If the client elects to receive a lump sum, the Commission has 30 days from the date it becomes aware of the client's choice in which to pay, otherwise interest is payable under subsection 79 (2) from the day the 30 day period elapses. The interest rate payable is the “weighted average yield of 90 day bank-accepted bills, as published by the Reserve Bank of Australia, settled immediately prior to the last day of the thirty day settlement period”. This rate is available from the Reserve Bank's website via the following link –

http://www.rba.gov.au/statistics/tables/index.html#interest-rates

This is the easiest way to access the applicable interest rate on any day - once in the spreadsheet, scroll down to the latest daily rate and look across under "Bank Accepted Bills" to 90 day - this gives you the weighted average yield of 90 day bank-accepted bills.

If the link above does not work, go to http://www.rba.gov.au.  Once there, click onto “Statistics” located along the top of the screen. Click on ‘Economic and Financial Statistics”, and then "Statistical Tables" then scroll down to "Interest Rate" and click on "Interest Rates and Yields - Money Mark - Daily - F1".

Example of calculating an interest payment

1.         RBA interest rate ÷ 100 = interest rate percentage

2.         Interest rate percentage x section 78 Lump Sum amount = yearly amount

3.         Yearly amount ÷ 365 = daily amount

4.         Daily amount x number of days late = amount payable

Example:

Interest rate: 4.75%

Section 78 Lump Sum amount: $12,706.00

Days late: 168

1. 4.75 ÷ 100 = .0475 (interest rate percentage)
2. 0475 x 12706 = 603.535 (yearly amount)
3. 603.535 ÷ 365 = 1.6535 (daily amount)
4. 1.6535 x 168 = $277.79 (amount payable)

Lump Sum election and Death

Claimants who have a terminal illness, or who have a  high probability of a reduced lifespan should be made aware that while periodic payments will cease upon death, if they did elect to take a lump sum, then no proportion of their lump sum would be recovered as a result of their death.

If no election is made, then after the member/former member's death, the legal personal representative of a deceased person is not entitled to choose to convert any percentage of a weekly amount that was payable to the deceased person to a lump sum.