Schedule 1 Amendments
(regulation 3)
[1] Subregulation 1.0.02 (1), after definition of capital
guaranteed
capital guaranteed FHSA product means an
FHSA product:
(a) that is an FHSA deposit account or an FHSA
life policy; and
(b) for which the balance may not be reduced other
than by the debiting of fees.
[2] Subregulation 1.0.02 (1), after definition of exempt
public sector superannuation scheme (EPSSS)
insert
FHSA deposit account means an FHSA product of
a kind mentioned in subparagraph (c) (i) of the meaning of FHSA in section
8 of the First Home Saver Accounts Act 2008.
FHSA life policy means an FHSA product of a
kind mentioned in subparagraph (c) (ii) of the meaning of FHSA in section
8 of the First Home Saver Accounts Act 2008.
[3] After regulation 7.6.01
insert
7.6.01AA Persons taken to hold
financial services licences covering First Home Saver Accounts
(1) For paragraph 926B (1) (c) of the Act,
Part 7.6 of the Act applies as if the following subsection were inserted after
subsection 911A (6):
“(7) The regulations may provide that a
financial services licence is taken to cover the provision of financial
services specified in the regulations.”
(2) For subsection 911A (7) of the Act, a person’s
financial services licence is taken to cover the provision of a financial
service in relation to a beneficial interest in an FHSA trust (within the
meaning given in section 18 of the First Home Saver Accounts Act 2008)
if the licence would cover the service if it were provided in relation to a
superannuation product.
[4] Paragraph 7.6.04A (e)
substitute
(e) a cash management trust interest;
(f) an FHSA product.
[5] Paragraph 7.7.02 (1) (c)
substitute
(c) a cash management trust interest;
(d) a capital
guaranteed FHSA product.
[6] After subregulation 7.7.08A (1)
insert
(1A) This regulation does not apply if the Product
Disclosure Statement is for an FHSA product.
[7] Paragraph 7.7.10 (i)
substitute
(i) a general
insurance product prescribed by regulations made for the purposes of
subparagraph 761G (5) (b) (viii) (see regulation 7.1.17A);
(j) a capital
guaranteed FHSA product.
[8] Paragraph 7.9.09 (1) (c)
substitute
(c) annuity products; and
(d) FHSA products.
[9] Part 7.9, Division 4, after Subdivision 4.1
insert
Subdivision 4.2 Content
of Product Disclosure Statements for First Home Saver Accounts
7.9.10 Application of Subdivision
(1) This Subdivision applies to:
(a) a person required to give a Product
Disclosure Statement for an FHSA product; and
(b) a Product Disclosure Statement for an FHSA
product.
(2) However, if a Product Disclosure Statement consists
of 2 or more documents, this Subdivision (other than regulation 7.9.10C) applies
only to the document describing the default investment option for the product.
7.9.10A Definitions
(1) In this Subdivision and in Schedule 10B:
default investment option, for a multiple
investment option FHSA product, is the investment option which is applied to
the product if the person who acquires the product does not choose an
investment option.
multiple investment option FHSA product means
an FHSA product that has 2 or more investment options.
(2) If a term used in this Subdivision or in Schedule 10B
is used in the First Home Saver Accounts Act 2008, the term has the same
meaning in this Subdivision or in Schedule 10B as it does in that Act.
Note The following terms used in this Subdivision
or in Schedule 10B are defined in the First Home Saver Accounts Act 2008:
· contribution
· FHSA
eligibility requirements
· FHSA holder
· FHSA provider
· FHSA trust
· Government
FHSA contribution
· personal FHSA
contribution
· qualifying
interest.
(3) In this Subdivision and in Schedule 10B, a provision
of the Act modified in accordance with regulation 7.9.10B is referred to
as modified.
Example
Subparagraph 1013C (1) (a) (i) of the Act
as modified by item 5.4 of Part 5 of Schedule 10A is referred to in this Subdivision
as ‘modified subparagraph 1013C (1) (a) (i)’.
