Reform

Below we deal briefly with just some of the problems confronting Australians who have unclaimed entitlements.

We also suggest how the system could be reformed and have recently made submissions to government covering the points outlined below.

The Problems

  • Eight state/territory unclaimed money acts, all of them with different requirements.
  • Six databases all with different search facilities, each with its own quirks and thus with potential for searches to fail notwithstanding the existence of an entitlement or entitlements.
  • Two jurisdictions not providing searchable databases so there is no means for the public to search for and find their unclaimed funds.
  • One jurisdiction not providing amounts, so prospective claimants have to go through a convoluted process to determine whether it is worth lodging a claim.
  • One of the major jurisdictions requiring addresses to be submitted but only allowing searches on names, so it is doubly difficult for searches to be conducted when people have moved a lot.
  • One of the jurisdictions charging a fee of $76 to make a claim.
  • Differing interpretations of privacy such that some jurisdictions provide addresses or part addresses and others do not.
  • Some jurisdictions provide unclaimed money data to third parties, some don’t.
  • Some jurisdictions boast of a desire to marry the public with their entitlements but perhaps unwittingly appear to put impediments in the way of achieving it.
  • Large sums of unclaimed entitlements are held in particular by listed companies and their share registries. The monies either never find their way into publicly searchable databases or are held without exposure for periods of at least 12 years, well beyond time limits imposed by the various Acts.
  • Often unclaimed funds reflected in the database of a jurisdiction are not in fact held by the jurisdiction and the claimant has to follow a tortuous route to determine who it is to be claimed from.
  • It appears to us from what we see of the results, that policing of the various unclaimed money acts and enforcement is not a priority. (For example, two jurisdictions have refused to take any action against a listed public company that has misappropriated $2.5 million of unclaimed shareholder entitlements.)
  • The Australian Taxation Office has knowledge that many shareholders are paying tax on dividends that they have never received and has declined to alert taxpayers to this injustice.
  • More than 90% of unclaimed funds in Australia, being the lost and unclaimed superannuation component, are not easily accessible to the public.
  • This fragmented and inefficient system has spawned an army of money finders who can charge as much as 50% of the proceeds to disclose an entitlement. Claimants are required to provide the same supporting documents as they would if claiming directly from the jurisdiction holding the funds.

The Solutions

  • One unclaimed monies act, one authority, one administration and one publicly searchable database for Australia with facility to search on both name and address.

    (This is achievable by all jurisdictions referring their powers to federal government as they did to facilitate the development of the Corporations legislation which became one law for all Australian companies. If necessary, adjustments could be made to compensate the states for revenue foregone.)
  • Search results to show name, address, amount, lodging authority, date of receipt and type.
  • Unclaimed monies of all descriptions nation-wide to be reported, lodged with the authority and included in the searchable database within two years of becoming due or untouched. Special provision may need to be made for inactive bank accounts but there should be no other exceptions.
  • The Corporations Act amended to ensure conformity. All unclaimed dividends and entitlements arising from takeovers, mergers, schemes of arrangement (and whether attributable to dissident shareholders or not) to be reported, lodged with the authority and included in the searchable database within two years of the underlying event.
  • The Act should reinforce the principle that no organisation be allowed to characterise unclaimed amounts of any type as anything else other than unclaimed entitlements.
  • All lost and unclaimed superannuation that is not able to be reflected by taxpayer TFN should be included.
  • A monthly gazette to record the name of the lodging authority, date of receipt and type of unclaimed funds lodged in the previous month.
  • The new authority vested with the powers and resources to ensure compliance and take action in the public interest in the event of corporate or other misconduct.