paragraph (1)(c), or an

instrument varying or revoking such a Prudential Standard, has

effect:

(a) from the day on which the Prudential Standard, variation or

revocation is made; or

(b) if the Prudential Standard, variation or revocation specifies a

later day--from that later day.

Part 7 Prudential provisions

Division 3 Prudential Standards

Section 122

94 First Home Saver Accounts Bill 2008 No. , 2008

(7) The following instruments made under this section are not

legislative instruments:

(a) a Prudential Standard referred to in paragraph (1)(c);

(b) an instrument varying or revoking a Prudential Standard

referred to in paragraph (1)(c).

(8) Otherwise, an instrument made under this section is a legislative

instrument.

122 Notice of determination, variation or revocation of certain

Prudential Standards

(1) If APRA determines or varies a Prudential Standard referred to in

paragraph 121(1)(c) it must, as soon as practicable, give a copy of

the standard, or of the variation, to the FHSA provider, or to each

FHSA provider, to which the standard applies.

(2) If APRA revokes a Prudential Standard referred to in paragraph

121(1)(c) it must, as soon as practicable, give notice of the

revocation to the FHSA provider, or to each FHSA provider, to

which the standard applied.

(3) A failure to comply with subsection (1) or (2) does not affect the

validity of the action concerned.

Prudential provisions Part 7

Other prudential provisions Division 4

Section 123

First Home Saver Accounts Bill 2008 No. , 2008 95

Division 4--Other prudential provisions

123 Requirement for ADIs and life insurance companies to notify

APRA of intention to provide FHSAs

(1) A life insurance company or ADI commits an offence if:

(a) the life insurance company or ADI provides an FHSA or

offers to provide an FHSA; and

(b) the life insurance company or ADI had not previously

informed APRA in writing of its intention to provide FHSAs.

Penalty: 120 penalty units.

Validity of transaction not affected by contravention

(2) A contravention of subsection (1) does not affect the validity of a

transaction.

124 Obligations of FHSA providers in relation to certain life policies

(1) This section applies if an FHSA provider that is a life insurance

company provides an FHSA as a life policy that is an

investment-linked contract.

(2) In considering the specified class or group of assets (as mentioned

in paragraph 14(4)(a) of the Life Insurance Act 1995) covered

under the policy, the provider must have regard to the following

matters:

(a) the extent to which the composition of the class or group

exposes FHSA holders to risks from inadequate

diversification;

(b) the:

(i) risk of a reduction in the value of the units to which the

class or group relates; and

(ii) liquidity of the class or group;

in light of the purpose of the FHSA and the minimum term of

the FHSA if the requirements in subparagraph 32(1)(c)(i) or

(ii) are met;

Part 7 Prudential provisions

Division 4 Other prudential provisions

Section 125

96 First Home Saver Accounts Bill 2008 No. , 2008

(3) To avoid doubt, if the life policy allows an FHSA holder to choose

between different investment options specified by the FHSA

provider, the provider must, in considering the class or group of

assets covered under each of those options, also have regard to the

matters mentioned in paragraphs (2)(a) to (c).

125 Protection for small balances

(1) A provider of an FHSA commits an offence if:

(a) the provider allows an amount to be paid from the FHSA;

and

(b) the amount is an amount of fees owing to the FHSA provider

for providing the FHSA; and

to the FHSA; and

(d) the total earnings or other return credited to the FHSA for the

reporting period is less than the amount of those fees; and

(e) the balance of the FHSA is $1,000 or less.

Penalty: 100 penalty units.

Note:

Chapter 2 of the Criminal Code sets out the general principles of

criminal responsibility and Part IA of the Crimes Act 1914 contains

provisions dealing with penalties.

(2) Subsection (1) does not apply if:

(a) the FHSA holder consents in writing to the payment; or

(b) the FHSA is an interest in an FHSA trust and the earnings or

other return credited to the FHSA are calculated by reference

to the price of units in the trust; or

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (2) (see subsection 13.3(3) of the Criminal Code).

(3) Subsection (1) also does not apply if:

(a) the total amount of fees paid for the reporting period from all

FHSAs provided by the provider is greater than the total

amount of earnings or other return credited by the provider to

all those FHSAs for the reporting period; and

Prudential provisions Part 7

Other prudential provisions Division 4

Section 125

First Home Saver Accounts Bill 2008 No. , 2008 97

(b) the amount of fees paid from an FHSA for that period bears

the same proportion to the total amount of fees mentioned in

paragraph (a) that the:

(i) earnings or other return credited to the FHSA for that

period bears to the total amount of earnings or other

return mentioned in paragraph (a); or

(ii) balance of the FHSA at the end of that period bears to

the total of the balances of all FHSAs provided by the

provider at the end of that period.

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (3) (see subsection 13.3(3) of the Criminal Code).

Validity of transaction not affected by contravention

(4) A contravention of subsection (1) does not affect the validity of a

transaction.

Part 8 Miscellaneous

Section 126

98 First Home Saver Accounts Bill 2008 No. , 2008

Part 8--Miscellaneous

126 Annual reports

(1) The Commissioner must, as soon as practicable after 30 June in

each financial year, prepare and give to the Minister a report on the

working of this Act during that year, to the extent that that

Commissioner has the general administration of this Act.

(2) The Minister must cause a copy of the report to be tabled in each

House of the Parliament within 15 sitting days of that House after

the day on which the Minister receives the report.

Note:

See also section 34C of the Acts Interpretation Act 1901, which

contains extra rules about annual reports.

(3) For the purposes of section 34C of the Acts Interpretation Act

1901, a report that is required by subsection (1) to be furnished as

soon as practicable after 30 June in a year shall be taken to be a

periodic report relating to the working of this Act during the year

ending on that 30 June.

127 Civil immunity where defendant was complying with this Act

An FHSA provider is not liable in a civil action or civil proceeding

in relation to an act done in fulfilment of an obligation imposed by

this Act or the regulations.

128 Payment out of a fund in accordance with the Bankruptcy Act

1966

If a holder of an FHSA becomes a bankrupt, within the meaning of

subsection 5(1) of the Bankruptcy Act 1966, nothing in this Act or

the regulations prevents the FHSA provider from paying to the

trustee in bankruptcy an amount out of the FHSA that is property

divisible amongst the FHSA holder's creditors, within the meaning

of section 116 of the Bankruptcy Act 1966.

Miscellaneous Part 8

Section 129

First Home Saver Accounts Bill 2008 No. , 2008 99

129 Compensation for acquisition of property

(1) If the operation of this Act would result in an acquisition of

property from a person otherwise than on just terms, the

Commonwealth is liable to pay a reasonable amount of

compensation to the person.

(2) If the Commonwealth and the person do not agree on the amount

of the compensation, the person may institute proceedings in the

Federal Court of Australia for the recovery from the

Commonwealth of such reasonable amount of compensation as the

court determines.

(3) In this section:

acquisition of property has the same meaning as in paragraph

51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the

Constitution.

130 State insurance

This Act does not apply with respect to State insurance that does

not extend beyond the limits of the State concerned.

131 Regulations

(1) The Governor-General may make regulations prescribing matters:

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or

giving effect to this Act.

(2) Without limiting subsection (1), the regulations may:

(a) prescribe fees in respect of any matter under this Act; and

(b) prescribe penalties not exceeding 10 penalty units in respect

of offences against the regulations.

Commonwealth of Australia Bills

FIRST HOME SAVER ACCOUNTS BILL 2008