7.9.10B Modification of Act
For paragraph 1020G (1) (c) of the Act,
Part 7.9 of the Act is modified in its application to FHSA products as set out
in Part 5 of Schedule 10A.
7.9.10C Product Disclosure Statement
consisting of 2 or more documents
(1) For modified subsection 1013L (7) of the Act, a
Product Disclosure Statement for an FHSA product must not consist of 2 or more
documents.
(2) However, the Product Disclosure Statement for a
multiple investment option FHSA product may consist of 2 or more documents if:
(a) the document describing the default
investment option complies with this Subdivision; and
(b) the other documents comply with the
provisions of:
(i) the Act; and
(ii) regulations; and
(iii) any instruments made under the
Act and the regulations;
that would apply to those documents but for
the operation of this Subdivision.
7.9.10D Manner of giving Product
Disclosure Statement
(1) For paragraph 1015C (5) (a) of the Act, if
a person or the person’s agent is given a Product Disclosure Statement
personally, the Statement must be the first or only document given to the
person or agent at that time.
(2) For paragraph 1015C (5) (a) of the Act, if
a Product Disclosure Statement is sent to the address or fax number of a person
or the person’s agent, the Statement must be the first or only document sent to
the person or agent at that time, other than a covering letter or fax coversheet
of no more than 1 page.
7.9.10E Form and content of Product
Disclosure Statement
(1) For modified subparagraphs 1013C (1) (a) (i)
and (ii) of the Act, a Product Disclosure Statement must:
(a) include the information and statements
mentioned in Schedule 10B; and
(b) be in the form mentioned in Schedule 10B.
(2) However, if strict compliance with subregulation (1)
would result in the Statement being materially misleading, the Statement must
contain explanations or qualifications so as to make the Statement no longer
misleading.
(3) Subregulation (2) does not require explanation
or qualification of a statement the text of which is specified in subitem 4 (1),
5 (1) or 6 (1) of Schedule 10B.
(4) Also, ASIC may determine, in writing, that a
provision of this Subdivision or of Schedule 10B:
(a) does not apply to a Product Disclosure
Statement for an FHSA product; or
(b) applies to a Product Disclosure Statement for
an FHSA product as if specified provisions were omitted or modified as set out
in the determination.
[10] Paragraph 7.9.62 (3) (c)
after
basic deposit product
insert
or an FHSA product
[11] Paragraph 7.9.62 (3) (d)
after
basic deposit product
insert
or an FHSA product
[12] After regulation 7.9.74A
insert
7.9.74B Periodic statements — additional
details for First Home Saver Accounts
(1) For paragraph 1017D (5) (g) of the Act, a
periodic statement for an FHSA product must include the following words:
The
First Home Saver Account is an Australian Government initiative to help
Australians save for their first home.
(2) For paragraph 1017D (5) (g) of the Act, a
periodic statement for an FHSA product must state the number of financial years,
after the end of the reporting period for the statement, during which the
holder of the product must make personal FHSA contributions as required by the First
Home Saver Accounts Act 2008 for a payment to be made out of the product
under section 32 of that Act.
(3) However, if the number of years is 0, the periodic
statement must state that the holder may, subject to the First Home Saver
Accounts Act 2008, apply for payment from the product to acquire a
qualifying interest in a dwelling.
(4) In this regulation:
personal FHSA contribution has the meaning
given in section 11 of the First Home Saver Accounts Act 2008.
qualifying interest, in a dwelling, has the
meaning given by section 12 of the First Home Saver Accounts Act 2008.
[13] Schedule 10A, after Part 3
insert
Part 5 Modifications
relating to First Home Saver Accounts
5.1 Subsection 946AA (4)
omit
The
insert
Subject to subsection (5A), the
5.2 Subsection 946AA (5)
omit
The
insert
Subject to subsection (5A), the
5.3 After subsection 946AA (5)
insert
(5A) Subsections (4) and (5) do not apply
if the small investment advice is about a capital guaranteed FHSA product.
