Budget Savings (Omnibus) Act 2016 (55 of 2016)

Schedule 12   Interest charge

Part 1   Amendments

Student Assistance Act 1973

43   Sections 39A, 40 and 41

Repeal the sections, substitute:

40 Notice in respect of relevant debt

(1) If a relevant debt owed by a person to the Commonwealth has not been wholly paid, the Secretary must give the person a notice specifying:

(a) the date on which it was issued (the date of the notice ); and

(b) the reason the debt was incurred, including a brief explanation of the circumstances that led to the debt being incurred; and

(c) the period to which the debt relates; and

(d) the outstanding amount of the debt at the date of the notice; and

(e) the day on which the outstanding amount is due and payable; and

(f) the effect of sections 41 and 41A; and

(g) that a range of options is available for repayment of the debt; and

(h) the contact details for inquiries concerning the debt.

(2) The outstanding amount of the debt is due and payable on the 28th day after the date of the notice.

(3) The Secretary may give more than one notice under subsection (1) in relation to a person and a relevant debt of the person.

41 Interest charge - no repayment arrangement in effect

(1) If:

(a) a notice is given to a person under subsection 40(1) in relation to a relevant debt; and

(b) an amount (the unpaid amount ) of the debt remains unpaid at the end of the day (the due day ) on which the debt is due to be paid; and

(c) at the end of the due day, there is no arrangement in effect under section 41F in relation to the debt;

then the person is liable to pay, by way of penalty, interest charge, worked out under subsection (3), for each day in the period described in subsection (2).

Note: For exemptions, see sections 41D and 41E.

(2) The periodstarts at the beginning of the day after the due day and ends at the end of the earlier of the following days:

(a) the last day at the end of which any of the following remains unpaid:

(i) the unpaid amount;

(ii) interest charge on any of the unpaid amount;

(b) the day before the first day, after the due day, on which the person makes a payment under an arrangement under section 41F in relation to the debt.

(3) The interest charge for a day in the period described in subsection (2) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:

(a) the unpaid amount;

(b) the interest charge from previous days.

Note 1: For interest charge rate see section 41C.

Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day: see section 41B.

41A Interest charge - failure to comply with or termination of repayment arrangement

(1) If:

(a) an arrangement is in effect under section 41F in relation to a person and a relevant debt; and

(b) the person fails to make a payment under the arrangement;

then the person is liable to pay, by way of penalty, interest charge, worked out under subsection (3), for each day in the period described in subsection (2).

Note: For exemptions, see sections 41D and 41E.

(2) The periodstarts at the beginning of the day after the day (the due day ) on which the payment was required to be made under the arrangement and ends at the end of the earliest of the following days:

(a) the last day at the end of which any of the following remains unpaid:

(i) the outstanding amount of the debt;

(ii) interest charge on any of the outstanding amount of the debt;

(b) the day before the first day, after the due day, on which the person has paid all the payments that have so far become due and payable under the arrangement;

(c) the day before the day the arrangement is terminated under section 41F.

(3) The interest charge for a day in the period described in subsection (2) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:

(a) the outstanding amount of the debt;

(b) the interest charge from previous days.

Note 1: For interest charge rate see section 41C.

Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day: see section 41B.

Repayment arrangement is terminated

(4) If:

(a) an arrangement is in effect under section 41F in relation to a person and a relevant debt; and

(b) the arrangement is then terminated under section 41F on a day (the termination day );

then:

(c) the following amounts (if any) are due and payable on the 14th day after the termination day:

(i) the outstanding amount of the debt;

(ii) interest charge on any of the outstanding amount of the debt; and

(d) if, at the end of that 14th day, any of those amounts remains unpaid, the person is liable to pay, by way of penalty, interest charge, worked out under subsection (6), for each day in the period described in subsection (5).

Note: For exemptions, see sections 41D and 41E.

(5) The periodstarts at the beginning of the day after that 14th day and ends at the end of the earlier of the following days:

(a) the last day at the end of which any of the following remains unpaid:

(i) the outstanding amount of the debt;

(ii) interest charge on any of the outstanding amount of the debt;

(b) the day before the first day, after that 14th day, on which the person makes a payment under another arrangement under section 41F in relation to the debt.

(6) The interest charge for a day in the period described in subsection (5) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:

(a) the outstanding amount of the debt;

(b) the interest charge from previous days.

