B12/1993 MARCH 1993 QUARTERLY ADVICES | Compensation and Support Reference Library, Departmental Instructions, 1993

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B12/1993 MARCH 1993 QUARTERLY ADVICES

Document

DATE OF ISSUE:  18 February 1993

MARCH 1993 QUARTERLY ADVICES

TABLE OF CONTENTS

Introduction...............................................................14

Rates...................................................................14

Target Audience...........................................................14

Inserts...................................................................15

Associated Departmental Instructions............................................16

Regulation 45A certification...................................................16

Telephone Allowance - Indexation & Quarterly Payment...............................16

Rates of TA payment..................................................16

ADP Processing...........................................................17

Timetable................................................................17

Advices..................................................................17

Holding of daily advices................................................17

Despatch of Quarterly Advices...........................................17

Reprint of Selected Advices.............................................18

Liaison with Ferntree Computer Centre (NCC)......................................18

Contact numbers...........................................................18

Advices Paragraph Contents..................................................19

Sequencing of paragraphs..............................................19

Mock up samples...........................................................19

SERVICE PENSIONER................................................19

COUPLE WITH  FBs..................................................19

TA ONLY CASES....................................................22

- WAR WIDOW OR...................................................22

SERVICE PENSIONER................................................24

COUPLE WITHOUT...................................................24

The decision-making process..................................................37

Introduction...............................................................54

Associated Departmental Instructions............................................55

Regulation 45A certification...................................................55

Pensioners For Whom An Advice Will Be Generated.................................56

Telephone Allowance - Quarterly Payment........................................56

Rent Assistance Changes....................................................57

Managed Investment Changes.................................................58

Superannuation Funds.......................................................58

Pharmaceutical Allowance Changes.............................................59

Fringe Benefit Extension.....................................................59

Advices - General..........................................................60

Timetable..........................................................60

Holding of daily advices................................................61

Despatch of Quarterly Advices...........................................61

Reprint of Selected Advices.............................................61

Liaison with Ferntree Computer Centre (NCC)................................61

Contact numbers.....................................................61

March Quarterly Advice - Mock-ups.............................................10

Introduction

As part of the 1992/93 Budget, the Government announced that a "one-off" general increase in pensions would occur with effect from 28 January 1993.  For DVA clients, payment of the increase occurred from 4 February 1993 being the first DVA pay-day following the effective date.  In addition to the "one-off'' general increase, the CPI adjustment normally due on 1 April 1993 was brought forward to pay-day 4 February 1993.

2.There will, however, be a number of events occurring for 1 April 1993:

(i)quarterly payment of telephone allowance;

(ii)indexation of rent assistance and implementation of rent assistance reforms;

(iii)implementation of managed investment changes and subsequent reassessment;

(iv)extension of exemption rules, applicable to Compulsorily Preserved Superannuation benefits, to Roll-Over and other superannuation funds until the appropriate age;

(v)extension of fringe benefits to all service pensioners; &

(vi)implementation of changes to the minimum rate of service pension, relating to pharmaceutical allowance.

3.Items (i) - (v) above will be integrated with the March Quarterly Advices mailout exercise.  The Budget changes and Advice production will be implemented on the weekend of 13-14 March 1993.  The deprived asset, Managed Investments and end period of grace (treatment at Departmental expense) end of fortnightly processing runs will be deferred to a subsequent payday

4.The major reassessment program ("BAL") will be run selectively to reasess all cases affected by any of the events mentioned in items (ii) to (vi) above.  Detailed ADP processing requirements will be sent separately to Branch System Support Officers.

Associated Departmental Instructions

5.DI B26/92 outlined general principles covering the issue of quarterly advices.  In addition, System Support Officers have been provided with copies of the rules for this processing run, entitled March 1993 Quarterly Advices System Rules and Components, which contains details of paragraph wording.

6.The Budget processing is scheduled from Thursday evening 11 March till Sunday 14 March 1993.  A processing timetable appears later in this instruction.

Regulation 45A certification

  1. The Assistant Secretary of both Benefits Planning & Management and IT Applications Branches in Central Office will attest to the correctness of the new data and the programs used to conduct the exercise.  Certificates in the terms of Finance Regulation 45A will be forwarded to the Authorising Officer in your Finance Branch.