5.4 Paragraph 1013C (1) (a)
substitute
(a) must:
(i) include the statements and
information required by regulations made for this subparagraph; and
(ii) be in the form required by
regulations made for this subparagraph; and
5.5 Subsection 1013C (1), note
omit
5.6 Subsection 1013C (2)
omit
sections 1013D and 1013E
insert
subparagraph (1) (a) (i)
5.7 After subsection 1013C (7)
insert
(8) Regulations made for subparagraph
(1) (a) (i) or (ii) may authorise ASIC to determine or amend the
statements and information included in, and the form of, a Product Disclosure
Statement.
5.8 Sections 1013D and 1013E
omit
5.9 Subsection 1013L (7)
substitute
(7) The regulations may:
(a) prescribe circumstances in which a Product
Disclosure Statement must not be made up of 2 or more documents; and
(b) impose additional requirements to be complied
with if a Product Disclosure Statement is made up of 2 or more documents.
5.10 Section 1013M, at the foot
insert
Note A Product Disclosure Statement for an
FHSA product cannot be combined with a Financial Services Guide in a single
document — see subsection 942DA (3) and subregulation 7.7.08A (1A)
of the Corporations Regulations 2001.
5.11 After section 1013M
insert
1013N Combining
Product Disclosure Statement and another document
A Product Disclosure Statement
must not be attached to, or combined with, another document.
Note 1 A Product Disclosure
Statement itself may be given as 2 or more documents in certain circumstances —
see section 1013L and regulation 7.9.10C of the Corporations Regulations
2001.
Note 2 A Product Disclosure
Statement may be given to a person along with other documents, but must
generally be the first document given — see regulation 7.9.10D of the Corporations
Regulations 2001.
5.12 Part 7.9, Division 2, Subdivision D
omit
[14] After Schedule 10AA
insert
Schedule 10B Form
and content of Product Disclosure Statement for FHSA product
(regulation 7.9.10E)
Part 1 Form
and content of Product Disclosure Statement — general
1 Length and font size
for Product Disclosure Statement
(1) The length of a Product Disclosure Statement
(including any title page, contents, glossary, index and other information not
required by these Regulations) for an FHSA product must not exceed:
(a) if it is printed on A4 pages — 4 pages;
or
(b) if it is printed on A5 pages — 8 pages;
or
(c) if it is printed on DL pages — 12
pages; or
(d) otherwise — if the Statement was
formatted to be printed on A4 pages, 4 A4 pages.
(2) The minimum font size for text in the Statement is:
(a) for the name, address, ABN, ACN and AFSL of
the person giving the Statement — 8 points; and
(b) for all other text — 9 points.
Note 1 The Product Disclosure Statement
must be worded and presented in a clear, concise and effective manner —
see subsection 1013C (3) of the Act.
Note 2 A person required to give a
Product Disclosure Statement to a vision‑impaired person must comply with
its obligations under the Disability Discrimination Act 1992.
(3) However, if the person who must be given the
Statement requests or is entitled to expect that the Statement be given to him
or her in a particular format, the Statement given to the person is taken to
comply with subitem (1) if it would comply with that subitem in the format
that the provider would have given but for the request or expectation.
Example
A vision‑impaired person may request the Statement
with a larger font size, and the Statement, when printed with that font size,
exceeds 4 A4 pages in length.
2 Sections in a Product
Disclosure Statement
(1) The Product Disclosure Statement must contain the
following sections, which must be numbered and titled as follows:
1. Who can have a First Home Saver Account
2. How the First Home Saver Account works
3. How the Government helps you save
4. [no prescribed title]
5. What happens if your situation changes
6. Using your savings for your first home
7. The fees and costs [or “The fees” if there are no costs]
8. How to open an account
9. [no prescribed title]
(2) The Product Disclosure Statement may contain other
sections (for example, a table of contents, glossary, index, or information
about the product issuer).
3 Product Disclosure
Statement must be self‑contained
The sections of the Product Disclosure Statement
mentioned in subitem 2 (1) must contain, in summary form, all information
that a person would reasonably require for the purpose of making a decision
whether to acquire the FHSA product.
