C09/2012 June 2012 Statutory Increase Processing - Production and Mailout of Advice Letters with Payment Summaries, Standalone Payment Summaries (Issued without a Covering Letter) and Medicare Levy Exemption Certificates | Compensation and Support Reference Library, Departmental Instructions, 2012

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C09/2012 June 2012 Statutory Increase Processing - Production and Mailout of Advice Letters with Payment Summaries, Standalone Payment Summaries (Issued without a Covering Letter) and Medicare Levy Exemption Certificates

Document

DATE OF ISSUE:  15 June 2012

June 2012 Statutory Increase Processing – Production and Mailout of Advice Letters with Payment Summaries, Standalone Payment Summaries (Issued without a Covering Letter) and Medicare Levy Exemption Certificates

Amends DI No.

N/A

Replaces DI No.

N/A

Purpose of Instruction

This Departmental Instruction is to provide information about the processing arrangements for the June 2012 Statutory Increase (SI) processing of advice letters with payment summaries, Standalone Payment Summaries (issued without a covering letter), and Medicare Levy Exemption Certificate production and mailout.

Peta Stevenson

Assistant Secretary

Income Support and Grants Branch

14 June 2012

Overview

Introduction

In June each year the Department undertakes a bulk exercise to issue all pensioner households with advice letters to persons in receipt of service pension, age pension including those in payment of Defence Force Income Support Allowance (DFISA) only, or income support supplement.  The majority of these letters will include Payment Summaries for the end of the financial year.

Standalone Payment Summaries (issued without a covering letter) and Medicare Levy Exemption Certificates will also be issued at this time.

The estimated number of mailpacks is given at Attachment A.

Major features of SI

Issues of significance with regard to this mailout are as follows:

  • Production of advice letters about rate changes to all service pensioners, income support supplement recipients and age pensioners including those being paid DFISA only;
  • Adjustment of pension rates in accordance with adjustments to the Income Free Area, Assets Free Area and Deeming Thresholds;
  • A full Income and Assets Attachment will be provided for all less than maximum rate pensioners;
  • Full obligations will be provided for all pensioners being paid at less than the maximum rate of pension;
  • No Income and Assets Attachment will be provided to pensioners who are receiving the maximum rate of pension;
  • Maximum rate pensioners will not be given a full list of their obligations.  Instead a Financial Obligations paragraph that includes the prescribed rates will be included in the body of the advice;
  • The Australian Taxation Office (ATO) insert – 'Do you need to lodge a tax return?' will only be issued to clients being paid at less than the maximum rate of income support pension, and to those receiving a Standalone Payment Summary (SAPS) (without a covering letter) or a Medicare Levy Exemption Certificate (MLEC);
  • Following consultation with the ATO, from this year all clients who received a payment from DVA during the 2011-2012 financial year will be sent a payment summary listing both taxable and tax exempt (i.e. non-taxable) payments;
  • SAPS, i.e. payment summaries sent without a covering letter, will be issued to clients who received some taxable payment during the financial year but do not receive an advice letter, e.g. Centrelink DFISA clients or clients no longer in payment of income support pension;
  • Production of MLEC; and
  • Advice to pensioners of any gain or loss of treatment eligibility.

Production of Advice Letters

Processing Weekend –
15/06/2012 –
17/06/2012

Processing is scheduled to run from Friday evening, 15 June 2012 to Sunday, 17 June 2012.

Any pension variations resulting from this exercise will be effective from 1 July 2012 for payday 12 July 2012.

Critical Dates

Processing period within DVA – (includes 'advices' processing)

Friday (pm) 15 June 2012 – Sunday (pm) 17 June 2012

Commencement of mailout production for advice letters with payment summaries, SAPS and MLECs

Tuesday, 18 June 2012

Progressive lodgment of all Advice Letters, SAPS and MLECs with Australia Post

Commencing from Monday, 25 June 2012 and completed by COB Friday, 29 June 2012

Letter Production

Computershare, located in Ermington, New South Wales, will print the advice letters, SAPS and MLECs, insert the ATO flyers where applicable, envelope and lodge all mail with Australia Post.

Lodgment of Letters

Letters will be progressively lodged with Australia Post commencing Monday, 25 June 2012.  All letters are to be posted by COB Friday, 29 June 2012.

Letter Content

Letters and Attachments

Prior to the issue of this Departmental Instruction, comments were sought from staff regarding the advice content and paragraph sequencing.

Feedback was received from two staff requesting modifications in the wording for the "Gold Card Information" in the General Information Sheet (GIS) and the wording on the MLEC.  Amendment has been made accordingly.

Copies of the expected advice letter content for this run are reproduced at Attachment B and a sample of the Medicare Levy Exemption Certificate is reproduced at Attachment C.

Single and Joint Advices

All service pensioners and income support supplement recipient couples will receive a joint advice, provided both members of a couple, including the illness separated, have the same IMS postal address recorded.

Age pensioners receive single advice letters.

Important to note:  Staff are reminded that if a client in a joint assessment requests separate or single advices, they need to update this information using the mainframe PRODIMS – Client Correspondence (CO.CO) Screen prior to the processing run to initiate the client request.

Advice default requests in CO.CO will override the DOCGEN advice rules.

Full Obligations & Full Income and Assets WILL be issued

Full Obligations and Full Income and Assets will be issued to SP/ISS/AP recipients receiving pension at less than the maximum rate.

This is in line with the Repatriation Commission policy that:

  • pensioners receiving pension at less than the maximum rate be provided with their Full Obligations and Full Income and Assets every two years – Full Obligations and Full Income and Assets were last issued to this group in June 2010; and
  • pensioners receiving the maximum rate of pension are required to be provided with their Full Obligations at a minimum interval of once every five years – Full Obligations were last issued to this client group in June 2008, with the date of next issue expected to be June 2013.  Full Income and Assets are not required to be issued to this client group.
  •  
Financial Obligations including Prescribed Rates

The Financial Obligations paragraph (which includes prescribed rates information) will be present in the advices for all SP/ISS/AP pensioners, except service pensioners and income support supplement recipients who are reduced to nil.  Age pensioners who are reduced to nil but eligible for payment of DFISA will receive the Financial Obligations paragraph including the prescribed rates.

