Practice Matters

Definitions for “dependent” and “reside”

AFSA has performed two income reviews where the trustee has incorrectly applied the Actual Income Threshold Amount (AITA), where a dependent resides with them only part of the time. Both cases were a genuine misapplication that has been rectified with guidance and staff training.

There are clear guidelines about the ways in which the definition of “dependent” and “resides” apply. For further clarity, please read these detailed articles.

Controlling trustee use of notice of demand

The power to issue a notice of demand under section 129(4B) of the Bankruptcy Act 1966 applies to a trustee of a personal insolvency agreement (PIA).

AFSA is aware that some controlling trustees have issued these notices before the PIA is executed. The enabling provision of subsection 231(3) is only effective after the PIA is executed.

Trustees should ensure they are using their powers appropriately. Section 211 outlines the provisions applicable for the period that the debtor’s property is subject to control, while Section 231 outlines provisions applicable for the PIA period only.