4 Contents
of section 1 (Who can have a First Home Saver Account)
(1) Section 1 of the Product
Disclosure Statement must contain the following text:
You
should consider opening a First Home Saver Account if you:
· only want to use your savings to buy or build your first home in
Australia to live in (‘buy your first home’); and
· are able to save at least $1,000 a year ($20 a week) in 4 separate
financial years – they do not need to be in a row.
A
financial year is from July 1 to June 30.
To
open an account, you must:
· be aged 18 or over and under 65
· have a tax file number
· have never owned a home in Australia that you have lived in; and
· have never opened a First Home Saver Account before.
You
can open another First Home Saver Account if you are transferring your savings
from one First Home Saver Account to another — see section 8.
If
you are saving with others, each person must open their own individual First
Home Saver Account. Each of you can then receive the benefits of having a First
Home Saver Account.
You
cannot open a joint account with someone else.
If
you are unsure about your eligibility go to www.ato.gov.au
(2) If section 1 of the Statement
contains other text, the other text must come after, and be no more prominent
than, the text mentioned in subitem (1).
5 Contents
of section 2 (How the First Home Saver Account works)
(1) Section 2 of the Product
Disclosure Statement must contain the following text:
How you can use the savings in a First Home Saver
Account
You
can only use your savings in three ways:
1. to buy your first home
2. as money you can add into your super
3. as money you can withdraw as a lump sum if you
are aged 60 or over.
How
to save with a First Home Saver Account
· You put money into your account the same way as you would make
deposits into a normal bank account. You can do this at any time, and for as
long as you need to save.
· You cannot salary sacrifice into your account.
· You do not need to put money in every year – but your account will
only get Government contributions when you do.
· Once the total amount in your account reaches [account balance
cap] – including Government contributions and income from investment
earnings – you cannot put any more money into your account.
· You can keep your account open until you buy your first home or
turn 65.
When
you turn 65 you must close your account and withdraw all of your savings, or
move it into super.
(2) If section 2 of the Statement
contains other text, the other text must come after, and be no more prominent
than, the text mentioned in subitem (1).
6 Contents
of section 3 (How the Government helps you save)
(1) Section 3 of the Product
Disclosure Statement must contain the following text:
The
Government boosts your savings with contributions and a low rate of tax on the
income your investment earns.
When
you put money into your account the Government puts money in too.
· When you put a dollar into your account, the Government will
contribute 17 cents.
· Any money you put in up to a total of [Government FHSA contribution
threshold] in a financial year will get this Government contribution – anything
over this amount will not.
For
example, if you put [Government FHSA contribution threshold] into your
account in one financial year, the Government will contribute [Government
FHSA contribution for Government FHSA contribution threshold] to your
savings.
If
you are saving with other people that have their own First Home Saver Accounts,
each person will receive Government contributions on the money they put into
their account.
· Government contributions are paid directly into your First Home
Saver Account after you have lodged your tax return and [name of FHSA
provider] has told the Tax Office how much you have put in.
You
are not taxed
· on the money you put into your account; or
· on the Government contributions; or
· when you withdraw your savings for your first home.
There
is a low rate of tax on the interest your savings earn
· Any income that your investment earns will be taxed at a low
rate of 15%. This tax will be deducted from your investment earnings and paid
to the Tax Office.
(2) If section 3 of the Statement contains other text,
the other text must come after, and be no more prominent than, the text
mentioned in subitem (1).
7 Contents
of section 4
Section heading
(1) The heading to section 4 of
the Statement must be relevant to its contents.
Financial details of product
(2) Section 4 of the Product
Disclosure Statement must contain the following information:
(a) if the product is an FHSA
life policy or an FHSA trust — the composition of the investments of the
product (for example, the percentage of cash, real property and shares in which
money in the product will be invested);
(b) the nature of the return that
the product may generate (for example, fixed interest, variable interest,
rental income or capital gains);
(c) the current rate of return
for the product after tax, or information about how the rate is calculated or where
the rate can be found;
(d) if the balance of the product can decrease:
(i) summary information about the
reasons for that decrease; and
(ii) a summary description of the
likelihood of that decrease (for example, that the product is ‘low risk’).