Pensioners For Whom An Advice Will Be Generated

8.In general terms, advices will only be produced for assessments affected by one or more of the above events.  Individual advice components and service pension assessments are detailed below.  It is expected that there will be substantial overlap between some components eg. the same group of people may qualify for extension of fringe benefits, grant of TA and application of MI simplification rules.   Hence the total number of cases for the run is likely to be about 75,000 only.

ComponentsService Pension Assessments

Telephone Allowance (new TA grants)30,000

Rent Assistance30,000

MI Changes (& Super. Funds)36,000

PA changes10*

Extension Of Fringe Benefits30,000

*Manual advices only.

Telephone Allowance - Quarterly Payment

9.The first quarterly payments of Telephone Allowance (TA)  were made in July 1992.  Departmental Instruction B25/92 sets out the eligibility criteria and processing guidelines.  That instruction should be consulted as necessary, but references to processing dates should of course be ignored.  Significant dates for this exercise appear later in this instruction.

Quarterly Advice Processing

10.Telephone Allowance will be paid to eligible pensioners for pay-day 1 April 1993 in the normal way.  Pensioners eligible at 16/17 January 1993 have already received an advance notice as part of the January pension increase.  For the March Quarterly Advice only, pensioners will NOT receive a TA only advice unless they are newly eligible; that is, they became eligible after 16/17 January 1993. In addition, World War One veterans on Pharmaceutical Allowance only (no other payments) will get a TA only advice for 1 April 1993.

11.All pensioners receiving an advice because of other events (Managed Investments, Rent Assistance, Fringe Benefits extension) and who are eligible for TA will have a TA paragraph inserted (irrespective of whether they were newly eligible or not).

12.Service pensioners who are assessed under a manual method of assessment (eg. War Widow with service pension, Hardship etc.) and are eligible for TA will not have a 'TA only' advice generated on this occasion.  Branch Office staff will need to advise clients of any pension variations they have  actioned manually, and add a 'TA' paragraph.  The range of paragraphs and the circumstances under which these will be applied, and the paragraph wording, are shown in March 1993 Quarterly Advices System Rules & Components.

Note:The paragraphs referring to the Telephone Allowance will not appear in the advice output to clients resident overseas.

Rates Of Telephone Allowance

13.Three rates of TA are payable; the World War 1 rate, the Base rate and half the Base rate.  The three rates of TA payment  are the same as for the 7 January 1993 payday, namely:

.The World War 1 rate is $165 pa ($41.30 per quarter);

.The Base Rate is $52.80 pa ($13.20 per quarter);

.The Half Base Rate is $26.40 pa ($6.60 per quarter).

14.The quarterly TA payment amount will be shown on a person's payment advice, in the paragraph  immediately following the payment details box.

15.Pension reassessment processing precedes TA processing, so extension of fringe benefits will enable TA to be payable to all eligible service pensioners.  This means that TA rates will reflect post fringe benefits extension processing.

Rent Assistance Changes

16.In the 1992-93 Budget, the Government announced changes to rent assistance eligibility which apply to all pensioners in receipt of rent assistance.

17.The single rent threshold has been replaced with four new thresholds which are dependant on family circumstances.  These thresholds will be indexed twice yearly.  The rate of assistance has  been increased, from 50 cents to 75 cents in the dollar, to provide higher levels of assistance at lower levels of rent paid.  The maximum amount payable to single pensioners without children has also increased.  A savings provision has also been introduced to protect existing Rent Assistance recipients from suffering a reduction in their payment.  More detailed information regarding the changes to rent assistance eligibility/payability will be available shortly in a separate Departmental Instruction.

Quarterly Advice Processing

18.A quarterly advice, containing the relevant rent assistance paragraphs, will be produced for all service pensioners in receipt of rent assistance.  The range of paragraphs, the circumstances under which these will be applied and the paragraph wording are shown in March 1993 Quarterly Advices System Rules & Components.  A 'mock-up' sample advice is at Attachment A.

19.After the RA re-assessment run is done, the Advices program will be able to identify all RA recipients, and to distinguish between:

a)those whose RA has been saved at the current rate;

b)those whose RA has been increased;

c)those whose RA rate is unchanged but not saved;

d)those whose RA rate has reduced as a result of some other Budget initiative (ie. Managed Investment changes or CPSB superannuation).

