Insolvency Law Reform (Transitional Provisions) Regulation 2016

Administered by Department of the Treasury

Legislation au F2016L01898 Regulations In force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Subject - Insolvency Law Reform Act 2016

 

 Insolvency Law Reform (Transitional Provisions) Regulation 2016

 

The Insolvency Law Reform Act 2016 (the ‘Act’) amends corporate and personal insolvency laws in Australia.

 

Item 178 of Schedule 1 to the Act provides that the Governor-General may make regulations prescribing matters of a transitional nature (including prescribing any savings and application provisions) related to the amendments and repeals made by Schedule 1 to the Act.

 

The purpose of the Insolvency Law Reform (Transitional Provisions) Regulation 2016 (the ‘Regulation’) is to amend the Act to delay commencement of certain aspects of the Insolvency Practice Schedule (Bankruptcy) until 1 September 2017.

 

Details of the Regulation are set out in the Attachment.

 

The Regulation is an instrument for the purposes of the Legislation Act 2003.

 

The Regulation has been informed by public consultation on a proposals paper outlining the contents of the legislative instrument released in 2015 and on a draft of the instrument in 2016. As a result of industry feedback following the passage of the Amending Act, the Australian Government agreed to the partial delay of the commencement of the Amending Act to ensure an efficient transition to the new obligations. In particular, the delay will allow for the development and dissemination of insolvency firm software used by the majority of the industry.

The Regulation will commence on the day that the amending Act commences (which will be 1 March 2017).

 

Authority: Item 178 of Schedule 1 to the

Insolvency Law Reform Act 2016


Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

 Insolvency Law Reform (Transitional Provisions) Regulation 2016

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
 

Overview of the Legislative Instrument

The purpose of the Insolvency Law Reform (Transitional Provisions) Regulation 2016 is to amend the Insolvency Law Reform Act 2016 (the ‘Act’) to delay commencement of certain parts of the Act to 1 September 2017.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 


ATTACHMENT

Details of the Insolvency Law Reform (Transitional Provisions) Regulation 2016

This Attachment sets out further details of the Insolvency Law Reform (Transitional Provisions) Regulation 2016 (the ‘Regulation’). All references are to the Regulation unless otherwise stated.

Part 1 – Preliminary

Section 1 – Name of Regulation

This section will provide that the title of the Regulation is the Insolvency Law Reform (Transitional Provisions) Regulation 2016.

Section 2 – Commencement

This section will provide that the Regulation will commence on the day that Schedule 1 to the Insolvency Law Reform Act 2016 (the ‘Act’).

Section 3 – Authority

This section will provide that the Regulation is made under the authority of item 178 of Schedule 1 to the Act.

Part 2—Transition to Part 3 of the Insolvency Practice Schedule (Bankruptcy)

Section 4 – Application provisions and modifications relating to Part 3

Subsection 4(1) will amend Divisions 3 and 5 (other than item 169) of Part 3 of the Insolvency Practice Schedule (Bankruptcy) so that the commencement day will be 1 September 2017.

Subsection 4(2) will provide that Schedule 1 to the Regulation will modify Divisions 1 and 3 of Part 3 of the Insolvency Practice Schedule (Bankruptcy).

Section 5 – Application of certain consequential amendments relating to the enactment of the Insolvency Practice Schedule (Bankruptcy)

Section 5 will provide that the items listed in this section will apply to administrations of regulated debtors’ estates on and after 1 September 2017.

Schedule 1—Transition to Part 3 of the Insolvency Practice Schedule (Bankruptcy)

Amendments to the Insolvency Law Reform Act 2016

Items 1, 3, 5, 6, 9-17

These items will amend items and subitems in Schedule 1 to the Act to reflect the delayed commencement of certain provisions to 1 September 2017.

Item 2

Item 2 will amend item 118 of Schedule 1 to the Act so that, where a committee has already been convened but the matter has not dealt with before commencement, these matters can be dealt with under provisions of the old Act. 

Item 4

Item 3 will amend item 127 of Schedule 1 to the Act to reflect the delayed commencement of the Application of Part 3 of the Insolvency Practice Schedule (Bankruptcy) to 1 September 2017.

Items 7 and 8

These items will amend subitems in Schedule 1 to the Act to reflect the delayed commencement of certain provisions to 1 September 2017 to remove references to ‘2017‑18’ and ‘2017’ and instead refer to ‘2018-19’ and ‘2018’.

