Labor backing unclaimed money bill

Labor is backing government laws reversing its three-year deadline on unclaimed money from dormant bank accounts.

Draft laws extending the time before funds from inactive accounts are forcibly transferred to Treasury coffers passed the lower house on Monday.

It restores a seven-year trigger changed to three years by Labor in 2013.

Shadow assistant treasurer Andrew Leigh said the opposition recognised the three-year timeframe ended up capturing some active accounts.

It was important to get the balance right between protecting the value of savings and ensuring accounts are not claimed incorrectly, he told parliament on Monday.