Client Impact

20.As at 7 November 1992, there were 30,019 service pensioners in receipt of rent assistance.  It is estimated that approximately 13,000 single pensioners paying private rent of more than $80.00 pf will receive increases in rent assistance of up to $17.00 pf.  Up to 15,000 service pensioners, mainly married couples, will have their assistance maintained ("saved") at their current rate.

Managed Investment Changes

21.In the 1992/93 Budget, the Government announced changes to the way in which managed investments are assessed for service pension purposes.  The changes take effect from 1 April 1993.  More detailed information regarding the changes to Managed Investments will be available shortly in a separate Departmental Instruction.

Quarterly Advice Processing & Client Impact

22.All clients with managed investment products of any kind recorded on the PIPS MI screen will receive an advice.  The wording of the advice paragraph is shown in March 1993 Quarterly Advices System Rules & Components.  A 'mock-up' sample advice is at Attachment A.

Superannuation Funds

23.The rules applying to Compulsorily Preserved Superannuation Benefits (CPSB) are to be extended to other superannuation funds from 1 April 1993.

24.As part of the 1992 Budget the Government announced that the income/asset exemption rules applying to CPSBs would be extended to roll-over funds such as deferred annuities (DAs), approved deposit funds (ADFs) and other superannuation funds.  The new rules do not apply to immediate annuities and superannuation pensions.

25.More detailed information regarding the changes to the treatment of superannuation funds will be available shortly in a separate Departmental Instruction.

Quarterly Advice Processing

26.Quarterly Advices in respect of superannuation funds will be produced for all service pensioners, including maximum rate cases, who are under the appropriate age and who hold investments in approved deposit funds, deferred annuities or partially preserved superannuation funds.  A preserved superannuation "reason for variation" paragraph will be included in every advice where roll-over or other superannuation funds recorded on the Managed Investments facility have been modified as a result of the new Budget rules.  There will be a "Y" indicator in a new "preserved" field to distinguish these cases.

27.The wording of the advice paragraph is shown in March 1993 Quarterly Advices System Rules & Components.  A 'mock-up' sample advice is at Attachment A.

Pharmaceutical Allowance Changes

28.Cases with a service pension rate change because of the Pharmaceutical Allowance (PA) related changes to the minimum rate of service pension will not have a special paragraph referring to this, nor will an advice letter be produced solely because of such variation.  Therefore, if an advice is generated solely by a rate variation due to the changes in the SP order of reduction ('PA the DSS way' ), there will be no 'reason for variation' paragraph.  All such cases will be listed for manual action by Branches regardless of whether an advice is produced as a result of other action(s).  The number of cases will be very small (less than 10 expected).

Fringe Benefit Extension

29.Fringe benefits are to be extended to all service pensioners currently not in receipt of fringe benefits.  The current fringe benefits income and assets tests - renamed to "treatment benefits income and assets tests" - will still continue to apply to eligibility for treatment at Departmental expense.

30.More detailed information regarding the changes to Fringe Benefit extension will be available shortly in a separate Departmental Instruction.

Quarterly Advice Processing - Extension Of Fringe Benefits

31.A paragraph explaining fringe benefit extension will be included in the advices for all service pensioners currently not on fringe benefits.  The wording of the advice paragraph is shown in March 1993 Quarterly Advices System Rules & Components.  A 'mock-up' sample advice is at Attachment A.

Note 1):The paragraph referring to the extension of fringe benefits will not  appear in the advice output for clients resident overseas (including clients resident in Papua New Guinea).

Note 2):A separate fringe benefits card mailout will also take place in March.  Detailed information on the card mailout will be available shortly in a separate Departmental Instruction.

Quarterly Advice Processing - Treatment At Departmental Expense

32.Where income and/or asset reassessment (eg. MI's) results in loss or gain of treatment eligibility, the quarterly advices for these cases will be separated from the normal output.  The Quarterly Advice program will, after re-assessment processing, detect people:

.gaining treatment at Departmental expense;

.losing treatment at Departmental expense; &

.commencing a period of grace*.