(3) However, if the product is a multiple investment
option FHSA product, the Statement must contain:
(a) the number of investment options; and
(b) the name of each investment option, set out
in order of lowest risk to highest risk, and identification of the default
investment option; and
(c) the information mentioned in subitem (2)
for the default investment option; and
(d) either:
(i) the information mentioned in
subitem (2) for each other investment option; or
(ii) details of where the information
referred to in subparagraph (i) can be found.
(4) The rate of return for the FHSA product must be calculated
after applicable fees and taxes.
Worked example of balance changing over time
(5) A Product Disclosure Statement for an FHSA deposit
account must also contain:
(a) a worked example of how the balance of the
account will change over 4 financial years, with the balance at the end of the
period after fees and taxes rounded to the nearest multiple of $1 000, using
the following assumptions:
(i) the assumptions mentioned in
paragraphs 16 (5) (a), (c), (d) and (f);
(ii) the holder of the
product makes weekly contributions to the product, each of $100;
(iii) the product earns
a rate of return of 5% per year, after fees and taxes; and
(b) a warning that the rate of return used for
the example may not be the same as the rate of return of the product.
(6) A Statement for an FHSA life policy or an FHSA
trust may contain a worked example of how the balance of the product will
change over 4 financial years, with the balance at the end of the period after
fees and taxes rounded to the nearest multiple of $1 000, using the
following assumptions:
(a) the assumptions mentioned in paragraphs 16 (5) (a),
(c), (d) and (f);
(b) the holder of the product
makes weekly contributions to the product, each of $100;
(c) the product either:
(i) has no earnings;
or
(ii) earns a rate of
return that is reasonable for the product, after fees and taxes.
(7) A Statement that contains an example mentioned in
subitem (6) must also contain:
(a) if the example has no earnings — a
statement that the balance of the product may be increased or decreased by its
earnings; or
(b) if the example earns a rate of return —
a warning that the rate of return used for the example may not be the same as
the rate of return of the product.
8 Contents of section 5
(What happens if your situation changes)
Section 5 of the Product Disclosure Statement must
contain summary information about the effects on the product or the interests
of the holder of the product if the holder:
(a) ceases to meet the FHSA eligibility
requirements; or
(b) fails to make a contribution to the product;
or
(c) needs to take money out of the product to
alleviate financial hardship; or
(d) does not acquire a qualifying interest in a
dwelling after withdrawing the money in the product; or
(e) acquires a qualifying interest in a dwelling
less than 4 years after acquiring the product; or
(f) ceases to be resident in Australia.
9 Contents of section 6
(Using your savings for your first home)
(1) Section 6 of the Product Disclosure Statement must
contain summary information about:
(a) what actions the holder of the product must take
when the holder decides to acquire a qualifying interest in a dwelling using
the money in the product; and
(b) what happens when the holder takes the actions
mentioned in paragraph (a).
(2) Section 6 must also contain a statement that the
holder of the product must live in the dwelling for at least 6 months that
commences within 12 months after its acquisition or completion of its
construction.
10 Contents of section 7
(The fees and costs)
(1) Section 7 of the Product Disclosure Statement must
include:
(a) information on the fees and costs that an
FHSA holder may be charged on the FHSA product; and
(b) an example of the overall cost of the FHSA
product; and
(c) if the Statement is for an FHSA life policy
or an FHSA trust — the consumer advisory;
as set out in Part 2.
(2) However, if the product is a multiple investment
option FHSA product, the Statement must contain:
(a) the information required by subitem (1) for
the default investment option; and
(b) if another investment option is detailed in
the Statement — the information required by subitem (1) for that
investment option; and
(c) either:
(i) the information required by subitem
(1) for each other investment option; or
(ii) details of where the information
referred to in subparagraph (i) can be found.
