7.6.3 Penalty interest

7.6.3.1 — A person may be liable to pay penalty interest on a debt if the person:

• has received a further notice; and
• is not in receipt of pension, allowance or other pecuniary benefit under the VEA or Social Security Law.

7.6.3.2 — A person is liable to pay penalty interest from and including the day after the 'final payment day' if the person:

• has not entered into an arrangement to pay the debt on or before the 'final payment day'; and
• has been notified in writing about the effects of penalty interest.

Or

• has entered into an arrangement to pay the debt; and
• has been notified in writing about the effects of penalty interest; and
• fails to make a payment, as arranged, on or before the final payment day.

7.6.3.3 — A person is liable to pay penalty interest from and including the day after the last payment was made if the person:

• has entered into an arrangement to pay the debt; and
• has been notified in writing about the effects of penalty interest; and
• fails to make a payment, as arranged, after the final payment day.

Note:Penalty interest can only be applied from the day after the 'final payment day' and not prior to that day. For the definition of 'final payment day' refer to this manual's Section 7.6.4.

7.6.3.4 — If the Commission is satisfied that a person has a reasonable excuse for not entering into a repayment arrangement or for breaking one, it has the discretion under section 205AAC VEA not to apply penalty interest at all, or for a particular period.

7.6.3.5 — A person is not liable to pay penalty interest on a debt, or any portion of a debt, that arose due to administrative error.

7.6.3.6 — Regardless of whether a person has sought a review of the decision to retrospectively reduce their rate of pension penalty interest may still be applied from the day after the final payment day. If the review decision is favourable, any repaid amounts, including repaid penalty interest, must be refunded to the pensioner.

Note:The VEA does not contain a right of appeal against the imposition of penalty interest or administrative charge.