33.These cases will have their advice letters printed at NCC Ferntree and despatched (with a schedule) to Branch Offices.  Branches will then need to examine each case and send a proforma letter to clients to explain their loss, gain or deferred loss of treatment eligibility.   Advice to clients by Branch staff will therefore be in addition to the quarterly advice already despatched.

*Note:  Cases on a period of grace prior to the March processing runs, and remaining in period of grace status post Budget processing , will not be selected by the program.  (These cases have already received advice about deferred loss of benefits via the daily advices system.)

Advices - General

ADP Processing

34.Detailed information regarding ADP Processing has been issued to State Systems Support Officers in a separate memorandum.  The Systems Support Officers will be issuing a local processing timetable and should be consulted on any matter concerning ADP Processing.

Timetable

35.Key timeframes are summarised below. The processing runs will begin on the evening of  Thursday 11 March or the next day.

DateEvent

Thurs 11 Mar 1993Cutoff for payperiod 19 (18 Mar),

one day earlier than usual.

Thurs 11 Mar (pm)BAL re-assessment run.

Sun. 14 MarQuarterly Advices processing runs.

Mon. 15 MarDaily advices produced from today to be held

till Quarterly advices despatched.

Mon. 15 Mar to cut-off for pay 20Examiner action on manual schedules for SP.

&

Quarterly Advices progressively lodged with Australia Post from 15 Mar to 26 Mar.

Holding of daily advices

36.Daily payment advices, produced for pay period 20 (1 April 1993), should be held by Branch Offices until confirmation is received from the Quarterly Advices Project Manager in Central Office to release such advices. This will ensure that pensioners who have pension variations processed for payday 1 April will receive their daily advice after the quarterly advice rather than in advance of it.

Despatch of Quarterly Advices

37.The quarterly advices will be progressively lodged with Australia Post by the mailing house in Canberra, during the period 15 March to 26 March.  As soon as each State's advices have been lodged, the CO Project Manager will advise your Branch's contact officer.

Reprint of Selected Advices

38.Any requests for reprints of individual Quarterly Advices should be referred through Branch Office System Support Officers to the Benefits Application Help Desk on (06) 289 6216.

Liaison with Ferntree Computer Centre (NCC)

39.The Veterans Services Applications Branch will provide NCC with a schedule of computer runs for this exercise.  Benefits SM&S Section will supply an after hours contact number closer to the processing date.

Contact numbers

40.Any enquiries should be directed in the first instance to John Ramsay in Policy Development & Implementation Section, on (06) 289 6409 or Tony Whelan on (06) 2896684.  Facsimile messages should be sent to (06)289 6553.

Kay Grimsley

Assistant Secretary Income Support

SERVICE PENSIONER COUPLE

GAINING EXTENDEDFBs & TA

eligibility recorded; WITH MI'S ,&

CPSB Super.

BRANCH OFFICE

Centennial Plaza

280 Elizabeth Street

Sydney NSW 2000

Postal Address:

JOHN B SMITHGPO Box 3994, Sydney NSW 2001

SARAH SMITH

1029 ANZAC AVENUETelephone:

HOMEBUSH BAY 2140Metropolitan residents: 213 7777

Country residents: 008 257251

15 March 1993

YOUR FILE NUMBER IS NX543210

Dear Mr and Mrs SMITH

New provisions for roll-over and other superannuation funds

Monies you have in an Approved Deposit Fund, Deferred Annuity or other superannuation type fund will be disregarded under the income and assets tests from now until you reach the appropriate age (i.e. for veteran service pensioners, 55 years for females and 60 years for males; for all other service pensioners, 60 years for females and 65 years for males.).  This is an extension of exemption rules that previously only applied to Compulsorily Preserved Superannuation Funds.

Managed Investments

In the 1992/93 Budget, the Government announced changes to the way in which managed investments are assessed for pension purposes. The changes take effect from 1 April 1993 and are explained separately later in this letter.

Payment details

The amount of pension you receive each fortnight is set out below. Payment at this rate will be made on 1 April 1993.

PAYMENTS TO JOHN SMITH and SARAH SMITH

Service pension100.00100.00

Rent Assistance20.0020.00

Pharmaceutical Allowanc    2.60      2.60

TOTAL FORTNIGHTLY PAYMENT$122.60$122.60

Telephone Allowance payment

Your quarterly Telephone Allowance of $6.60 each will be paid to you on 1 April 1993, in addition to that fortnight's pension payment. You must tell us if you cease to be a telephone subscriber.