(3) Also:
(a) if a fee or cost mentioned in Part 2 is
not charged, the Statement does not need to include information relating to the
fee or cost; and
(b) if no fees or no costs are charged at all,
the Statement must state that.
11 Contents of section 8
(How to open an account)
Section 8 of the Product Disclosure Statement must
contain information about:
(a) how to acquire the product; and
(b) the effect and length of the cooling‑off
period; and
(c) how money from the product can be
transferred to another FHSA product.
12 Contents of section 9
(1) Section 9 of the Product Disclosure Statement must
contain the following information:
(a) the name and address of the FHSA provider;
(b) the address of an Internet page, and a phone
number, operated by or for the provider from which a person can obtain further
information about the product;
(c) the dispute resolution system that covers
complaints by holders of the product and how that system may be accessed.
(2) Section 9 must also contain the following text:
First
Home Saver Account enquiries
Information
about how First Home Saver Accounts work, eligibility, fees and taxes, and
links to savings calculators and other useful online tools.
visit www.ato.gov.au
Part 2 Information on fees and costs
13 Definitions
(1) In this Part:
ADI (short for authorised deposit‑taking
institution) means a body corporate that is an ADI for the purposes of the Banking
Act 1959.
small unusual cost means a fee or cost
charged on an FHSA product that:
(a) does not relate to the ordinary acquisition,
operation or closure of the product; and
(b) is less than $10.
Examples for paragraph (a)
A fee for a duplicate statement, or a dishonoured cheque
fee.
(2) If a term used in this Part is defined in Part 1
of Schedule 10, it has the same meaning in this Part as it has in Schedule 10.
14 Presentation of
information on fees and costs
Terminology
(1) If this Part requires that information about a fee
or cost be included in a Product Disclosure Statement, the Statement must use
the term for that fee or cost that is used in this Part or Part 1 of
Schedule 10.
Example
A fee which is an establishment fee as defined in item 101
of Schedule 10 must be referred to in a Product Disclosure Statement as an
“establishment fee”.
(2) However, if the Statement is for an FHSA deposit
account offered or issued by an ADI, the Statement may use the term for a fee
or cost of that kind that is ordinarily used by the ADI for that kind of
account.
Example
A bank may call an establishment fee for its savings
accounts an ‘account opening fee’.
Manner in which fees and costs are to be expressed
(3) If this Part requires that an amount of a fee or a
cost be included in a Product Disclosure Statement, the amount must be
expressed as:
(a) a dollar amount; or
(b) if the amount of the fee or cost is not fixed —
a range of dollar amounts; or
(c) if the amount of the fee or cost is a fixed
percentage of the balance of the account — that fixed percentage.
(4) However, if ASIC is satisfied that, for a compelling
reason, it would be unreasonable for a fee or cost to be expressed as required
by subitem (3), ASIC may determine, in writing, the manner in which the
fee or cost is to be expressed.
Negotiable fees and costs
(5) If a fee or cost is negotiable, the Statement must
clearly indicate that fact, and detail where information may be found about
when and how the fee or cost may be negotiated.
15 Information on fees and
costs
(1) For each fee or cost charged on an FHSA product,
other than a small unusual cost, the Product Disclosure Statement must include
the information set out in subregulation (2).
(2) The fees and costs must be presented in the
following order, and include the following information:
(a) establishment fee — the amount of the
fee;
(b) contribution fee — the amount of the
fee;
(c) management costs:
(i) a summary description of the services
or functions the costs relate to; and
(ii) when the costs are charged; and
(iii) the amount of the costs; and
(iv) if the amount of the costs is not
fixed — how the amount is calculated; and
(v) if there is a minimum or maximum
amount of the costs in a given period of time — the amount and the period
of time;
(d) termination fee — the amount of the fee;
(e) buy‑sell spread:
(i) a summary description of what the
spread relates to; and
(ii) when the spread is charged; and
(iii) the amount of the spread and how
it is calculated;
(f) service fees:
(i) a summary description of the services
the fees relate to; and
(ii) when the fees are charged; and
(iii) the amount of the fees; and
(iv) if the amount of the fees is not
fixed — how the amount is calculated; and
(v) if there is a minimum or maximum
amount of the fees in a given period of time — the amount and the period
of time;
(g) any other fee or cost (indirect costs)
charged on the FHSA product:
(i) a summary description of the fee
or cost and what it relates to;
(ii) when the fee or cost is charged;
(iii) the amount of the fee or cost;
(iv) if the amount of the fee or cost is
not fixed — how the amount is calculated;
(v) if there is a minimum or maximum
amount of the fee or cost in a given period of time — the amount and the
period of time.
