Section 42AN — Social Security (Administration) Act 1999: Reducing instalments of participation payments for mutual obligation failures

(1) This section applies if: (a) a person commits a mutual obligation failure; and (b) the Secretary makes a determination (the reduction determination) under paragraph 42AF(2)(c) that an instalment of a participation payment for an instalment period (the reduction period) is to be reduced. (2) The reduction period must be: (a) the instalment period in which the person commits the mutual obligation failure (unless paragraph (b) applies); or (b) if the Secretary determines that a later instalment period is more appropriate—that later instalment period. (3) The instalment payable to the person is reduced by an amount included in the reduction determination that is equal to: (a) half of the instalment that would otherwise have been payable for the reduction period; or (b) the whole of the instalment that would otherwise have been payable for the reduction period. Note: Paragraph (b) may have the effect of reducing the amount of the instalment to nil. However, the participation payment remains payable (see subsection (6)). (4) The Secretary must determine which of paragraph (3)(a) or (b) applies in relation to the reduction in accordance with an instrument made under subsection 42AR(1). (5) The Secretary may make the reduction determination in accordance with paragraph (3)(b) for the reduction period even if the Secretary has already made a determination for the person in accordance with paragraph (3)(a) for the same instalment period for a different mutual obligation failure. (6) The participation payment remains payable for the reduction period even if the amount of an instalment is reduced to nil in accordance with this section.