6Circumstances where a person’s participation payment is to be reduced (and by how much) or cancelled

6 Circumstances where a person’s participation payment is to be reduced (and by how much) or cancelled

Reduction of payment by half the instalment (1) If: (a) the Secretary determines under paragraph 42AF(2)(c) of the Act that an instalment of a person’s participation payment for an instalment period is to be reduced; and (b) the Secretary is satisfied that the circumstances set out in paragraph 5(1)(a) or (b) of this instrument apply to the person; then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(a) of the Act applies in relation to the reduction. Reduction of payment by the whole instalment (2) Despite subsection (1), if: (a) the Secretary determines under paragraph 42AF(2)(c) of the Act that an instalment of the person’s participation payment for an instalment period (the relevant instalment period) is to be reduced; and (b) in the 3 active months prior to the relevant failure: (i) the Secretary has previously determined under paragraph 42AF(2)(c) of the Act that an instalment of the person’s participation payment for an instalment period (whether for the relevant instalment period or another instalment period) is to be reduced by the amount specified in paragraph 42AN(3)(a) of the Act; and (ii) that previous determination was the last determination made under paragraph 42AF(2)(c) of the Act in relation to the person before the determination referred to in paragraph (a); then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(b) of the Act applies in relation to the reduction referred to in paragraph (a). First relevant failure after cancellation – reduction of payment by half the instalment (4) Despite subsection (2), if: (a) the person previously received a participation payment; and (b) that payment was cancelled under paragraph 42AF(2)(d) of the Act; and (c) the relevant failure is the first mutual obligation failure where the person does not have a reasonable excuse in the 3 active months since that cancellation; then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(a) of the Act applies in relation to the reduction referred to in paragraph (2)(a) of this instrument.