Part 6Depositor compensation scheme
Entitlement to compensation: Entitlement rules
203Calculation of entitlement
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The compensation that an eligible depositor (A) referred to in section 202 is entitled to under this Part is the lesser of the following:
- the total amount of the following as at the quantification time:
- A’s protected deposits falling within section 202(1)(d)(i) and (iv); and
- A’s share of the protected deposits falling within section 202(1)(d)(ii), (iii), and (v) (see sections 204 to 206 for rules about how to determine A’s share):
- A’s protected deposits falling within section 202(1)(d)(i) and (iv); and
- $100,000 or a temporary high balance limit (if any).
A limit in subsection (1)(b) applies regardless of the number or amount of deposits.
In this section, temporary high balance limit means a limit (which is greater than $100,000) that—
- is prescribed by, or determined in accordance with, the regulations; and
- applies to A in accordance with the regulations.
Example
Bank B goes into liquidation.
A holds a deposit of $60,000 with B.
A and A’s spouse jointly hold 2 other deposits with B worth $40,000 and $50,000. A’s share of those deposits under section 204 is $45,000 (an equal share of $90,000).
The total amount under subsection (1)(a) is $105,000 ($60,000 plus $45,000).
This exceeds the $100,000 coverage limit. Therefore, A is only entitled to compensation of $100,000 on B’s liquidation.