PART 4
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OVERPAYMENTS AND DEBT RECOVERY
Division 2
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Amounts recoverable under this Act
SECTION 78
Interest charge
-
no repayment arrangement in effect
78(1)
If:
(a)
a notice is given to a person under subsection
77(1)
in relation to a debt; and
[
CCH Note:
No 55 of 2016, s 3 and Sch 12 item 46(1) provides that para (a) is applicable in relation to a notice given on or after 1 January 2017 (whether the debt arose before, on or after 1 January 2017).]
(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
91
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
78D
and
78E
.
78(2)
The period starts 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
91
in relation to the debt.
78(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
78C
.
Note 2:
The interest charge for a day is due and payable to the Commonwealth at the end of that day and is a debt due to the Commonwealth: see section
78B
.
History
S 78 substituted by No 55 of 2016, s 3 and Sch 12 item 3, effective 1 January 2017. S 78 formerly read:
SECTION 78 Interest on debt
78(1)
This section applies to a person who:
(a)
receives a further notice given under subsection 77(3); and
(b)
is not receiving instalments of family tax benefit.
78(2)
If:
(a)
the person has not entered into an arrangement, on or before the final payment day, to pay the outstanding amount of the debt; and
(b)
the Secretary has notified the person in writing that the person will be required to pay interest under this subsection;
the person is liable to pay interest:
(c)
from and including the first day after the final payment day until the debt is wholly paid; and
(d)
at the penalty interest rate;
on the outstanding amount from time to time.
78(2A)
Under this section, a person is not liable to pay interest on a debt, or the proportion of a debt, that was incurred because of an administrative error made by the Commonwealth or an agent of the Commonwealth.
78(3)
If:
(a)
the person has entered into an arrangement to pay the outstanding amount of the debt; and
(b)
the person has failed to make a particular payment in accordance with the arrangement; and
(c)
the Secretary has notified the person in writing that the person will be required to pay interest under this subsection;
the person is liable to pay interest:
(d)
if the failure occurs on or before the final payment day
-
from and including the first day after the final payment day until the debt is wholly paid; or
(e)
if the failure occurs after the final payment day
-
from and including the day after the day in respect of which the last payment in respect of the debt was made until the debt is wholly paid;
at the penalty interest rate, on the outstanding amount from time to time.
78(4)
For the purposes of subsections (2) and (3), the
final payment day
is the latest of the following days:
(a)
the 90th day after the day on which the outstanding amount of the debt was due and payable;
(b)
the 28th day after the date of the further notice given under subsection 77(3);
(c)
if a request for review has been made within 90 days after the receipt of a notice issued under subsection 77(1)
-
90 days after the day on which an authorised review officer makes a decision in respect of the request.
78(5)
The interest payable on the outstanding amount of a debt is a debt due to the Commonwealth.
78(6)
If:
(a)
interest is payable on the debt; and
(b)
an amount is paid for the purpose of paying the debt and the interest;
the amount so paid is to be applied as follows:
(c)
until the debt (excluding interest) is fully paid
-
in satisfaction of the amount of the debt that is due when the payment is made;
(d)
after the debt (excluding interest) is fully paid
-
in satisfaction of the interest that had become payable on the debt before the debt was fully paid.
78(7)
In this section:
arrangement
means:
(a)
an arrangement entered into with the Secretary under section 91; or
(b)
if such an arrangement has been amended
-
the arrangement as amended.
S 77, 78, 78A and 78B substituted for s 77 and 78 by No 47 of 2001, s 3 and Sch 3 item 3, effective 1 July 2001. For application provisions, see note under s 77. S 78 formerly read:
Interest payable on debt for breach of agreement to pay debt
78(1)
If:
(a)
a person owes a debt to the Commonwealth under a provision of this Part; and
(b)
the person owing the debt is a person who is not receiving instalments of family tax benefit; and
(c)
the person enters into an agreement to pay the debt by reasonable instalments; and
(d)
the person does not pay an instalment;
the Secretary may give the person a notice advising the person of the following:
(e)
the amount of the debt;
(f)
that, unless the person pays the instalment within 14 days after the notice is given, interest may become payable on the debt;
(g)
how any interest that becomes payable is to be calculated.
History
S 78(1) amended by No 45 of 2000, s 3 Sch 2 item 80, by substituting para (b), effective 1 July 2000. For transitional provisions see note under s 69. Para (b) formerly read:
(b)
the person owing the debt is a person who is not receiving instalments of family tax benefit; and
(i)
the person owing the debt is a person who is not receiving instalments of family assistance; or
(ii)
the person owing the debt is an approved child care service who is not receiving group payments; and
78(2)
Subject to subsections (3) and (4), if the instalment is not paid within 14 days after the person is given the notice, interest is payable by way of penalty on the debt by the person and the amount of interest is to be worked out under subsection (5).
78(3)
The Secretary may determine in writing that interest is not payable on the debt if the Secretary is satisfied that the person intends to pay the instalment as soon as is reasonably practicable having regard to the person's circumstances.
78(4)
Interest payable under subsection (2) ceases to accrue on and from the day the person:
(a)
next pays the instalment due under an agreement; or
(b)
enters into a new agreement;
whichever first occurs.
78(5)
Interest is payable on the amount of the debt (excluding interest) as remains due from time to time:
(a)
on and from the day after the 14 day period ends; and
(b)
at the penalty interest rate set under section
79
.
78(6)
If:
(a)
interest is payable on the debt; and
(b)
an amount is paid for the purpose of paying the debt and interest;
the amount is to be applied as follows:
(c)
until the debt (excluding interest) is fully paid
-
in satisfaction of the amount of the debt that is due when the payment is made;
(d)
after the debt (excluding interest) is fully paid
-
in satisfaction of the interest that had become payable on the debt before it was fully paid.
78(7)
The interest payable on the debt is a debt due to the Commonwealth.
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