Payment Information Attachment

SP/ISS/AP pensioners who remain on maximum rate following the processing will not have a Payment Information Attachment printed as part of their advice as they are considered to be continuation cases.

SP/ISS/AP pensioners whose pension rates have varied following the processing will receive a Payment Information Attachment.

Tasmanian Office Clients with Overseas Postal Address

Advice letters for Tasmanian Office clients with an overseas postal address will have their advices printed and posted directly from the Mailing House.

Non Taxable Pensioners

Those pensioners whose pensions are not taxable (eg. those in payment of invalidity service pension and who are under 65 years of age for male clients, 64.5 years for female clients) will receive an advice letter with a payment summary.  As the number of Medicare Levy exemption days will be recorded on the payment summary, a separate MLEC will no longer be required.

PAYG Payment Summary -individual Non Business
Service Pension
Age Pension
DFISA or
Income Support Supplement

Following consultation with the ATO, from this year all clients who received a payment from DVA during the 2011/2012 financial year will be sent a payment summary listing both taxable and tax exempt (i.e. non-taxable) payments.  The tax exempt payment information will be broken into the following categories:

  • Tax-free pensions and benefits including tax exempt disability pension, war widow/widower pension, service pension and income support supplement; and
  • Other tax exempt payments.

Payment summaries will form part of the advice letter for all income support payment recipients.  Where a payment summary is sent without a covering letter, it is referred to as a SAPS.

A sample of the revised payment summary can be found at Attachment C.

General Information Sheet (GIS)

Each advice letter, except those for overseas pensioners, will have a General Information Sheet (GIS).  The GIS provides details of payment rates, income and asset thresholds, deeming rates and thresholds, treatment thresholds, rent assistance rates and other payment information.  There will be a separate GIS for clients assessed under the transitional rules and for those assessed under the non-transitional rules because different rates and thresholds apply.

Some components of the pension supplement (pension supplement non-taxable and pension supplement flexible) are not payable to overseas pensioners.  Therefore, the information provided on the GIS is not applicable to them.  For this reason, overseas pensioners will not be issued with the GIS to avoid confusion.

ATO insert – Do you need to lodge a tax return?'

A 'pensioner flyer' produced by the ATO titled “Do you need to lodge a tax return?” will only be included in the advice letters produced for those in payment of less than the maximum rate of income support pension, those being issued a MLEC or a SAPS.

The flyer will not be sent to those clients being paid at the maximum rate of income support pension.

Each location will be supplied with a quantity of the flyers to insert with their Enclosures (treatment changes) or Reduction to Nil advice letters which will print at each location's nominated printer.

Pensioners to Contact ATO with Taxation Questions

It is important for DVA staff to note that pensioners have been advised in their letters to contact the Australian Taxation Office on 13 28 61 if they have any questions about taxation.  Should pensioners ring DVA offices with questions relating to taxation matters, staff should refer them to the Australian Taxation Office on 13 28 61.

IMPORTANT NOTE:  DVA staff must not offer advice about taxation liability or the need to lodge a tax return.

Information on Tax Thresholds in VIEW

The 'Senior Australians Tax Offset' and 'Pensioner Tax Offset' amounts are displayed in the 'Tax Thresholds Amounts' folder in the 'Fin Year Certificate' tab in VIEW.  The 2011/2012 threshold amounts will be available in VIEW from 1 July 2012.  Additional information about these thresholds is provided via VIEW Online Help.

Standalone Payment Summaries (issued without a covering letter)

SAPS – sent without a covering letter

SAPS will be produced for the following categories:

  • Persons issued with an Education Allowance;
  • Working Rule B Widows;
  • Pensioners who received income support payment for part of the financial year and are no longer in payment of an income support pension;
  • Disability pensioners and war widows/widowers who do not receive any income support payments;
  • Overseas addressees (for clients who were in payment for part of the year but are no longer in payment); and
  • Centrelink clients in payment of DFISA.

SAPS – posted directly to clients from the Mailing House

All SAPS, with the exception for overseas addressees listed above, are to be printed and enveloped at the mailing house, and lodged with Australia Post directly from the mailing house.

In June 2011, DVA issued 15,924 SAPS.  (It is estimated that DVA will issue 89,684 SAPS in 2012.  This follows consultation with the Australian Taxation Office (ATO), that from this year all clients who received a payment from DVA during the 2011-2012 financial year will be sent a payment summary listing both taxable and tax exempt (i.e. non-taxable) payments.)

SAPS - Overseas Addressees

SAPS for clients who reside overseas and who are no longer in payment will not be printed at the mailing house.  A zip file of each SAPS category will be emailed to each location contact officer.  It lists the clients who reside overseas who are to receive a SAPS.  Staff should request a re-print for those overseas clients listed on the report and send their SAPS directly to them.

SAPS - Unknown Addressees

Where a client has an 'unknown address' recorded, a SAPS will not be produced.  A listing of clients with an 'unknown address' will be provided to each location.

SAPS - For Deceased Clients

SAPS for clients who have died during the financial year will not be printed at the mailing house.  Staff will be able to request a re-print of a deceased client's payment summary when required from 1 July 2012.

SAPS Reports

A SAPS report is generated for each of the following categories:

MRCA Education Allowance;

Education Allowance;

Other;

Group Destination;

Overseas;

Unknown Address; and

Deceased.

A report file for each category will be emailed in a zip file to the contact officer in each location.

Return Address if not Delivered

All SAPS sent from the mailing house will be enveloped in a single window-faced envelope with a return address of GPO Box 9998 in your Capital City.

Payment Summary Reprint Facility - VIEW Advices Tab

From 1 July 2012, payment summaries for the 2011-2012 financial year may be re-generated using the 'Payment Summary Reprint' facility located under the Advices Tab in VIEW.

Payment Summary Template

The June SI Income Support contact officers will be provided with a 2011-2012 Payment Summary Template.

Medicare Levy Exemption Certificates

Medicare Levy Exemption Certificates
(MLEC)

A MLEC will be issued to those Gold Card beneficiaries who are not in receipt of an income support payment and who do not receive an advice letter, that is:

  • Australian veterans with Qualifying Service and over 70 years of age who are not in receipt of any payment from DVA.

