Recalculation of Statutory Deposit after Withdrawal
Clause 10(3) of the Legal Profession Uniform Law Application Regulation 2015 provides the mechanism for the recalculation and adjustment of the statutory deposit when a repayment (withdrawal) from the deposit is made pursuant to Section 47 of the Legal Profession Uniform Law Application Act 2014.
After the withdrawal, the law practice must recalculate the amount required to be deposited.
The first step is to determine whether or not a deposit is required. The following procedure should be carried out:
(a) Note that the minimum balance consists of two elements at all times:
(b) Review the authorised ADI statements and statutory deposit details from the start of the current applicable period to 15 banking days after the repayment (withdrawal). Select the lowest authorised ADI statement balance and add the amount held on statutory deposit on that day to determine a minimum balance for this period.
(c) Review the authorised ADI statements and statutory deposit details for the previous applicable period. Select the lowest authorised ADI statement balance and add the amount held on statutory deposit on that day to determine a minimum balance for this period.
(d) If either one of the minimum balances in (b) or (c) is less than $10,000, then the statutory deposit may be withdrawn.
(e) If the minimum balance of both (b) and (c) is $10,000 or greater, the lower balance of (b) or (c) is the new statutory deposit calculation (rounded up to the next hundred dollars). This new statutory deposit calculation should then be compared with the amount currently held on statutory deposit. If the difference allows a withdrawal which is sufficient for your requirements, then this may be carried out as shown in Chapter 14.9 of the Legal Accounting Handbook.
(f) If the above calculation requires an increase in the required statutory deposit, the law practice must make this increased deposit not later than 20 banking days after the day on which the money was repaid (withdrawn). There will be occasions where the law practice is unable to make the adjustment, and the practice should write to the Trust Accounts Department of the Law Society (by completing the Request for Determination of Statutory Deposit form) requesting a determination of the amount required to be deposited and kept deposited in the Statutory Deposit account.
(g) All deposits and withdrawals should be recorded in the Statutory Deposit ledger account.