Treasury is consulting on the draft Treasury Laws Amendment (Personal Insolvency Amendments) Bill 2026, which contains proposed changes to Australia’s personal insolvency system, including increasing the threshold for involuntary bankruptcies and increasing the timeframe that a debtor has to respond to a bankruptcy notice.

The exposure draft would amend the Bankruptcy Act 1966 to:

* increase the involuntary bankruptcy threshold from $10,000 to $20,000 and index it over time;
* give debtors 28 days to respond to a bankruptcy notice, up from 21 days; and
* remove the proposal or acceptance of a debt agreement as an ‘act of bankruptcy’ under section 40(1). Under current arrangements, attempting to negotiate a debt agreement can itself trigger bankruptcy, even when someone is acting in good faith to settle their debts.

The amendments propose that the statutory bankruptcy minimum only increases when CPI movements result in an increase of over $500, rather than increasing on the basis of year-on-year changes.

The Government proposes to amend regulations to end permanent listings on the National Personal Insolvency Index. Under the proposed changes, bankrupts will be able to be removed from the Index after seven years. Bankruptcy usually lasts for 3 years and 1 day.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

ASIC has published Report 840 Mortgage brokers: Review of best interests duty and complaints handling practices (REP 840) which examined 13 credit licensees that make up eight large mortgage broker groups. It looked at how they ensure their credit representatives comply with the mortgage broker best interests duty and consumer complaints.

Its recommendations cover policies and tools for making loan recommendations, monitoring and supervision of credit representatives, and complaints handling and the best interests duty including:

* Licensees should ensure they can readily identify loan recommendations with limited or no recorded rationale and that are not for the cheapest loan compared.
* Licensees should ensure their systems capture accurate information relevant to loan recommendations, including lender discounts, promotional offers, cashbacks and lender timeframes for processing loan applications.
* Licensees should expect their representatives to provide additional evidence and justification when recommending a loan that will cost more than other available options.
* Licensees should ensure they have internal guidance and training materials, particularly for complex or challenging lending scenarios.
* Licensees should ensure adverse review findings are followed up and addressed with individual brokers and any consumer detriment is remediated, and consider whether findings reflect broader compliance issues.
* Licensees should improve how they identify complaints and ensure accurate IDR data is reported to ASIC.
* Unless a complaint is genuinely withdrawn by the complainant, licensees should respond to all complaints in a manner that is consistent with the requirements of RG 271.
* Licensees should regularly assess how their IDR processes are performing, including potential missed or unreported complaints arising from brokers interacting directly with consumers compliance with timeframe and notification requirements in RG 271.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

Treasury is consulting on amendments to the Banking Act to increase the withdrawal limit without production of probate, of the will, or letters of administration of the estate and to permit payments to include the payment of court filing fees.

The proposed amendments to section 69B of the Banking Act 1959 increase the withdrawal limit an ADI can make in payment of specified expenses of a deceased person’s (the depositor) estate without production of probate, of the will, or letters of administration of the estate to $30,000 from $15,000.

The draft Bill also amends the permissible payments that may be made under section 69B of the Act to expressly include payment of court filing fees for applying for probate of the deceased person’s will, or letters of administration of the deceased person’s estate.

Under the increased limit the payment of expenses specified in section 69B of the Act cannot exceed a total of $30,000.

Once the Bill is passed by Parliament the changes will commence the day after Royal Assent.

The increased limit will apply regardless of whether the deceased depositor died before, on or after commencement.

If before commencement of the amendments made by the Bill to section 69B of the Act, an ADI had applied any amounts in accordance with section 69B of the Act in respect of a deceased depositor, those amounts are to be counted, and taken into account, in determining the total amount that may be applied by the ADI in respect of that depositor after commencement.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

Treasury has issued a consultation paper Tackling fraud and financial abuse which includes proposals for new Australian Taxation Office (ATO) powers to help the ATO to issue garnishee notices to collect tax debts from jointly-held assets, with safeguards.

The Government intends to expand the existing ATO garnishee powers to jointly held assets where those arrangements are being used to frustrate recovery action.

Currently the ATO is generally unable to use garnishee notices to recover relevant funds from jointly held assets, including jointly held bank accounts.

The Commissioner would be permitted to presume that the taxpayer has an interest in the joint asset that is equal to the interest of other individual asset holders. For example, if there are three asset holders, then the taxpayer’s interest would be presumed to be a third of the total asset.

The ATO would be required to make reasonable attempts to notify other joint owners of the Commissioner’s intention to issue a notice, and provide the opportunity to lodge an objection to the assumed equal split of interests.