The number of Medicare Levy exemption days, where applicable, will be stated on the payment summary for all other pensioners.

A sample of the Medicare Levy Exemption Certificate to be issued in 2012 can be found at Attachment C.

Medicare levy exemption – For Blind Pensioners

Blind pensioners in receipt of an income support payment are eligible for full or half Medicare Levy exemption. The number of eligible exemption days will be printed on their Payment Summaries.

Zip File of MLEC Reports

A report of all clients who receive a MLEC will be produced and emailed in a zip file to the nominated contact officer.

A MLEC will not be produced where a client has an 'unknown address' recorded.  However, a report will be produced and emailed in a zip file to all contact officers, listing those clients who are eligible to receive a MLEC but have an unknown address recorded.

MLEC Template

The June SI location contact officers will be provided with a MLEC Word template for manual re-issuing of MLECs if required.

Issues Requiring Staff Action

ZIP Files of Advice Schedule Reports

A Zip File listing details of all clients who receive an advice will be emailed to the nominated contact officer in each location during the week following the processing run.  The Zip File replaces the Advices Schedule Report, which is too large to print on printers.

Enclosure (Treatment change) Advice Letters

Following the June SI processing, the Enclosure (treatment change) letters will be printed at the nominated printer at each location.

It is requested that the streamed advice letters be checked for accuracy, and reconciled against the reports received in each location to ensure they reflect the correct treatment paragraphs.

If any advice with incorrect treatment information is found, please consult with the Income Support System Support Officers to ensure correct information is provided in the manual replacement advice.

Reduction to Nil Letters

Following the June SI processing, any Reduction to Nil advice letters will be printed at the nominated printer at each location.  Staff are required to include a Commonwealth Seniors Health Card (CSHC) claim form, a CSHC fact sheet and a reply paid envelope.

'HELD' Advices to be Forced

As part of the Batch processing run all advices in 'Held' status will be forced to print.  Forced 'held' advices will print at the nominated printer in each respective location as part of the production run.  All forced advices will need to be checked to ensure the content of the advices is correct prior to posting to clients.

Handling of Daily Advices

Cases processed prior to the SI run should have the daily advice dispatched prior to the June advice letter being sent.

Daily advices processed after the cutoff date of 15 June 2012 should be held by staff in each location until confirmation is received from the June SI Business Co-ordinator to release such advices.  This will ensure that pensioners receive their advices in chronological order.

Reprints of June SI Advices via VIEW Advices Tab

Reprints of individual advice letters produced from the quarterly processing can be requested via VIEW – Advices Tab reprint facility.  Quarterly advice reprints are available and can be requested from day one of the next quarter ie. March quarterly advices from 01/04/yyyy, June quarterly advices from 01/07/yyyy and September quarterly advices from 01/10/yyyy.

Staff Requests for Reprints of Daily Advices – Pre-SI Processing

The 'Reprint' scheduled jobs which produce the requested reprints of daily advices by staff are postponed as part of the SI processing.  Any requests for an advice reprint on the day of the commencement of the SI processing will not be actioned until after the SI run when the next 'Reprint' job is submitted.  'Unprinted' advice reprint requests will then print when the next 'Reprint' job is submitted.

DVA Income Support Contact Officers

DVA – Income Support Contact Officers

A contact person from each location acts as a liaison point for the Advices Team, and to assist with handling of streamed advices printed at each nominated location printers.

The Income Support (IS) Contacts for the June 2012 quarterly processing exercise are as follows:

NSWGenia Sacharczuk

VICArthur Morihovitis

QLDStephen Hamill

SAMaria Nasilowski

WAMichelle Pauly

TASBryon Kelly

Cards & Advices Team Contacts

Feedback from Staff

Any concerns regarding letters produced as part of this run should be directed to the June SI Project Officer Elis Lam on 02 9213 7244.  Please ensure that any problems are reported without delay.

Contact Details

Any queries regarding advice wording, mail house printing and letter lodgment should be referred to:

Elis Lam

(02) 9213 7244 or extension 27244


ATTACHMENT A

HOUSEHOLDS TO RECEIVE JUNE SI ADVICES, PAYMENT SUMMARIES AND MEDICARE LEVY EXEMPTION CERTIFICATES

BASED ON ESTIMATED 2012 FIGURES

STATE

JOB 1 –LMAX

JOB 2 –MAX

JOB 3 –OS

Total no of letters (Job 1, 2 & 3)

JOB 4 – SAPS

JOB 5 –

MLEC

NSW

17,598

43,667

-

    61,265

   30,166

     517

VIC

12,226

27,911

-

    40,137

   17,635

     352

QLD

14,029

27,873

-

    41,902

   23,975

     199

SA

5,371

12,026

-

17,397

6,525

  97

WA

6,098

10,974

-

17,072

8,453

143

TAS

2,023

4,395

789

7,207

2,930

  41

TOTAL

57,345

126,846

789

184,980

89,684

1,349


ATTACHMENT B

JUNE 2012 SI PARAGRAPH CONTENT

Example 1:

  • SERVICE PENSION
  • LESS THAN MAXIMUM RATE – VARIATION (INCREASE)
  • ASSETS TESTED
  • JOINT ASSESSMENT
  • TAXABLE
  • FULL INCOME AND ASSETS ATTACHMENT
  • FULL OBLIGATIONS
  • PAYMENT SUMMARIES ENCLOSED
  • GENERAL INFORMATION SHEET (GIS) ENCLOSED

GPO Box 9998, Brisbane  QLD  4001

Contact:

Telephone:Brisbane Office

Bank of Queensland Centre

259 Queen Street

Brisbane QLD 4000

123 456 789  044Postal Address:

JOHN SMITHGPO Box 9998 Brisbane QLD 4001

MARY SMITHTelephone:

123 SAMPLE STREETCapital city callers: 133 254

MODELTOWN  QLD  4010Non-capital city callers: 1800 555 254

Facsimile: (07) 3223 8479

17 June 2012

YOUR FILE NUMBER IS QX000000

Dear Mr and Mrs SMITH,

This is to advise you that your service pension has been increased.  This change will take effect from 1 July 2012.

