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SOCIAL SECURITY ACT 1991 - SECT 1061ZZCH

Calculation of amount outstanding under financial supplement contract at a later time

  (1)   Subject to subsections   1061ZZCN(6) and (7), the amount outstanding under a financial supplement contract at a time (the test time ) during a period of 12 months (the test period ) referred to in either of the following paragraphs:

  (a)   the period of 12 months beginning on 1   June in the year immediately after the year in which the contract was made; or

  (b)   any of the following 3 periods of 12 months;

is the amount worked out using the formula:

Start formula open bracket Previous amount outstanding times Indexation factor close bracket minus open bracket Amounts repaid plus Discounts close bracket end formula

  (2)   For the purpose of applying the formula in subsection   (1) at the test time:

"amounts repaid" means the total of the amounts repaid under the contract during the test period but before the test time.

"discounts" means the total of the discounts to which the person became entitled during the test period but before the test time.

"indexation factor" means the number worked out using the method statement in subsection   (3).

"previous amount outstanding" means the amount outstanding under the contract immediately before the beginning of the test period.

  (3)   The Method statement for the purposes of the definition of indexation factor in subsection   (2) is as follows:

Method statement

Step 1.   Work out the total of the index number for the March quarter in the later reference period and the index numbers for the 3 immediately preceding quarters.

Step 2.   Work out the total of the index number for the March quarter in the earlier reference period and the index numbers for the 3 immediately preceding quarters.

Step 3.   Divide the total worked out under Step 1 by the total worked out under Step 2.

Step 4.   Round the result to 3 decimal places.

  (4)   In subsection   (3):

"earlier reference period" means the period of 12 months immediately before the later reference period.

"later reference period" means the period of 12 months immediately before the test period.

  (5)   If an indexation factor worked out under subsection   (3) would end with a number greater than 4, were it to be worked out to 4 decimal places, the indexation factor is increased by 0.001.

  (6)   If, apart from this subsection, an amount worked out under this section would be an amount of dollars and cents, disregard the amount of the cents.

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