Commonwealth Numbered Regulations

1996 No. 263 BANKRUPTCY REGULATIONS - REG 6.06

6.06. (1) This regulation is made under subsection 116 (6) of the Act and,
accordingly, it sets out the method for apportioning items of property for the
purposes of paragraph 116 (5) (b) of the Act. The method is to apply in
respect of property of a bankrupt (in this
regulation called "the bankrupt's property"), where:

   (a)  that property is covered by paragraph 116 (2) (d) of the Act; and

   (b)  the total value of the bankrupt's property exceeds the amount of the
        bankrupt's pension RBL. One item of property - life assurance or
        endowment assurance

(2) If the bankrupt's property:

   (a)  consists of only 1 item; and

   (b)  is in the form of:

        (i)    a policy of life assurance or endowment assurance; or

        (ii)   proceeds of a policy of that kind, being proceeds that are
               received by the bankrupt on or after the date of the
               bankruptcy; the method of determining how the property is to be
               apportioned is to extend subsection 116 (1) of the Act to the
               proportion of that property that exceeds the amount of the
               bankrupt's pension RBL. One item of property - payment from
               regulated superannuation fund or approved deposit fund

(3) If the bankrupt's property:

   (a)  consists of only 1 item; and

   (b)  is in the form of a payment from a regulated superannuation fund or an
        approved deposit fund, being a payment that:

        (i)    is received by the bankrupt on or after the date of the
               bankruptcy; and

        (ii)   is not a pension, within the meaning of the Superannuation 
               Industry (Supervision) Act 1993; the method of determining how
               the property is to be apportioned is to extend subsection 116
               (1) of the Act to the proportion of that property that exceeds
               the amount of the bankrupt's pension RBL. One item of property
               - interest in regulated superannuation fund or approved deposit
               fund

(4) If the bankrupt's property:

   (a)  consists of only 1 item; and

   (b)  is in the form of an interest in a regulated superannuation fund or an
        approved deposit fund; the method of determining how the property is
        to be apportioned is to extend subsection 116 (1) of the Act to the
        components of the property in the following order:

   (c)  the unrestricted non-preserved component of the property;

   (d)  the restricted non-preserved component of the property;

   (e)  the preserved component of the property; until the value of the
        bankrupt's residuary interest in the property equals the value of the
        bankrupt's pension RBL. EXAMPLE: Assume that the bankrupt has one item
        of property, namely an interest of $1,200,000 in a regulated
        superannuation fund. This property has the following components:

   (a)  an unrestricted non-preserved component of $100,000;

   (b)  a restricted non-preserved component of $200,000;

   (c)  a preserved component of $900,000. The amount ($400,000) by which the
        property exceeds the pension RBL ($800,000) is available towards
        satisfying the creditors in the bankruptcy. The amount of $400,000 is
        met by applying the whole of the non- preserved components ($100,000 +
        $200,000 = $300,000) and $100,000 from the preserved component. [NOTE:
        The amount of the pension RBL (in the above example, $800,000) is
        always protected and remains in the fund.] More than 1 item of
        property

(5) If the bankrupt's property consists of more than 1 item, the method of
determining how the property is to be apportioned is to extend subsection 116
(1) of the Act to the items in the following order:

   (a)  proceeds of a policy of life assurance or endowment assurance received
        by the bankrupt on or after the date of the bankruptcy;

   (b)  policies of life assurance or endowment assurance;

   (c)  a payment from a regulated superannuation fund or an approved deposit
        fund, being a payment that:

        (i)    is received by the bankrupt on or after the date of the
               bankruptcy; and

        (ii)   is not a pension, within the meaning of the Superannuation
               Industry (Supervision) Act 1993;

   (d)  the unrestricted non-preserved component of any interest in an
        approved deposit fund;

   (e)  the unrestricted non-preserved component of any interest in an
        accumulation fund;

   (f)  the restricted non-preserved component of any interest in an
        accumulation fund;

   (g)  the preserved component of any interest in an approved deposit fund;

   (h)  the preserved component of any interest in an accumulation fund;

   (i)  the unrestricted non-preserved component of any interest in a defined
        benefit fund;

   (j)  the restricted non-preserved component of any interest in a defined
        benefit fund;

   (k)  the preserved component of any interest in a defined benefit fund;
        until the value of the bankrupt's residuary interest in the property
        equals the value of the bankrupt's pension RBL.