Payment Information

Details of your payments are provided in the Payment Information Attachment.

Cost of living changes to the Income and Assets Test

Recent increases in the cost of living have been applied to the following income and assets limits for service pension:

  • Income Free Area – this is the amount of income you can have before your service pension is reduced below the maximum rate payable;
  • Assets Value Limit – this is the amount of assets you can have (other than your family home) before your service pension is reduced below the maximum rate payable;
  • Deeming Thresholds – these are the amounts of financial assets you can have before the higher deemed interest rates are applied to the assessment of service pension.

For details on these changes please refer to the General Information Sheet which is attached to this letter.

Issue of 2011/2012 Financial Year Payment Summaries

As it is the end of the 2011/2012 financial year, Payment Summaries are being issued.  You will need this information if you are required to lodge a tax return.

Please note that from this year Payment Summaries will include both taxable and tax exempt (i.e. non-taxable) payments.  Please see notes on reverse for explanation of these payments and whether you need to record them in your tax return.

Payment Summary for JOHN SMITH is enclosed with this letter.

Payment Summary for MARY SMITH is enclosed with this letter.

If you are unsure as to whether you are required to lodge a tax return or if you have any questions about taxation matters you should contact the Australian Taxation Office on 13 28 61.

Department of Veterans' Affairs staff are unable to assist with taxation enquiries.

Medicare Levy Exemption

If you have been eligible for full treatment at departmental expense during the past financial year, you are eligible for a full or half exemption from payment of the Medicare levy for that period.  The number of days you are eligible for a full or half Medicare levy exemption is shown on your Payment Summary.

Your Income and Assets

Your service pension is assessed under the assets test using your income and assets as shown in the attached list.  It is important that you check that this list is a full and accurate statement of your income and assets.

Events You Must Tell Us About

Details of your obligations to notify us of changes to your circumstances are included in the attachment 'Statement of Obligations - Important Information You Should Retain'.  These apply to both you and your partner and it is important that you both read them.

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 processed before this letter was sent.  If this is the case, we will send you another letter providing details of your new pension assessment when that change has been finalised This normally takes no more than 4 weeks.

Your Right of Review

If you do not agree with this variation to your pension, you may apply to have it reviewed by a Review Officer at this office.  If you do decide to apply, you must do so within three months of being advised of this decision.  Such a request for review must be in writing, and must set out your reasons for seeking this review.

If you have any questions regarding Income Support issues you should contact us on 1300 550 452 (Capital city callers) or 1800 550 452 (Non-Capital city callers).  For any other enquiries please contact the Department at the address or telephone number shown at the top of this letter.

Yours sincerely,

ALISON STANLEY

Deputy Commissioner

as Delegate of the Secretary and Repatriation Commission

ATTACHMENTS

  • Payment Information Attachment
  • Payment Summary/s             
  • General Information Sheet


PAYMENT INFORMATION ATTACHMENT

The Department calculates pension payments on a daily basis.  This means that your fortnightly pension payment is made up of 14 days of entitlement of pension.  Therefore, when there is a change to your circumstances on any particular day in the fortnight, your pension will be adjusted from that day.  For that reason your pension payment may be different for one or two paydays after a reassessment.

Payment for 12 JULY 2012VeteranPartner

TOTAL FORTNIGHTLY PAYMENTxxx.xxxxx.xx

This is made up of:

- xxxxxxxxx xxxxxxxxxxxxxxx.xxxxx.xx

- xxxxxxxxxxx xxxxxxxxxxxx    x.xx    x.xx

Payment for 26 JULY 2012VeteranPartner

TOTAL FORTNIGHTLY PAYMENTxxx.xxxxx.xx

This is made up of:

- xxxxxxxxx xxxxxxxxxxxxxxx.xxxxx.xx

- xxxxxxxxxxx xxxxxxxxxxxx    x.xx    x.xx

Please Note: If you have an overpayment or lump sum advance which is currently being recovered (by deductions from your fortnightly pension), the amount paid into your account may be less than the total fortnightly payment shown above.


INCOME AND ASSETS ATTACHMENT

(Information currently used to assess your pension)

The following is a complete list of your Income and Assets as recorded by the Department.  If any details are incorrect or have been omitted you should notify the Department within 14 days (28 days if you are living overseas or receive remote area allowance).  Please note that failure to fulfill this obligation may lead to your service pension being overpaid.  Such overpayments are recoverable.

You are receiving service pension at less than the maximum rate payable.

The amount that you are paid depends on your combined income and assets but does not include the home in which you live.  The pension is calculated under two separate tests: an income test and an assets test.  The test that pays the lower rate of pension is the one that applies.

You are currently paid under the assets test.  The total of your assessed fortnightly income is $X,XXX.XX.  The total of all your assets (excluding any deductible assets) is $XXX,XXX.XX.  Details of how your pension has been assessed are shown below.

FINANCIAL ASSETS

Savings and Cheque Accounts

Description

Account Number

Asset Amount

XXXXXXXX

XXXXXXXXXXX

                $XXXX.XX

XXXXXXXX

XXXXXXXX

                   $XXX.XX

Listed Securities and Unlisted Public Securities

Description

No. of Shares

Asset Amount

XXXXXX

X,XXX

        $XX,XXX.XX

QQQQQQQQQQQQQ

XXX

           $X,XXX.XX

Managed Investments

Description

Units

Asset Amount

VVVVVVVVVV

XX

               $XXX.XX

CCCCCCCCCCCCC

XXX

               $XXX.XX

Total Financial Assets

FINANCIAL ASSETS VALUE

DEEMED INTEREST RATE

DEEMED INCOME PER FORTNIGHT

$XX,XXX.XX

X.X%

$XX.XX

$         XX.XX

X.X%

$XX.XX

$XX,XXX.XX

$XX.XX

What is Deemed Income?

For pension purposes, income from financial assets such as accounts with banks, building societies and credit unions, loans, bonds, debentures, gifts, shares, managed investments and bullion is deemed.  The value of all your financial assets are added together, and deemed interest rates are applied to calculate the income.