Overview

The Insolvency Law Reform Act 2016 was enacted to modernise and streamline Australia's insolvency laws, addressing issues and gaps in the existing framework to improve efficiency and effectiveness. This legislation, passed by the Parliament of Australia, aims to bring about significant changes to both corporate and personal insolvency laws. The Insolvency Law Reform (Transitional Provisions) Regulation 2016 was subsequently introduced to ensure a smooth transition to the new legal environment by delaying the commencement of certain aspects of the Act. This regulation, made under the authority of the Act, was developed following public consultations and feedback from industry stakeholders, and it aims to provide a buffer period to allow for necessary adjustments, particularly in the form of updated software for insolvency practitioners. The regulation commenced on 1 March 2017, with specific delayed commencement provisions taking effect on 1 September 2017 to facilitate the industry's transition to the new requirements.

Scope and Application

The Insolvency Law Reform Act 2016, as supplemented by the Insolvency Law Reform (Transitional Provisions) Regulation 2016, amends corporate and personal insolvency laws in Australia, aiming to modernise and streamline the insolvency process. The Act applies to individuals, companies, and other entities that are subject to insolvency proceedings, as well as to the practitioners and professionals involved in administering these proceedings. The Act extends across the Commonwealth of Australia, impacting both the administration and oversight of insolvency cases at a national level. The Regulation itself serves to delay certain aspects of the Act, specifically Divisions 3 and 5 of Part 3 of the Insolvency Practice Schedule (Bankruptcy), to 1 September 2017. This delay is intended to provide the insolvency industry with sufficient time to adapt to the new legislative requirements, particularly in updating relevant software systems. The Regulation commences on the same day as the Act, which is 1 March 2017, and is informed by consultations with industry stakeholders. The Regulation does not introduce any new substantive rights or obligations but rather ensures a smooth transition by modifying specific application provisions.

Key Provisions

The Insolvency Law Reform (Transitional Provisions) Regulation 2016 amends the Insolvency Law Reform Act 2016 (the 'Act') to delay the commencement of certain provisions of the Insolvency Practice Schedule (Bankruptcy) to 1 September 2017. Specifically, sections 4(1) and 4(2) of the Regulation modify Divisions 3 and 5 (excluding item 169) of Part 3 of the Insolvency Practice Schedule (Bankruptcy) to reflect the new commencement date, while section 5 ensures that consequential amendments apply to administrations of regulated debtors' estates on and after 1 September 2017. The Regulation is designed to provide a transitional period for stakeholders, particularly insolvency practitioners, to adapt to the changes introduced by the Act. The Regulation imposes specific obligations on the parties governed by the Act. Firstly, it requires that the provisions of Part 3 of the Insolvency Practice Schedule (Bankruptcy) and the consequential amendments only apply to administrations of regulated debtors' estates on and after the new commencement date of 1 September 2017. This includes ensuring that any committee convened prior to this date can still deal with matters under the old Act provisions (section 4(2)). Furthermore, it mandates that any references to financial years or periods before 1 September 2017 are adjusted to reflect the delayed commencement (items 7 and 8 of Schedule 1). The Insolvency Law Reform (Transitional Provisions) Regulation 2016 does not explicitly outline specific offences, penalties, or consequences for non-compliance within its text. However, the broader framework of the Insolvency Law Reform Act 2016 and related insolvency laws would apply. Typically, breaches of insolvency laws can result in civil penalties, including fines and compensation claims, as well as criminal penalties such as imprisonment, depending on the severity and intent behind the breach. The specific penalties for non-compliance would be determined by the courts based on the relevant provisions of the Act and other applicable laws. In summary, the Insolvency Law Reform (Transitional Provisions) Regulation 2016 provides a transitional period for certain insolvency provisions to commence on 1 September 2017, imposing specific obligations on stakeholders to ensure compliance with the delayed start date. While the Regulation itself does not detail penalties for non-compliance, it operates within a broader legislative framework that includes both civil and criminal penalties for breaches of insolvency laws.

Legal classification tags

Area of Law
Insolvency Law
Instrument
Regulation
Concepts
Commencement Provisions
Transitional Provisions
Repeal & Amendment

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.