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7.6.6 Recovery of penalty interest

7.6.6.1Penalty 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)