At present, deemed income is calculated as follows, on the total of all your financial assets:

$0 to $XX,XXX - at X.X%

$XX,XXX + - at Y.Y%

If your investments are earning more than the X.X% or Y.Y% deeming rates, this additional income will not affect the rate of your T-PENSION-SP-ISS-AP.

IMPORTANT: You only need to notify the department if there are any changes to the value of your financial assets, as shown above.  You do not need to advise of any changes to the interest rates of these investments.

OTHER INCOME AND ASSETS

The following assets are those, which do not have deeming applied to them but are still used to determine your rate of pension.

Home Assets

The asset and/or income values shown below are the amounts used for pension purposes.

  • Market value of household contents - $XX,XXX.XX

Miscellaneous Assets

  • T-MISC-ASSET-DESCRIPTION with a net market value of $X,XXX.XX

Direct Income

T-DESCRIPT-MISC-EARNINGS - $XX.XX per fortnight


STATEMENT OF OBLIGATIONS

IMPORTANT INFORMATION YOU SHOULD RETAIN

(Information current as at T-ADVICE-PRINT-DATE)

Events You Must Tell Us About

You must tell us within 14 days (28 days if you are living overseas or receive remote area allowance) if any of the events listed below occur.  These events may affect the amount of service pension you receive.  If you do not tell us of any of these changes you may be overpaid.  We are entitled under section 205 of the Veterans' Entitlements Act 1986 to recover this overpayment.

You will also need to tell us the date any changes to your circumstances occur.

When you are telling us of changes to your circumstances you should do this by telephoning or visiting any Department of Veterans' Affairs Office, or by writing to the Deputy Commissioner.

Obligations - Financial

You currently receive service pension at less than the maximum rate because your assets are above the current threshold.

You are obliged by law to tell us within 14 days (28 days if you are living overseas or receive remote area allowance) if you gain or dispose of any assets.  You must also notify this Department if your combined gross income from all sources increases above $X,XXX.XX per fortnight.  This will ensure that your service pension continues to be paid at the correct rate.

If your combined assets are reduced, any increase in pension can only be made the day your new details are received by us.

The following information may assist you to decide what you need to tell us about:

Some examples of what you need to tell us about

  • Increases to the total value of your financial investments.
  • Money acquired through inheritance, lotteries, gambling, etc.
  • Increases to income from other sources eg. wages, superannuation.
  • If you give away $10,000 or more worth of assets in a tax year or $30,000 or more in a five-year rolling period that commences on, or any time after 1 July 2002.  Assets may be cash or non-cash assets such as a car or other property.

Some examples of what you do not need to tell us about

(This information is obtained from the finance industry)

  • Changes to the interest rates paid on your savings and investments.
  • Changes to the unit value or rates of return for investments in publicly listed companies.
  • Restructures of publicly listed companies in which you have money invested.

Superannuation

If you are eligible for Commonwealth Superannuation or Defence Forces Retirement Benefits, you must tell us full details within 14 days (28 days if you are living overseas or receive remote area allowance) of when these payments are granted, or if you receive any lump sum or special payments.  You do not need to tell us of indexation changes to your regular fortnightly payments because your pension will be adjusted automatically.

Obligations – Domestic Situation

You must tell us if:

  • You live apart because of age, ill health or any other reasons
  • You get divorced
  • Your partner passes away.

Obligations – Homeowner

As a homeowner, you must tell us full details if:

  • You sell your home
  • Either of you leave your home because of age or ill health
  • You rent or sublet your home
  • Either of you leave your home for any period in excess of twelve months

Obligations – General

  • Either of you change your postal and/or residential address,
  • Either of you leave Australia,
  • Either of you are granted any pension or benefit from the Department of Families, Housing, Community Services and Indigenous Affairs,
  • Either of you are granted any pension or benefit from an overseas authority,
  • Either of you make a claim or receive workers compensation, sickness or accident insurance other than a payment of disability, war widow's or war widower's pension from this department,
  • Either of you are imprisoned after conviction for an offence,
  • Either of you are the beneficiary, trustee or controller of a private trust, including a testamentary trust or a special disability trust.

Conclusion

The above are your full obligations to the Department.  If you have any queries about any of the above matters please contact this office at the address or telephone number shown at the top of this letter.


GPO Box 9998  in your Capital City

JOHN SMITH

123 SAMPLE STREET

MODELTOWN  QLD  4010

PAYG PAYMENT SUMMARY

INDIVIDUAL NON BUSINESS

Payment Summary for the year ending 30 June 2012

Payee Details

JOHN SMITH

123 SAMPLE STREET

MODELTOWN  QLD  4010

DVA reference number

QX000000

Payee's tax file number

555 333 111

Period of payment

01/07/11 to 30/06/12

Total tax withheld

$XXX.XX

Gross taxable payments

$XXXX.XX

Total tax exempt payments

$XXXXX.XX

        - Tax-free pensions and benefits

$XXXX.XX

        - Other tax exempt payments

$XXXX.XX

Medicare levy full or half exemption days

XXX

Remote area allowance

$XXX.XX

Payer Details

Payer's ABN or withholding number:    2396 4290 824

Payer's name:    Department of Veterans' Affairs

Signature of authorised person:    ALISON STANLEY

Date:    20/06/12

See notes on reverse.

Notes:

Total tax withheld: This is the amount Veterans' Affairs has deducted from your payments for tax. If this payment summary shows an amount in the total tax withheld field you should lodge a tax return. This will ensure that you receive any refunds of tax to which you may be entitled. If no tax was withheld you may still have to lodge a tax return.

Gross taxable payments: If you are completing a tax return, this is the amount you should show as income under 'Australian Government pensions and allowances' in the Income section of your tax return.

Total tax exempt payments: This is the total of the tax exempt payments you were paid for the tax year, including Tax-free pensions and benefits and Other tax exempt payments.

Tax-free pensions and benefits: These payments are tax exempt but you should declare them on tax return under 'Tax-free Government Pensions or Benefits'.  This amount may also need to be declared on your spouse's tax return as 'spouse's tax exempt pension income'.

Other tax exempt payments: These are tax exempt payments made to you that you do not need to show on your tax return.

