Document ID: chunk:federal_register_of_legislation:F2025C00076:reg:87
Version: federal_register_of_legislation:F2025C00076
Segment Type: reg
Provision Reference: reg 87
Character Range: 111778–113944

87  Method for working out amounts of periodic payments
 (1) The amount of a periodic payment to be paid by a care recipient must be the amount worked out in accordance with the following formula:
where:
IR is the lower of:
 (a) the interest rate stated in the care recipient's accommodation bond agreement; and
 (b) the maximum permissible interest rate for the care recipient's entry day.
LSE is the amount of the care recipient's lump sum equivalent.
NPP is the number of periodic payments payable by the care recipient in the relevant year.
RC is the amount of the retention component worked out:
 (a) if no part of the accommodation bond is paid as a lump sum—in accordance with subsection (2); or
 (b) if part of the accommodation bond is paid as a lump sum—in accordance with subsections (3) and (4) and, if applicable, (5).
Note: See also section 57‑20 of the Transitional Provisions Act and Subdivision E of Division 5 of this Part.
 (2) The amount of the retention component must not exceed the maximum retention amount that may be deducted under section 97, during the year beginning on the entry day, from the amount that would have been the accommodation bond balance if the care recipient had paid the whole of the accommodation bond as a lump sum.
 (3) If part of the accommodation bond is paid as a lump sum, the amount of the retention component of the periodic payments is reduced, on a proportionate basis, in accordance with the ratio of the lump sum equivalent to the amount of the accommodation bond.
 (4) However, if the lump sum is sufficient to cover the total of the retention amounts for the period of 5 years for the whole of the bond, including the lump sum equivalent, and the care recipient elects:
 (a) the amount of the retention component is nil; and
 (b) the total of the retention amounts, including the retention component that would otherwise be payable on the lump sum equivalent, may be deducted from the amount paid as a lump sum.
 (5) For subsection (4):
 (a) the period of 5 years begins on the care recipient's entry day; and
 (b) the care recipient's election must be made in writing and given to the approved provider.