Note A fee or cost which is not charged
does not need to be included in the Statement — see subitem 10 (3).
(3) The information mentioned in subitem (2) may be
presented in narrative form, in a table, or in any other form that enables it
to be easily understood and compared with similar information about like
products.
(4) The Statement must also detail where:
(a) further information about fees and costs;
and
(b) information about small unusual costs;
may be obtained.
16 Example of overall cost
(1) The Product Disclosure Statement
must include an example of the fees and costs that may be charged on the FHSA
product over the life of the product (the product’s overall cost).
(2) For subitem (1), the overall
cost of the FHSA product is the sum of the following fees and costs applicable
to the product, when those fees and costs are worked out over the life of the
product using the FHSA assumptions:
(a) establishment fee;
(b) contribution fees;
(c) management costs;
(d) termination fee;
(e) buy‑sell spread;
(f) service fees;
(g) indirect costs.
(3) For paragraph (2) (g),
the indirect costs for an FHSA product are the sum of the annual indirect costs
for each of the 4 financial years that the FHSA product exists under the
FHSA assumptions.
(4) For subitem (3), the annual
indirect costs for a year are worked out as follows:
where:
ICR
has the meaning given in item 104 of Schedule 10.
average balance is the average balance, when the FHSA assumptions are applied, of
the FHSA product during the year .
(5) For this item, the FHSA assumptions
are the following assumptions:
(a) the product commences on
the first day of a financial year, with a balance of $100;
(b) the holder of the product
makes equal weekly contributions to the product, amounting to $5 000 per financial
year;
(c) the Commonwealth makes
Government FHSA contributions to the product:
(i) on 30 November
after the end of each financial year, other than the financial year in which
the product is closed; and
(ii) at the start of the
day on which the product is closed;
(d) no money is withdrawn from
the product (other than for payment of fees and taxes) until it is closed;
(e) the product earns a rate of
return of 5% per year after taxes, but before fees and costs;
(f) the product is closed, and
the balance is withdrawn electronically by the holder for the acquisition of a
qualifying interest in a dwelling, at the end of the last day of the financial
year that is 3 financial years after the product commenced.
(6) The example of overall cost must
be in the following format, with all fees and cost amounts rounded to the
nearest multiple of $10:
Example of the fees and costs
If you put $20,000 into your account over 4 years, our
fees and other costs will total about [insert overall cost as a dollar
amount]. The fees and costs in this example are made up of:
· establishment fee: $[insert establishment fee amount in dollars]
· contribution fees: $[insert contribution fees amount in dollars]
· management costs: $[insert management costs amount in dollars]
· termination fee: $[insert termination fee amount in dollars]
· other fees: $[insert sum of other fees and costs applicable to
the product in dollars]
[For FHSA life policies and FHSA trusts, include the
following:]
This is equal to [insert the equivalent percentage of the product’s
average annual balance that would generate that dollar amount, rounded to one
decimal place (“overall cost ratio”)] of the account balance per year.
[For multiple investment option FHSA products, include
the following:]
These
fees are based on [name of investment option to which assumptions have been
applied].
17 Consumer advisory
The Product Disclosure Statement for an FHSA life
policy or an FHSA trust must include the following statement:
Compare
the fees and costs
Use
the above example of [overall cost ratio] in fees and costs to make a
broad comparison with the fees and costs of other [insert general
description, e.g. bank account, life insurance policy, investment‑linked]
First Home Saver Accounts.