Where there is an amount of permanent impairment (PI) compensation determined payable to a client under section 24 or 25, the Commission is required to pay this amount within 30 days if the Commission is to avoid paying interest. There is no statutory timeframe attached to a s45 action for damages election, however given that there is a statutory timeframe associated with the payment of PI every effort should be made to meet this timeframe once an election form has been returned to DVA electing to take the PI compensation. Where no response has been received in relation to a s45 choice (i.e. where the election form has not been returned) it is appropriate for the delegate to make contact with the client with a view to identifying any difficulties the client may be having in reaching a decision. While delegate discretion can be used to delay payment if a client is uncontactable and doubt exists over their intention to accept compensation or take action for damages, payments should not be delayed indefinitely. If all practical efforts have been made to contact the client and ascertain the election choice without success, the payment can be made if this is considered reasonable.
If the compensation payment is delayed beyond 30 days then, under section 26, interest is payable from the day the 30 day period elapses to the date of the payment. The interest rate payable is the “weighted average yield of 3 month Bank Accepted Bills/Negotiable Certificates of Deposit, over 3 months, 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 the column 3-month BABs/NCDs (description - Bank Accepted Bills/Negotiable Certificates of Deposit - 3 months) which gives you the weighted average yield of the end of day bank bill rate.
If the link above does not work, go to the RBA website. 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 Markets - Daily - F1".
Example of calculating an interest payment
1. RBA interest rate ÷ 100 = interest rate percentage
2. Interest rate percentage x section 24 award 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 24 award amount: $12,706.00
Days late: 168
- 4.75 ÷ 100 = 0.0475 (interest rate percentage)
- 0.0475 x 12706 = 603.535 (yearly amount)
- 603.535 ÷ 365 = 1.6535 (daily amount)
- 1.6535 x 168 = $277.79 (amount payable)