Document ID: chunk:federal_register_of_legislation:C2004A04491:body:0:p25
Version: federal_register_of_legislation:C2004A04491
Segment Type: other
Provision Reference: 
Character Range: 62849–66295

part settlement, of the overpayment outstanding; and

    (b)     the balance is held in trust for the vendor's benefit until the second investigation is completed.

"(3) If the purchaser payment is equal to or more than the overpayment, the vendor payment is held in trust for the vendor's benefit until the second investigation is completed.

Treatment of amount paid in respect of overpayment outstanding to which subsection 65K(6) applies—Step 2: second investigation amount

  "65S.(1) This section:

    (a)     applies if the overpayment outstanding in respect of the nursing home has been determined under subsection 65K(6); and

    (b)     sets out how the balance of the vendor payment, held in trust, is to be dealt with when the second investigation is completed.

"(2) If the second investigation establishes that no overpayment in respect of that investigation period is payable by the vendor, the balance of the vendor payment is paid to the vendor.

  "(3) If:

  (a) the second investigation establishes that there has been, in

     respect of that investigation period, an overpayment for which the vendor is liable; and

    (b) the Commonwealth, under section 65H, holds in trust a part of the purchaser payment in respect of the overpayment that is equal to, or higher than, the overpayment;

the balance of the vendor payment is paid to the vendor.

  "(4) If:

     (a)     the second investigation establishes that there has been, in respect of that investigation period, an overpayment for which the vendor is liable; and

     (b)     the Commonwealth holds in trust a part of the purchaser payment in respect of the overpayment that is less than the overpayment;

then:

     (c)     if the balance of the vendor payment is equal to or less than the difference ('outstanding debt') between the overpayment and the purchaser payment—the balance of the vendor payment is taken to have been paid to the Commonwealth in settlement or part settlement of the outstanding debt; or

     (d)     if the balance of the vendor payment is more than the outstanding debt:

         (i) so much of the balance of the vendor payment as is equal to the outstanding debt is taken to have been paid to the Commonwealth in settlement of that debt; and

      (ii) the remainder is paid to the vendor.

Note: See examples in the following tables:

Example of operation of paragraphs 65S(4)(a), (b) and (c)
Facts
1.                                                                                      The amount of the overpayment (OP) established by the second investigation is $65,000.
2.                                                                                      The purchaser payment held in trust (PP) is $30,000.
3.                                                                                      The balance of the vendor payment (VP) is $35,000.
Application
To work out how the vendor payment is treated under paragraphs 65S(4)(a), (b) and (c).
Step 1                                                                                           $65,000 (OP)
                                                                                                - $30,000 (PP)
                                                                                                 $35,000 (Outstanding debt)
Step 2                                                                                           $35,000 (Outstanding debt)