30 October 2008
REFORM OF REMUNERATION ARRANGEMENTS FOR BANKRUPTCY TRUSTEES
Attorney-General Robert McClelland today announced that the Rudd Government will reform the mechanism for trustee remuneration in bankruptcy matters.
The changes include:
- increasing trustees’ statutory minimum remuneration entitlement to $5,000;
- removing the current ability of trustees to recover the statutory minimum amount directly from the bankrupt where there are insufficient assets in the estate;
- removing the default remuneration scale that trustees may currently access where they are unable to obtain creditor approval for remuneration in excess of the statutory minimum, and replacing it with a right for the trustee to apply to the Inspector-General in Bankruptcy to determine whether the proposed remuneration arrangements are reasonable; and
- replacing the current system for taxation of trustees’ remuneration claims with a review process to be conducted by the Inspector-General, enabling disputes relating to remuneration to be more focussed and resolved with less cost.
“These amendments will bring greater transparency to the fixing and claiming of trustee remuneration,” Mr McClelland said.
“They are designed to increase confidence in the system, whilst maintaining the central tenet of trustee remuneration, which is that the creditors should retain control of remuneration wherever possible.”
The necessary amendments to the Bankruptcy Act will be introduced in early 2009. They will provide the broad framework for the process of fixing and claiming trustee remuneration.
The changes are based on a Proposals Paper released by Mr McClelland in May this year, to which a large number of responses were received.
Insolvency and Trustee Service Australia (ITSA) will be conducting further consultation on the detail of these reforms in coming months.
Media Contact: Adam Sims 0419 480 224