Extension of Fringe Benefits

As part of the 1992/93 Budget, the Government announced that the income and assets tests for Fringe Benefits would be abolished from 1 April 1993. Therefore, you are now eligible for fringe benefits. Your new concession card/s and an information sheet telling you about fringe benefits are being sent separately.

Changes to Managed InvestmentsCurrently, all managed investments are categorised as either "market linked investments" or "accruing return investments".  Different income test assessment rules apply depending on which category the investment fits.In the 1992/93 Budget, the Government announced changes to the way in which managed investments are assessed for pension purposes.  The changes take effect from 1 April 1993 and are as follows:

.Managed investments will no longer be categorised into "market linked investments" and "accruing return investments" (unless they were purchased prior to 9/9/88 or 1/1/88, respectively).

.The 11% rate of return ceiling used for calculating "market linked investment" income has been abolished.  Income will now be calculated for all managed investments by multiplying the investment's current asset value by its rate of return.  The "rate of return" - negative or positive - is calculated on the basis of the investment's performance over the immediately preceding 12 months.

.Any negative rates of return will be allowed to be offset against any ongoing income held against other managed investments.

.Exit fees incurred in realising a managed investment can be deducted from income received from that investment for a period of 12 months after the realisation occurred.  This is in addition to the deduction currently allowed for entry fees when making an investment.  Please note:

None of the changes described above apply to any "market linked investments" purchased prior to 9/9/88, friendly society bonds purchased prior to 1/1/88, or "accruing return investments" purchased prior to 1/1/88 that did not allow partial withdrawals to be made.  Income for these investments will continue to be assessed on realisation.

For service pension purposes, a managed investment is "realised" if it matures, or if it is sold, surrendered, transferred, gifted, or fully or partially withdrawn.

The income and asset details now recorded for all your managed investments are shown in the table below.

Managed Investments

Managed InvestmentUnitsAssetValueRate ofFeeIncome Per

ValueReturn/DeductionFortnight

CentsPer(Less Fee

Per UnitFortnightDeduction)

.NORWICH UNION LIFE N/A$12,286.845.500%              $23.08              $2.91

-V- INVEST BOND - CAPITAL

GUARANTEED FUND

.AMP SOCIETY - N - 8,57720,276.020.00%$38.46              $0.00

INVEST LINK DA ULK/ULKN

- A UNITS

.BT FINANCIAL SERVICES8,583$26,392.72              1.110c              N/A              $366.42

- N - LUMP SUM ADF -

INVESTMENT UNITS

.ROTHSCHILD AUSTRALIA 4,000$11,200.00              7.670%              $19.23              $28.85

ASSET MANAGEMENT - V -

FIVE ARROWS TRUST -

AUSTRALIAN EQUITY

.BAIN MANAGEMENT LTD N/A$3,467.47              8.150%              N/A              $10.86

- N - INVEST MGT BIMS

TRUSTS-INTL EQUITIES

.NORWICH UNION LIFE 224.41$11,251.925.114%              $7.69              $35.46

- V - INVEST BOND

GUARANTEED CASH FUND

.ANZ LIFE ASSURANCE N/A$31,477.999.030cN/A              $109.32

CO LTD - N - CAPITAL

GUARANTEED ROLLOVER

BOND

Your right of review

If you do not agree with a decision affecting your rate of service pension, you may apply to have it reviewed by a delegate of the Repatriation Commission.  The Delegate may decide the original decision was correct, or may decide to change it.  If the decision is changed, your pension may be increased or reduced.

Any request for a review must be made in writing within three months of the day you receive this letter.  Your letter should state the specific grounds for your request for review.

Your obligations to the Department

Your obligations have been explained to you in previous advices. These obligations still apply, but the relevant income and asset levels may have changed; these are shown below.

You must tell the Department within 21 days if your combined income (excluding DVA pension) rises above $797 a fortnight. You must also tell us if the value of your assets rises above $240,000.

You can do this by telephoning or writing to us or by visiting any Department of Veterans' Affairs office. The address and telephone number is shown at the top of this letter.  If you telephone, we may ask you to confirm information in writing or to send us certain documents which are related to the matter.