Medicare levy exemption: A person who is a holder of a Veterans' Affairs Gold (treatment) Card is eligible for a full or half exemption from paying the Medicare Levy. Where applicable, the number of Medicare Levy full or half exemption days is shown on this payment summary. If you need to lodge a tax return the number of days shown will need to be stated at the relevant Medicare Levy question.

Remote area allowance: This amount is included in your Total tax exempt payments.  You will need to declare your Remote area allowance separately if you are claiming a zone tax offset.

Further assistance: If you have any taxation enquiries, particularly in

relation to whether you qualify for a full or half Medicare Levy

exemption, read the Medicare Levy section in TaxPack, or Short

tax return instructions for the relevant financial year, or call the

Australian Taxation Office on 13 28 61 between 8.00 am and 6.00 pm

Monday to Friday or visit www.ato.gov.au. Pension enquiries

should be directed to the Department of Veterans' Affairs.

The Australian Taxation Office checks information shown in tax returns

against information provided by the Department of Veterans' Affairs.

Example of the General Information Sheet (GIS) for Service Pensioners (non-transitional).

There is a separate GIS for income support supplement and age pension recipients.

GENERAL INFORMATION ON SERVICE PENSION RATES AND LIMITS

(Information current as at 1 July 2012)

MAXIMUM RATES OF SERVICE PENSION (including pension supplement)

Singles Rate$XXX.XX (per fortnight)

Couples Rate (each)$XXX.XX (per fortnight)

PENSION INCOME LIMIT (per fortnight)Income Free AreaCut Off

Singles Limit$XXX.XX              $X,XXX.XX

Couples Limit (combined)$XXX.XX              $X,XXX.XX

INCOME TEST:  Pension rate is reduced by 50 cents for each dollar of income above the income free area.

PENSION ASSETS LIMITAssets Free AreaCut Off

Home Owner

Singles Limit$XXX,XXX$XXX,XXX

Couples Limit (combined)$XXX,XXX$XXX,XXX

Non Home Owner

Singles Limit$XXX,XXX$XXX,XXX

Couples Limit (combined)$XXX,XXX$XXX,XXX

ASSETS TEST:  Pension rate is reduced by 37.5 cents for every $250 of assets above the assets free area.

NOTE:

  • Income and assets limits do not apply to blinded service pensioners.
  • Higher income and assets cut off limits may apply if rent assistance is payable.
  • Both income and assets tests are applied to work out a pension rate.  The rate of pension paid is the lower of the two.

GOLD CARD INFORMATION

The Gold Card income and assets limits shown in the next section do not apply if:

  • Your disability pension is above 50% of the general rate and you also receive an amount of service pension (including pension supplement).  Should your service pension cease due to excess income and assets, you will no longer be eligible for a Gold Card; or
  • You receive a disability pension at 100% of the general rate, Intermediate rate, EDA or TPI; or
  • You are aged 70 years or over and you are a veteran who served in Australia's Defence Force and have qualifying service from any conflict or you are an Australian Mariner with qualifying service from World War II.

The Gold Card income and assets limits shown in the next section apply if:

  • You receive a disability pension below 50% of the general rate and you also receive an amount of service pension; or
  • You are an Australian veteran or mariner whose eligibility for the Gold Card is dependent solely on your service pension payment.

GOLD CARD INCOME CUT OFF LIMITS

Singles Limit$XXX.XX (per fortnight)

Couples Limit (combined)$XXX.XX (per fortnight)

GOLD CARD ASSETS CUT OFF LIMITS

Home Owner                            Non Home Owner

Singles Limit$XXX,XXX                            $XXX,XXX

Couples Limit (combined)$XXX,XXX              $XXX,XXX

DEEMING

Deeming assumes that any money you have invested in financial assets is earning a particular amount of income regardless of the actual amount earned. The deeming rates are:

SinglesLow Rate:- x% interest up to the threshold of $xx,xxx

High Rate:- y% interest for the remaining balance

CouplesLow Rate:- x% interest up to the threshold of $xx,xxx

High Rate:- y% interest for the remaining balance

ILLNESS SEPARATED COUPLES

Couples separated due to ill health are paid the single rate of service pension but have their income and assets assessed as a couple.

RENT ASSISTANCE

You may be eligible for rent assistance if you pay rent to a non-government body or landlord.  Rent assistance is not payable if you reside in a government funded (approved) nursing home, or in government funded housing.

The amount of rent assistance you received depends on the amount of rent you pay and your family circumstances.  Rent assistance is paid at the rate of 75 cents in the dollar for every dollar you pay over the set rent limits.

Maximum Amount of Rent Assistance Payable (per fortnight)

No children1-2 children3 or more children

Singles Rate$XXX.XX$XXX.XX$XXX.XX

Couples Rate(combined)$XXX.XX$XXX.XX$XXX.XX

Rent Limit (per fortnight)

No children1-2 children3 or more children

Singles Limit$XXX.XX$XXX.XX$XXX.XX

Couples Limit (combined)$XXX.XX$XXX.XX$XXX.XX

GIFTING

A gift is an asset which is given away or disposed of without receiving the market value of that gift in return.  A gift may be either a cash amount or non cash assets such as a car or other property.

You must notify us if you give away a total of $10,000 or more in a tax year or $30,000 over a rolling five-year period.

The amount above either limit will continue to be counted as if it were still your asset for a period of 5 years and may therefore continue to affect your pension.  We will also deem income on the value of any gift above either limit for 5 years.


Example of the General Information Sheet (GIS) for transitional rate Service Pensioners.

There is a separate GIS for income support supplement and age pension recipients.

GENERAL INFORMATION ON SERVICE PENSION RATES AND LIMITS

(Information current as at 1 July 2012)

MAXIMUM RATES OF SERVICE PENSION (transition rate)

Singles Rate$XXX.XX (per fortnight)

Couples Rate (each)$XXX.XX (per fortnight)

PENSION INCOME LIMIT (per fortnight)Income Free AreaCut Off

Singles Limit$XXX.XX              $X,XXX.XX

Couples Limit (combined)$XXX.XX              $X,XXX.XX

INCOME TEST:  Pension rate is reduced by 40 cents for each dollar of income above the income free area.

