Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2021
I, Anne Ruston, Minister for Families and Social Services, make the following Determination.
Dated 16 December 2021
Anne Ruston
Minister for Families and Social Services
Contents
1 Name
2 Commencement
3 Authority
4 Definitions
5 Schedules
6 Rate of Compound Interest
Schedule 1—Repeals
Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2019
1 Name
This instrument is the Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2021.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this instrument. | 1 January 2022. | 1 January 2022. |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under subsection 1135(4) of the Social Security Act 1991.
4 Definitions
In this instrument:
Act means the Social Security Act 1991.
5 Schedules
Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
6 Rate of Compound Interest
The rate at which compound interest is payable under subsection 1135(3) of the Act is 3.95 per cent per annum.
Schedule 1—Repeals
Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2019
1 The whole of the instrument
Repeal the instrument
Overview
The Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2021, enacted on 1 January 2022, was introduced to set the rate of compound interest payable on pension loans under the Social Security Act 1991. This notifiable instrument was made by Anne Ruston, the Minister for Families and Social Services, under subsection 1135(4) of the Act. The primary objective of this determination is to establish a specific rate for compound interest applicable to pension loans, thereby ensuring clarity and consistency in the financial obligations of recipients of such loans. This determination repealed the previous Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2019, replacing it with a new rate of 3.95 per cent per annum.
Scope and Application
The Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2021, made under subsection 1135(4) of the Social Security Act 1991, establishes the rate of compound interest applicable to the Pension Loans Scheme within the Commonwealth of Australia. This instrument applies to all individuals and entities engaged in the administration and provision of pension loans under the Act, specifically those who are eligible for and have availed of loans from their superannuation funds. The Determination sets a uniform rate of 3.95 per cent per annum for compound interest, which is to be applied to all outstanding balances as of 1 January 2022. This interest rate supersedes the previous determination, the Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2019, which is repealed by this instrument. There are no stated exclusions or exemptions within the text, though the application of the interest rate is contingent upon compliance with the overarching Social Security Act 1991. The instrument's provisions come into effect on 1 January 2022, as outlined in the commencement section of the Determination.
Key Provisions
The main operative section of the Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2021 (section 6) specifies the rate of compound interest payable under subsection 1135(3) of the Social Security Act 1991. This rate is set at 3.95 per cent per annum. This instrument also includes a schedule (Schedule 1) that repeals the previous determination, the Social Security (Pension Loans Scheme – Rate of Compound Interest) Determination 2019, effective from 1 January 2022.
The Determination imposes specific obligations on the entities governed by it. These obligations include adhering to the new rate of compound interest specified in section 6, which must be applied to pension loans made under the Social Security Act 1991. Additionally, it mandates that the 2019 Determination be repealed and no longer apply from the commencement date of this new Determination.
The Determination does not explicitly outline specific offences or penalties for non-compliance with the prescribed interest rate. However, failure to comply with the rates stipulated by the Social Security Act 1991 and its subordinate legislation could potentially lead to civil or administrative consequences. These could include financial penalties, interest charges on outstanding amounts, or other corrective actions as deemed appropriate by the relevant authorities. The exact nature and severity of these penalties would be governed by the overarching Social Security Act 1991 rather than the Determination itself.