If you do not tell us of these changes you may be overpaid. There are penalties that apply for failing to fulfil your obligations or for providing false or misleading information. The authority for this obligation is under Section 54 of the Veterans' Entitlements Act.  Please remember that obligations previously advised to you continue to apply.

Changes you have already told us about

If you have told us recently about a change to your income and assets or your domestic situation, it may not have been included when sending this letter.  If this is the case, we will be sending you another letter as soon as the change has been put into place.

If you have any questions about any of the above matters, please contact this office at the address or telephone number shown at the top of this letter.

Yours sincerely,

G K Stonehouse

Deputy Commissioner as

Delegate of the Secretary

SERVICE PENSIONER COUPLE

with Rent Assistance (saved), and TA.

BRANCH OFFICE

Centennial Plaza

280 Elizabeth Street

Sydney NSW 2000

Postal Address:

JOHN B O'REILLYGPO Box 3994, Sydney NSW 2001

SARAH O'REILLY

20 FAIRLY CRESCENTTelephone:

BOTANY BAY 2940Metropolitan residents: 213 7777

Country residents: 008 257251

15 March 1993

YOUR FILE NUMBER IS NX555550

Dear Mr and Mrs O'Reilly

Rent Assistance

In the 1992-93 Budget, the Government announced changes to rent assistance. The changes take effect from 1 April 1993 and are explained separately in this letter.

Under these changes, your rent assistance would have been reduced. However, the Government decided that your rent assistance should be maintained at the current rate. You will continue to receive your current rate of rent assistance until your rental circumstances change.

Payment details

The amount of pension you receive each fortnight is set out below. Payment at this rate will be made on 1 April 1993.

PAYMENTS TO JOHN O'REILLY and SARAH O'REILLY

Service pension200.00   200.00

Rent Assistance31.50     31.50

Pharmaceutical Allowance       2.60       2.60

TOTAL FORTNIGHTLY PAYMENT$234.10$234.10

Telephone Allowance quarterly payment

Your quarterly Telephone Allowance of $6.60 each will be paid to you on 1 April 1993, in addition to that fortnight's pension payment. You must tell us if you cease to be a telephone subscriber.

CHANGES TO RENT ASSISTANCE

Rent Threshold    The rent threshold is the minimum amount of rent you must pay before you can receive any rent assistance.  The previous threshold of $50 for all pensioners has been replaced with four new thresholds.

$60for a single pensioner without children

$80for a single pensioner with dependent children

$100for a veteran and a partner without dependent children

$120for a veteran and a partner with dependent children

These thresholds will be indexed in line with the consumer price index (CPI) every six months commencing September 1993.

Rate Of Assistance    Previously rent assistance was paid at a rate of 50 cents in the dollar for each dollar of rent paid above the rent threshold, up to the maximum rent assistance payable.  Under the new rules, the Government will pay you rent assistance at a rate of 75 cents in the dollar for each dollar of rent you pay above the rent threshold, up to the maximum rent assistance payable.

Maximum Rent Assistance    The maximum rent assistance payable to single pensioners without children has increased by an additional $4.00 over and above the indexation increase.

Your obligations to the Department

Your obligations have been explained to you in previous advices. These obligations still apply, but the relevant income and asset levels may have changed; these are shown below.

You must tell the Department within 21 days if your combined income (excluding DVA pension) rises above $497 a fortnight. You must also tell us if the value of your assets rises above $240,000.

You can do this by telephoning or writing to us or by visiting any Department of Veterans' Affairs office. The address and telephone number is shown at the top of this letter.  If you telephone, we may ask you to confirm information in writing or to send us certain documents which are related to the matter.

If you do not tell us of these changes you may be overpaid. There are penalties that apply for failing to fulfil your obligations or for providing false or misleading information. The authority for this obligation is under Section 54 of the Veterans' Entitlements Act.

Changes you have already told us about

If you have told us recently about a change to your income and assets or your domestic situation, it may not have been included when sending this letter.  If this is the case, we will be sending you another letter as soon as the change has been put into place.

If you have any questions about any of the above matters, please contact this office at the address or telephone number shown at the top of this letter.

Yours sincerely,

G K Stonehouse

Deputy Commissioner as

Delegate of the Secretary