DATE OF ISSUE: 14 JANUARY 1998
PENSION LOANS SCHEME INTEREST RATE CHANGE
Purpose
The purpose of this Departmental Instruction is to advise of a change to the rate of simple interest under the original Pension Loans Scheme (PLS) and compound interest charged under the revised Pension Loans Scheme.
How PLS interest rate is changed
Under subsection 52ZC(4) of the previous pension loans scheme referred to in Section 6 of the Transitional and Savings provisions in Schedule 5 of the Veterans' Entitlements Act 1986, simple interest is payable on a PLS debt to the Commonwealth at a rate fixed from time-to-time by the Minister for Social Security by determination in writing.
Under subsection 52ZC(4) of the Veterans' Entitlements Act 1986, compound interest is payable on a PLS debt to the Commonwealth at a rate fixed from time-to-time by the Minister for Social Security by determination in writing.
New PLS interest rate
The rate of simple interest payable for a debt owed by a person under the previous PLS was changed to 7.0% (simple interest) by the Minister for Social Security in a determination which commenced on 25 December 1997. This determination was notified in the Commonwealth of Australia Special Gazette No. S554, 23 December 1997.
The rate of compound interest payable for a debt owed by a person under the PLS was changed to 5.25% (compound interest) by the Minister for Social Security in a determination which commenced on 20 March 1997. This determination was notified in the Commonwealth of Australia Special Gazette No. S556, 23 December 1997.
Any Questions
Any questions about the PLS interest rate should be directed to John Bruce on telephone 02 6289 6441, fax 02 62894853.
BOB HAY
BRANCH HEAD
INCOME SUPPORT
January 1998