Alternatively the ATO could freeze a set amount within a joint account, but not remove any funds, prior to notifying any account holder and without applying to a court.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

ASIC has announced that it proposes to extend its “Internal Dispute Resolution data reporting instrument” which specifies the internal dispute resolution (IDR) information that financial firms must report to ASIC, with one change (for small banks).

ASIC Corporations (Internal Dispute Resolution Data Reporting) Instrument 2022/205 is scheduled to expire on 1 April 2027.

ASIC proposes to extend the instrument for a period of five years, subject to changing it to allow small banks (that is those on the lowest tier of APRA’s banking prudential framework) to report their IDR data annually rather than every six months.

The instrument requires IDR information to be reported to ASIC every six months in the manner and format specified in the IDR data reporting handbook. The law also requires certain other types of firms, including credit licensees, to report to ASIC as if they were financial services licensees.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

Treasury is consulting on changes to the Minister Rules under the Financial Accountability Regime (FAR) Act.

The Financial Accountability Regime (Minister) Amendment (Enhanced Notification Threshold) Rules 2026 will amend the Rules by increasing the enhanced notification threshold for authorised deposit taking institutions (ADIs) from exceeding $20 billion to exceeding $30 billion.

Banks with assets worth more than this have more reporting obligations under the FAR.

The amending Rules align the enhanced notification threshold with the definition of Significant Financial Institution in Prudential Standard CPS 001 Defined Terms to reduce notification obligations, and therefore administrative burden, for smaller ADIs, while preserving the regime’s core accountability objectives. Changes to the definition of a Significant Financial Institution took effect from 1 July 2026.

The amending Rules commence on 1 July 2027.

An accountable entity meets the threshold at a particular time during a financial year of the entity if the entity’s total assets value, as reported in the entity’s relevant final report, exceeds $30 billion.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

Treasury is consulting on the draft Banking Regulations 2026, which will replace the Banking Regulations 2016.

The draft regulations increase the covered bond issuance limit for authorised deposit-taking institutions (ADIs) to 12 per cent of an ADI’s assets. The current limit is 8 per cent.

The draft regulations also prescribe that the provision of a purchased payment facility in certain circumstances is a prescribed financial activity for the purposes of the definition of ‘banking business’ in subsection 5(1) of the Banking Act.

Regulation 26 which prescribes the amount of $500 for the annual statement of unclaimed moneys under subsection 69(3) of the Banking Act, is substantively the same as the corresponding provision in the 2016 Regulations.

There is no change to the Financial Claims Scheme limit on payments of $250,000 or the prescribed protected accounts for the purposes of meeting an entitlement for the payment of an account-holder with an ADI.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

The Office of the Australian Information Commissioner has published its guidance on the new transparency obligations for the use of AI and automated decision-making.

Separately, the Privacy Commissioner has explained how current and proposed privacy laws could strengthen protections and increase obligations on companies collecting personal information through smart glasses or other wearables.

Automated decision-making
From 10 December 2026, Australian Privacy Principle 1.3 requires regulated entities to disclose in their privacy policies where a “computer program” makes, or is substantially and directly related to making, a decision that could reasonably be expected to significantly affect an individual’s rights or interests.

The OAIC has published a transparency obligation flow chart (PDF) to help the decision process.

APP 1.7 requires APP entities to include the information outlined in APP 1.8 in their APP Privacy Policy if:

* the entity has arranged for a computer program to make, or do a thing that is substantially and directly related to making a decision (APP 1.7(a)); and
* the decision could reasonably be expected to significantly affect the rights or interests of an individual (APP 1.7(b)); and
* personal information about the individual is used in the operation of the computer program to make the decision or do the thing that is substantially and directly related to making the decision (APP 1.7(c)).

APP 1.8 outlines the information which must be included in an entity’s APP privacy policy if the conditions in APP 1.7 are met.

This includes:
* the kinds of personal information used in the operation of such computer programs; and
* the kinds of such decisions made solely by the operation of such computer programs; and
* the kinds of such decisions for which a thing, that is substantially and directly related to making the decision, is done by the operation of such computer programs.

Privacy and surveillance wearables including smart glasses
The Privacy Commissioner has responded to public discussion about ambient recording devices that enable always-on, concealed and even covert surveillance of images, sounds and other personal information, and community concern about smart glasses at sensitive public spaces such as swimming pools, playgrounds and gyms.

