PACMAN Chapter 14 Part 2 Division 2: Financial advances and advice

Division 2: Financial advances and advice

14.2.5    Member this Division applies to
14.2.6    Outlay advance - purpose
14.2.6A  Outlay advance — payment
14.2.6B  Outlay advance — statement
14.2.6C  Outlay advance — recovery
14.2.7    Reimbursement for financial advice before leaving Australia

14.2.5 Member this Division applies to

This Division applies to a member who has received an official written notice of posting.

14.2.6 Outlay advance – purpose

	TAX ALERT: PACMATE Annex 3.B, item 37.
	Outlay advance is a loan to help with the member’s establishment costs at a new posting location.

14.2.6A Outlay advance — payment

1.	A member may apply for an outlay advance for use at the start of a long-term posting.
2.	The member may select an advance amount up to a maximum of AUD 15,000.
3.	The member must request the amount required on the form: Payment of Outlay Advance Deed (Form No. FD071). See: Form FD071 Payment of Outlay Allowance Deed, located on the Defence Publishing Service Web Forms system
4.	When a member and their spouse or interdependent partner (who is also a member) are posted to the same location overseas, only the member on full overseas living allowance is entitled to an outlay advance. See: Chapter 15 Part 2, Overseas Living Allowance
5.	A member may claim an outlay advance for each long-term posting. The maximum amount that a member can have outstanding at any time is AUD 15,000.

14.2.6B Outlay advance — statement

	The member must provide a statement that meets all of the following requirements.
	a.	The statement must be provided within the six months after the member receives the outlay advance.
	b.	The statement must be in writing.
	c.	The statement must list all costs paid from the outlay advance.
	d.	The statement must be provided to the Overseas Administration Team.
	Note: If these requirements are not met there are fringe benefits tax implications for the member.

14.2.6C Outlay advance — recovery

1.	There are two types of outlay advance recovery.
	a.	Recovery of unspent monies. See: Subclause 2.
	b.	Recovery of the advance. See: Subclause 3.
2.	The following arrangements apply where the amount shown on a member's outlay advance statement is less than the amount of the advance.
	a.	The member must repay the whole of the difference.
	b.	Repayments under paragraph a must be made by the date six months after the member received the outlay advance.
3.	The following arrangements apply to recovery of the advance.
	a.	The member must pay back the outlay advance by the day one year after the payment was made.
	b.	Payments must start on the payday after the member receives the outlay advance.
	c.	The member must repay the advance by fortnightly instalments.
	d.	The following table shows how to calculate fortnightly repayments. Exception: After a member has made a repayment under subclause 2, repayments are calculated under paragraph e.

Step	Action
1.	Divide the amount of the outlay advance by 26.
2.	The member must repay the outcome of Step 1 each payday.

The following table shows how to calculate fortnightly repayments, if a member has made a repayment under subclause 2.

Note: This represents the principle that the outstanding advance is recovered over the rest of the 26 weeks.

Step	Action
1.	Multiply the amount of the repayment under Step 2 of the table in paragraph d by the number of payments already made.
2.	Perform the following calculation: Amount of outlay advance minus outcome of Step 1 minus amount of the repayment under subclause 2
3.	Subtract the number of payments already made under paragraph d from 26.
4.	Divide the outcome of Step 2 by the outcome of Step 3.
5.	The member must repay the outcome of Step 4.

Example: A member applies for a AUD 15,000 outlay advance. The member spends AUD 12,000. After paying 13 repayments calculated under paragraph d, the member repays AUD 3,000. The member's new repayments are calculated as follows.

Step	Action
1.	The member's former repayments were AUD 576.92 a fortnight. (AUD 15,000 divided by 26). AUD 576.92 x 13 = AUD 7,499.96
2.	AUD 15,000 - 7,499.96 - 3,000 = AUD 4,500.04
3.	26 – 13 = 13
4.	AUD 4,500.04 divided by 13 = AUD 346.16
5.	The member must repay AUD 346.16 each fortnight.

If a member has been paid an outlay advance, and the member’s posting is cancelled or ends, the member must repay any outstanding amount of the outlay advance.

The amount assessed under subclause 4 is a debt to the Commonwealth.

Authority: Part 5 of the Chief Executive Instructions, Debt management

14.2.7 Reimbursement for financial advice before leaving Australia

	TAX ALERT: PACMATE Annex 3.B, item 38.
1.	If a member consults an accredited financial adviser before departing Australia, the member is entitled to be reimbursed up to AUD 300 for the consultation.
2.	The consultation must occur between the day the official written notice of posting is issued, and the day the member departs from Australia.

PACMAN AL1 (October 2008) Chapter 14 – Part 2 Division 2 – 1