[nucleo]

Hi.
Between the 3 main systems the interest on postponed rates for a current year is calculated differently. For the example the amount of Postponed rates for the current year is $800.00.

In Pathway and (I believe) Authority no interest calculates on this amount until after the 1st instalment due date has passed. Then when the interest process is run during the year interest is calculated on the whole amount of $800.00 each time. ‘

Whereas it appears that in the Ci software interest is calculated by instalment, ie July, August = no interest, Sept, Oct, Nov interest on $200, Dec, Jan, Feb interest calculates on $400, Mar, Apr, May calculates on $600 then June calculates on $800.

I hope this all makes sense.

My question to you is:- Is there any particular way that interest is supposed to be calculated on Postponed rates — is it by instalment or on the whole amount.

I would really appreciate your feedback on this.

thank you

Glynes

[Matthew Saunders]

Hi Glynes,

I hadn’t ever put that much thought into the interest calculation on the postponed part, so now I have taken the time to look I am stumped as to what the proper way is. Of course the vague wording of the legislation is never our friend.

I have read and re-read the legislation and still are not convinced either way which is the proper way.

“Interest accrues on parts of rates postponed under this Division as if the rates were overdue rates and, for this purpose, the due DATES for payment are taken to be the respective DATES on which the parts of the rates which were payable became due.”

The only thing I can come up with that lends the postponed part being divided into four instalments for interest purposes as Tech 1 have it is that the word due dates in the legislation is a plural (which indicates to me there is more than one due date for the postponed part).

I think it may be the case that whoever developed the postponement in the different software programs got their advice from different people and therefore developed the interest charges differently, and we have all just run with the system as it is.

I have no problem with the way it is with Tech 1 with dividing the postponed part into instalments and charging interest accordingly.

We only have 6 properties with postponed rates so the impact on us to change the way we do it is minimal.

Kind regards,

Matthew.

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