PENSION ASSETS LIMITAssets Free AreaCut Off

Home Owner

Singles Limit$XXX,XXX$XXX,XXX

Couples Limit (combined)$XXX,XXX$XXX,XXX

Non Home Owner

Singles Limit$XXX,XXX$XXX,XXX

Couples Limit (combined)$XXX,XXX$XXX,XXX

ASSETS TEST:  Pension rate is reduced by 37.5 cents for every $250 of assets above the assets free area.

NOTE:

  • Income and assets limits do not apply to blinded service pensioners.
  • Income limits may increase for each dependent child or student up to the age of 22, or if rent assistance is payable.
  • Both income and assets tests are applied to work out a pension rate.  The rate of pension paid is the lower of the two.

GOLD CARD INFORMATION

The Gold Card income and assets limits shown in the next section do not apply if:

  • Your disability pension is above 50% of the general rate and you also receive an amount of service pension.  Should your service pension cease due to excess income and assets, you will no longer be eligible for a Gold Card; or
  • You receive a disability pension at 100% of the general rate, Intermediate rate, EDA or TPI; or
  • You are aged 70 years or over and you are a veteran who served in Australia's Defence Force and have qualifying service from any conflict or you are an Australian Mariner with qualifying service from World War II.

The Gold Card income and assets limits shown in the next section apply if:

  • You receive a disability pension below 50% of the general rate and you also receive an amount of service pension; or
  • You are an Australian veteran or mariner whose eligibility for the Gold Card is dependent solely on your service pension payment.

GOLD CARD INCOME CUT OFF LIMITS

Singles Limit$XXX.XX (per fortnight)

Couples Limit (combined)$XXX.XX (per fortnight)

Add $24.60 per fortnight for each dependent child or student up to the age of 22.

GOLD CARD ASSETS CUT OFF LIMITS

Home Owner                            Non Home Owner

Singles Limit$XXX,XXX                            $XXX,XXX

Couples Limit (combined)$XXX,XXX              $XXX,XXX

DEEMING

Deeming assumes that any money you have invested in financial assets is earning a particular amount of income regardless of the actual amount earned. The deeming rates are:

SinglesLow Rate:- x% interest up to the threshold of $xx,xxx

High Rate:- y% interest for the remaining balance

CouplesLow Rate:- x% interest up to the threshold of $xx,xxx

High Rate:- y% interest for the remaining balance

ILLNESS SEPARATED COUPLES

Couples separated due to ill health are paid at the single rate of service pension but have their income and assets assessed as a couple.

RENT ASSISTANCE

You may be eligible for rent assistance if you pay rent to a non-government body or landlord.  Rent assistance is not payable if you reside in a government funded (approved) nursing home, or in government funded housing.

The amount of rent assistance you received depends on the amount of rent you pay and your family circumstances.  Rent assistance is paid at the rate of 75 cents in the dollar for every dollar you pay over the set rent limits.

Maximum Amount of Rent Assistance Payable (per fortnight)

No children1-2 children3 or more children

Singles Rate$XXX.XX$XXX.XX$XXX.XX

Couples Rate(combined)$XXX.XX$XXX.XX$XXX.XX

Rent Limit (per fortnight)

No children1-2 children3 or more children

Singles Limit$XXX.XX$XXX.XX$XXX.XX

Couples Limit (combined)$XXX.XX$XXX.XX$XXX.XX

GIFTING

A gift is an asset which is given away or disposed of without receiving the market value of that gift in return.  A gift may be either a cash amount or non cash assets such as a car or other property.

You must notify us if you give away a total of $10,000 or more in a tax year or $30,000 over a rolling five-year period.

The amount above either limit will continue to be counted as if it were still your asset for a period of 5 years and may therefore continue to affect your pension.  We will also deem income on the value of any gift above either limit for 5 years.


Example 2:

  • AGE PENSION PLUS DFISA
  • LESS THAN MAXIMUM RATE – VARIATION (INCREASE)
  • SINGLE ASSESSMENT
  • TAXABLE
  • PAYMENT SUMMARY ENCLOSED
  • GIS

GPO Box 9998, Brisbane  QLD  4001

Contact:

Telephone:Brisbane Office

Bank of Queensland Centre

259 Queen Street

Brisbane QLD 4000

123 456 789  044Postal Address:

MR ROBERT MURDOCHGPO Box 9998 Brisbane QLD 4001

223 SAMPLE STREETTelephone:

MODELTOWN  QLD  4010Capital city callers: 133 254

Non-Capital city callers: 1800 555 254

Facsimile: (07) 3223 8479

17 June 2012

YOUR FILE NUMBER IS QX000000

Dear Mr MURDOCH,

This is to advise you that your:

  • age pension has been increased

  • Defence Force Income Support Allowance (DFISA) has reduced to nil.

This change will take affect from 1 July  2012.

Payment Information

Details of your payments are provided in the Payment Information Attachment.

Cost of living changes to the Income and Assets Test

Recent increases in the cost of living have been applied to the following income and assets limits for age pension:

  • Income Free Area - this is the amount of income you can have before your age pension is reduced below the maximum rate payable;
  • Assets Value Limit - this is the amount of assets you can have (other than your family home) before your age pension is reduced below the maximum rate payable;
  • Deeming Thresholds – these are the amounts of financial assets you can have before the higher deemed interest rates are applied to the assessment of age pension.

For details on these changes please refer to the General Information Sheet which is attached to this letter.

Defence Force Income Support Allowance (DFISA)

DFISA is a payment made under the Veterans' Entitlements Act 1986 by the Department of Veterans' Affairs.  DFISA is payable when your age pension is reduced or not payable because of adjusted disability pension paid by the Department of Veterans' Affairs.

DFISA is the difference between the amount of your age pension, and what it would be if the adjusted disability pension was not included in your income assessment, but was included in the calculation of any rent assistance you may be entitled to.

The calculation of the rate of DFISA is based on your age pension assessment.  If you wish to request a review of your age pension assessment please see the paragraph below titled 'Your Right of Review'.

Issue of 2011/2012 Financial Year Payment Summaries

As it is the end of the 2011/2012 financial year, Payment Summaries are being issued.  You will need this information if you are required to lodge a tax return.

