Commonwealth Consolidated Acts

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SOCIAL SECURITY ACT 1991 - SECT 1135

Effect of participation in pension loans scheme--creation of debt

             (1)  If the rate of the pension payable by operation of the pension loans scheme is more than the rate that would have been received by the person but for the operation of the scheme, the person owes a debt to the Commonwealth.

             (3)  This is how to work out the amount of the debt owed by the person from time to time:

Method statement

Step 1.    Work out the sum of the amount of pension received by the person from time to time under the pension loans scheme: the result is the primary loan amount .

Step 2.    Add to the primary loan amount the amount of any registration costs payable by the person under subsection 1143(4): the result is the registration cost adjusted amount .

Step 3.    Take away from the registration cost adjusted amount the sum of the amount of pension (if any) that would have been received by the person but for the operation of the scheme: the result is the basic amount of debt .

Step 4.    Add to the basic amount of debt the amount of interest payable. The interest payable is compound interest at the rate fixed under subsection (4) and compounding fortnightly: the result is the total amount of debt .

Step 5.    From the total amount of debt take away any amount of the debt already paid to the Commonwealth: the result is the current amount of debt owed by the person.

             (4)  The rate at which compound interest is payable under subsection (3) is the rate fixed from time to time by the Minister by legislative instrument.



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