Document ID: chunk:federal_register_of_legislation:F2020L01668:body:0:p9
Version: federal_register_of_legislation:F2020L01668
Segment Type: other
Provision Reference: 
Character Range: 22104–24886

of the obligations of an administrator to respond in a timely manner to reasonable requests from creditors about the progress of individual agreements; and to respond in a timely manner to reasonable requests from debtors for information.

3.32 Depending on an administrator's business operations they may also need to outline what systems they have in place that will assist them in this regard.

(c) Ensure creditors and the Official Receiver are informed about default

3.33 An administrator has a duty to inform creditors when the debtor is in arrears for a period of 3 months. For debt agreement proposals lodged after 27 June 2019, an administrator has a duty to report arrears only where the arrears exceed $300, or 20% of the total of all due payments (whichever is higher). Where the total due payments is $300 or less, an administrator has a duty to report the arrears only if no payment was made in that period to reduce any of the due payments. The administrator must also advise the Official Receiver when the debtor has not made a payment in terms of the debt agreement for a continuous period of 6 months and/or when the debt agreement is not completed within 6 months of its due date for completion. Refer to Inspector-General Practice Statement 17 for further information about 3 month default reporting.

3.34 The payment monitoring and reporting system that will allow an administrator to quickly comply with these duties will be examined.

(d) Taking fees and expenses

3.35 An administrator who is entitled to be remunerated is required to express that remuneration as a percentage of the total amount payable by the debtor in respect of provable debts. The remuneration must be taken proportionately over the duration of the agreement. This forms part of the administrator's duty to administer the debtor's property in accordance with the terms of the agreement.

3.36 In addition, an administrator has a duty not to be reimbursed for expenses incurred in administering the agreement unless those expenses are of a kind specified in the relevant debt agreement proposal.

3.37 An administrator's systems for recovering remuneration will need to be capable of ensuring that only the correct percentage is taken when due, and ensuring that only expenses documented in a proposal are recovered. Systems need to be in place to ensure that general overheads are only recovered through remuneration charged and not treated separately as expenses. Levying of overhead costs to separate agreements in addition to remuneration is not permitted. Administrators will therefore need to understand what constitutes genuine "out of pocket" expenses that, if detailed in the proposal and creditors agree, are able to be recovered directly from funds held in trust