Typically this DOES NOT allow monthly compounding.The government has allowed all claims to be paid with a statutory interest rate of 8% per year.
At the end of the first YEAR you would have
30 + 2.40 = 32.40 at the start on the following year.
INTEREST gain during the second year.
32.4 + 2.592 = 34.992 at the end of the second YEAR and the beginning of the third year.
The interest will only be compounded only on a YEARLY basis.