Note 1: For interest charge rate see section 41C.

Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day: see section 41B.

41B When interest charge becomes due and payable

The interest charge under section 41 or 41A for a day is due and payable to the Commonwealth at the end of that day.

Note: The interest charge for a day is a debt owed to the Commonwealth: see section 39.

41C What is the interest charge rate ?

(1) For the purposes of sections 41 and 41A, the interest charge rate for a day is the rate worked out by adding 7 percentage points to the base interest rate for that day, and dividing that total by the number of days in the calendar year.

(2) The base interest rate for a day depends on which quarter of the year the day is in. For each day in a quarter in column 1 of the table, it is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia for the month in column 2 of the table.

(3) If the monthly average yield of 90-day Bank Accepted Bills for a particular month in column 2 of the table in subsection (2) is not published by the Reserve Bank of Australia before the beginning of the relevant quarter, assume that it is the same as the last monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia before that month.

(4) The base interest rate must be rounded to the second decimal place (rounding .005 upwards).

41D Exemption from interest charge - general

(1) A person is not liable to pay interest charge under section 41 or 41A if on the day before the start of the period in respect of which the person would otherwise have been liable to pay that charge:

(a) the person is receiving instalments under the ABSTUDY scheme (also known as the Aboriginal Study Assistance Scheme) that includes an amount identified as living allowance; or

(b) the person is receiving instalments under the Assistance for Isolated Children Scheme; or

(c) the person is receiving instalments of family tax benefit (within the meaning of the A New Tax System (Family Assistance) Act 1999); or

(d) the person is receiving a social security payment (within the meaning of the Social Security Act 1991); or

(e) the person is receiving a payment of pension or allowance under the Veterans' Entitlements Act 1986; or

(f) the circumstances determined in an instrument under subsection (2) apply in relation to the person.

(2) The Minister may, by legislative instrument, determine circumstances for the purposes of paragraph (1)(f).

41E Exemption from interest charge - Secretary's determination

(1) The Secretary may determine that interest charge is not payable, or is not payable in respect of a particular period, by a person on the outstanding amount of a relevant debt.

(2) The Secretary may make a determination under this section in circumstances that include (but are not limited to) the Secretary being satisfied that the person has a reasonable excuse for:

(a) failing to enter into an arrangement under section 41F to pay the outstanding amount of the debt; or

(b) having entered an arrangement, failing to make a payment in accordance with that arrangement.

(3) The determination may relate to a period before, or to a period that includes a period before, the making of the determination.

(4) The determination may be expressed to be subject to the person complying with one or more specified conditions.

(5) If the determination is expressed to be subject to the person complying with one or more specified conditions, the Secretary must give written notice of the determination to the person as soon as practicable after the determination is made.

(6) If:

(a) the determination is expressed to be subject to the person complying with one or more specified conditions; and

(b) the person contravenes a condition or conditions without reasonable excuse;

the determination ceases to have effect from and including the day on which the contravention or the earliest of the contraventions occurred.

(7) The Secretary may cancel or vary the determination by written notice given to the person.

41F Arrangement for payment of relevant debt

(1) The Secretary may, on behalf of the Commonwealth, enter into an arrangement with a person under which the person is to pay a relevant debt, owed by the person to the Commonwealth, or the outstanding amount of such a debt, in a way set out in the arrangement.

(2) If a person is required to make a payment under an arrangement entered into under subsection (1) before the end of a particular day, the person must make that payment before the end of that day.

(3) An arrangement entered into under subsection (1) has effect, or is taken to have had effect, on and after the day specified in the arrangement as the day on which the arrangement commences (whether that day is the day on which the arrangement is entered into or an earlier or later day).

(4) If an arrangement entered into under subsection (1) does not specify a day as mentioned in subsection (3), it has effect on and after the day on which it is entered into.

(5) The Secretary may terminate or alter an arrangement entered into under subsection (1):

(a) at the debtor's request; or

(b) after giving 28 days' notice to the debtor of the proposed termination or alteration; or

(c) without notice, if the Secretary is satisfied that the person has failed to disclose material information about his or her true capacity to repay the debt.

41G Guidelines on interest charge provisions

The Minister may, by legislative instrument, determine guidelines relating to the operation of the provisions of this Division dealing with interest charge.