While the Privacy Act does not apply to individuals who collect others’ personal information, only to companies and Commonwealth agencies, the Privacy Commissioner has expressed the view that retailers that sell smart glasses – for example on an ecommerce website – or companies that manufacture them, may not have any Privacy Act obligations if they do not collect any personal information with respect to those devices. Instead, the entity providing the software used in the device is likely to be the entity that collects and holds the information for the purpose of privacy law.

The Commissioner notes that forthcoming changes to the Privacy Act broaden the definition of “personal information” so that it is likely that it will include images of an individual or recordings of their voice, depending on the context and capabilities of the regulated entity as to whether and in which circumstances the personal information they are collecting is personal information.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

ASIC has published its supervisory priorities for 2026-27 for the banking, superannuation, general insurance, life insurance and financial markets sectors.

Banking sector: ASIC will review the use of AI in customer-facing activities, decision-making and lending processes (including governance and risk assessment of new and proposed use cases of AI for consumers and small businesses) and will review lender conduct practices, such as incentives, referrer arrangements, and broker oversight. There will be an ongoing focus on offset accounts and controls to keep promises to customers and prevent systemic failures, and to improve outcomes for those in financial difficulty.

Superannuation sector: ASIC will continue its multi-year review of superannuation member services and begin new reviews on trustee oversight of advice fee deductions and retirement as well as death benefit claims handling. ASIC is currently testing how well superannuation trustees use member complaints data to identify and address systemic issues and to improve service delivery.

General insurance sector: ASIC will review the practices of for-profit claims management firms (including those commonly referred to as ‘disaster chasers’) and the potential implications of some firms’ practices for consumers. It will continue to focus on motor vehicle insurance premium disclosure and cash settlements in home building insurance.

Life insurance sector: ASIC will review life insurance practices related to funeral insurance and continue its review into service issues in life insurance.

Markets sector: ASIC will continue to use market intelligence and data, and targeted surveillance to examine distribution and fee and incentive structures.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

In Australian Securities and Investments Commission v Hollard Insurance Partners Limited [2026] FCA 1487, the Federal Court of Australia ordered Hollard to pay a $2 million penalty after Hollard admitted that its serious claim-handling failures resulted in Hollard breaching its duty of utmost good faith because of significant delays, poor communication and other failings in handling a home insurance claim by a family in regional Victoria, following a storm in October 2021 that damaged their home. The home was ultimately deemed a total loss.

Despite initially accepting the claim for the home’s damaged roof, Hollard delayed for 15 months before settling the claim.

Hollard admitted that it failed to comply with the Insurance Contracts Act 1984 (Cth) by a combination of:

(a) failing to promptly engage a structural engineer for expert opinion in assessing the damage caused by storm to the roof of the Insureds’ home;
(b) failing to assess correctly, and delaying in rectifying its mistake, as to the extent of the boundary fence which needed to be repaired;
(c) delaying in arranging further emergency works to the Insureds’ home, to protect the building against further loss or damage, after being notified that the original make-safe works had failed to stop water ingress;
(d) delaying in providing temporary accommodation to the Insureds;
(e) failing to sufficiently consider two written expert reports and an inspection report prepared by Hollard’s appointed claim manager that were relevant to the decision to offer a cash settlement for the damage to the external roof caused by the storm;
(f) failing to communicate in a sufficiently clear manner in writing with the Insureds about the reasoning and basis for the decision to offer a cash settlement for the damage to the external roof caused by the storm, and the value of the cash settlement that was offered in relation to that damage; and
(g) delaying in providing repairs to address growing mould.

In determining the penalty to be imposed, Justice Button proceeded on the basis that the combined conduct constituted a single contravention.

He accepted Hollard’s submissions that the changes it has made significantly reduce the possibility of the multiple failings that occurred in the handling of the Insureds’ claim recurring.

Justice Button observed:

“The saga experienced by the Insureds was extended and must have been stressful and traumatic. They were given the runaround in more ways than one, and lived in their ever-deteriorating home, as the saga wore on. The Court is not imposing a penalty to reflect everything the Insureds experienced; what the Insureds experienced in its totality cannot be substituted for the contravening conduct for which the civil penalty is to be imposed. Nor is the Court imposing a penalty reflecting every aspect of Hollard’s conduct at which one might look askance….
A business that identifies issues and takes steps to address them without the pressure of regulatory enforcement action prompting the change is, in my view, a business less in need of specific deterrence than a business driven to make changes by the pressure of litigation….
While significant improvements have been made in claims handling, there is always the risk of back-sliding, and the penalty imposed will serve to deter Hollard from tolerating any such back-sliding as would allow similar failings in claims handling to occur in the future.”

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.