7.6.6 Recovery of penalty interest

7.6.6.1 — Penalty interest is recoverable as if it were recoverable under section 205 VEA. Any repayments made by a person in respect of a debt, reduce the original amount of the debt first. Once the original amount of the debt is wholly repaid, the repayments go towards reducing the penalty interest component and then the administrative charge. The following table indicates the order of recovery of a debt.

If the original debt is...	Then reduce...
not wholly repaid	original debt by the repayment amount until wholly repaid
wholly repaid	penalty interest debt by the repayment amount until wholly repaid
wholly repaid and penalty interest is wholly repaid	administrative charge debt by the repayment amount until wholly repaid (refer this manual's Section 7.6.8 New Administrative Charge)

Source URL: https://clik.dva.gov.au/compensation-and-support-reference-library/overpayment-management-manual/ch-7-recovery-and-other-methods-finalising-debts/76-penalty-interest-and-administrative-charge/766-recovery-penalty-interest