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62/1998 Changes to Agreement - Subsidy Administration, Payment & Excess Credits
Defence Service Homes
National Office Instruction
amending DSH General Orders (1993 edition)
Instruction No. 62
Date of Effect: On receipt
CHANGES TO AGREEMENT
- SUBSIDY ADMINISTRATION
- PAYMENT OF SUBSIDY
- EXCESS CREDITS
The purpose of this Instruction is to introduce changes to the Subsidy Administration General Orders following the changes to the Agreement between the Commonwealth and the Westpac Banking Corporation which were endorsed on 26 February 1998. The opportunity is also taken to make a minor amendment to Subsidy Procedural Matters General Order 4.1.
The Fourth Supplementary Agreement dated 26 February 1998 amended the original Agreement dated 9 November 1988 and the Second Supplementary Agreement dated 4 November 1992.
As the General Orders include references to relevant clauses in the Agreement, there are a number of changes which need to be made to the Subsidy Administration General Orders. They relate mainly to Clause 9 - Excess Credits, and Clause 11 - Calculation and payment of Subsidy.
Changes to the Agreement
The changes to Clause 9 delete references to Banking Accounts and the rule for applying excess credits in accordance with the former Reg. 23. They also allow the introduction of fees for withdrawals from loan accounts established on and from 5 January 1998.
The changes to Clause 11 allow for the payment of the 1.5% pa interest subsidy guarantee while the Benchmark Rate is within 1.5% pa of the applicable capped rate of the loan. They also provide for the continuation of subsidy for up to six months after the sale of a DSH property where the borrower intends to acquire another property within that time-frame and for the cancellation and recovery of subsidy if another security has not been substituted within the six months period.
Sub-clause 11.5B.1 has also been amended to provide for the payment of subsidy on either the 18 — th day of the month or 7 business days after receiving the invoice from the Bank, whichever is the later.
The revised Schedule D of the Agreement changes the details to be provided by the Bank on the monthly subsidy tape.
The above changes to the Agreement have been incorporated into the Subsidy Administration General Orders. The following amendments have also been made.
GO 4.2.1 has been amended to reflect that a 'progressive draw' facility is no longer available. It also reflects the revised deadline for the payment of monthly subsidy to the Bank.
A new GO 126.96.36.199 has been inserted providing for the termination/suspension and/or recovery of subsidy where substitution of security has not occurred within six months of the sale of the former DSH property where subsidy has continued under Clause 11.2A of the Agreement.
An amended Index has also been prepared.
Because of the extent of these changes, the entire Subsidy Administration General Orders have been reprinted. Please replace the existing Subsidy Administration GOs with the revised version.
Subsidy Procedural Matters
GO 4.1 has been amended to reflect the changed interest rates for Advances for Essential Repairs. This amendment was missed when NOI 61 was issued.
Effect on previously issued NOIs
This instruction has no effect on any previously issued operative NOI.
Housing and Aged Care
8 April 1998