PIR Newsletter – June 2020

COVID-19 – Effective communication is now more important than ever

In April, AFSA released guidance for debt agreement administrators and practitioners in relation to COVID-19 and its effect on our stakeholders.

Staying vigilant during COVID-19

It is important to keep in mind that everyone is vulnerable to fraud, regardless of the circumstances. Certain events, such as those we are currently facing as a consequence of COVID-19, heighten the risk of fraud.

Reminder to practitioners about Annual Administration Returns

The Annual Administration Returns (AAR) lodgement period is fast approaching.

Effect of COVID-19 on prosecutions

Understandably the COVID-19 pandemic has impacted on the running of courts as they have taken steps to comply with local and national health advice and implement social distancing measures.

Unlicensed financial advice to debtors by Debt agreement administrators– early access to superannuation

Debt agreement administrators need to remember that financial advice must only be provided by qualified and licensed financial advisers or financial counsellors.

Lessons learned: Techniques for reducing remuneration approval applications

Since 2010, the Inspector-General has had the power to approve a trustee’s remuneration. This power is generally exercised where a trustee has sought creditor approval, but has been unsuccessful.

ATO Update

The ATO is committed to supporting the Australian community to get through this difficult time and to access the help on offer. We know that many businesses and communities are being heavily affected by the challenging economic conditions created by the outbreak of COVID-19.

Trends with untrustworthy advice

AFSA, through its Regulation and Enforcement (R&E) staff, have been recently engaging in work investigating instances of untrustworthy advice being provided to bankrupts and debtors and have seen some trends worthy of being on the lookout for.

Case note: The annulment of a bankruptcy when a bankrupt’s tax affairs are not up to date

The Federal Circuit Court handed down its decision on 29 April 2020 in Yeo & Rambaldi as Trustees of the Bankrupt Estate of Sandles v Sandles [2020] FCCA 988 (29 April 2020).

Guidance for Registered Trustees – Rates for Time Based Charging

For AFSA’s 2019-20 Insolvency Compliance Program, a sample of administrations were reviewed for possible remuneration issues and delays in administrations.