MLR1PP15080 - Type 1 penalties (compliance breaches): Visual representation of the penalty abatement procedure

The chart below shows the process for calculating the final penalty, based upon the starting penalty, which will be either 25% of funds at risk or a scale charge, dependent upon the sector/s the business is within. The final penalty value to be paid will be subject to a 25% reduction if it is paid within 30 days of the penalty notice being issued.

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Scale charge penalties will be liable for a penalty cap of 25% gross profit in the preceding 12 month period, which will normally be the accounting period. It is important to note that this is normally the total gross profit from all business activity; including non regulated activities.