Please note that from this year Payment Summaries will include both taxable and tax exempt (i.e. non-taxable) payments.  Please see notes on reverse for explanation of these payments and whether you need to record them in your tax return.

Payment summary for ROBERT MURDOCH is enclosed with this letter.

If you are unsure as to whether you are required to lodge a tax return or if you have any questions about taxation matters you should contact the Australian Taxation Office on 13 28 61.

Department of Veterans' Affairs staff are unable to assist with taxation enquiries.

Medicare Levy Exemption

If you have been eligible for full treatment at departmental expense during the past financial year, you are eligible for a full or half exemption from payment of the Medicare levy for that period.  The number of days you are eligible for a full or half Medicare levy exemption is shown on your Payment Summary.

If you were previously being paid by Centrelink, they will issue a payment summary to you separately.

Your Income and Assets

As your age pension is assessed under the income test, some assets not affecting your rate of age pension have not been included in the attached list of income and assets.  You should advise the Department within 14 days (28 days if your are living overseas) if the information is incorrect.

Events You Must Tell Us About

Details of your obligations to notify us of changes to your circumstances are included in the attachment 'Statement of Obligations - Important Information You Should Retain'.

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 processed before this letter was sent.  If this is the case, we will send you another letter providing details of your new pension assessment when that change has been finalised This normally takes no more than 4 weeks.

Your Right of Review

If you do not agree with this decision, you can contact your nearest Veterans' Affairs office and discuss the reasons for the decision.  If you remain dissatisfied, you may apply to have the decision reviewed by an Authorised Review Officer, with no prior involvement in the case.  If you decide to apply for a review more than 13 weeks from the day this notice is given to you, you can only be paid an adjustment from the date we receive your application.  Requests for review may be made in person, by telephone or in writing.

The rate of DFISA paid to you is derived from your age pension assessment.  You may seek to have your age pension assessment reviewed if you are dissatisfied with your DFISA rate.

If you have any questions regarding Income Support issues you should contact us on 1300 550 452 (Capital city callers) or 1800 550 452 (Non-Capital city callers).  For any other enquiries please contact the Department at the address or telephone number shown at the top of this letter.

Yours sincerely,

ALISON STANLEY

Deputy Commissioner as Delegate of the Secretary

ATTACHMENTS

  • Payment Information Attachment
  • Tailored Income and Assets Attachment
  • Full Obligations
  • Payment Summary/s
  • General Information Sheet


Example 3:

  • INVALIDITY SERVICE PENSION
  • MAXIMUM RATE
  • NON TAXABLE
  • PAYMENT SUMMARY ENCLOSED

GPO Box 9998, Brisbane  QLD  4001

Contact:

Telephone:Brisbane Office

Bank of Queensland Centre

259 Queen Street

Brisbane QLD 4000

123 456 789  044Postal Address:

MR BILL BROWNGPO Box 9998 Brisbane QLD 4001

323 SAMPLE STREETTelephone:

MODELTOWN  QLD  4010Capital city callers: 133 254

Non-Capital city callers: 1800 555 254

Facsimile: (07) 3223 8479

17 June 2012

YOUR FILE NUMBER IS QX000000

Dear Mr BROWN,

I am writing to you about your service pension payment from Veterans' Affairs. You currently receive the maximum rate of service pension and this amount remains unchanged.

Cost of living changes to the Income and Assets Test

Recent increases in the cost of living have been applied to the following income and assets limits for service pension:

  • Income Free Area – this is the amount of income you can have before your service pension is reduced below the maximum rate payable;
  • Assets Value Limit – this is the amount of assets you can have (other than your family home) before your service pension is reduced below the maximum rate payable;
  • Deeming Thresholds – these are the amounts of financial assets you can have before the higher deemed interest rates are applied to the assessment of service pension.

For details on these changes please refer to the General Information Sheet which is attached to this letter.

Issue of 2011/2012 Financial Year Payment Summaries

As it is the end of the 2011/2012 financial year, Payment Summaries are being issued.  You will need this information if you are required to lodge a tax return.

Please note that from this year Payment Summaries will include both taxable and tax exempt (i.e. non-taxable) payments.  Please see notes on reverse for explanation of these payments and whether you need to record them in your tax return.

Payment summary for BILL BROWN is enclosed with this letter.

If you are unsure as to whether you are required to lodge a tax return or if you have any questions about taxation matters you should contact the Australian Taxation Office on 13 28 61.

Department of Veterans' Affairs staff are unable to assist with taxation enquiries.

Medicare Levy Exemption

If you have been eligible for full treatment at departmental expense during the past financial year, you are eligible for a full or half exemption from payment of the Medicare levy for that period.  The number of days you are eligible for a full or half Medicare levy exemption is shown on your Payment Summary.

Financial Obligations

You need to tell us within 14 days (28 days if you are living overseas or receive remote area allowance) if your total income from all sources is more than $XXX.XX per fortnight or the value of your total assets is more than $XXX,XXX.XX.

Other Obligations

We have explained your obligations to you in previous letters and the booklet 'You and Your Pension'.  These obligations still 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 processed before this letter was sent.  If this is the case, we will send you another letter providing details of your new pension assessment when that change has been finalised This normally takes no more than 4 weeks.

If you have any questions regarding Income Support issues you should contact us on 1300 550 452 (Capital city callers) or 1800 550 452 (Non-Capital city callers).  For any other enquiries please contact the Department at the address or telephone number shown at the top of this letter.

Yours sincerely,

ALISON STANLEY

Deputy Commissioner

as Delegate of the Secretary and Repatriation Commission

ATTACHMENTS

  • Payment Information Attachment
  • Payment Summary/s
  • General Information Sheet


ATTACHMENT C

SAMPLE OF MEDICARE LEVY EXEMPTION CERTIFICATE

GPO Box 9998

In Your Capital City

DPID BARCODE TO BE INSERTED BY CCS

MR JAMES KENNEDY

34 ELIZABETH STREET

RANDWICK   NSW   2031

Medicare Levy Exemption Certificate

Dear Beneficiary

This is your Medicare Levy Exemption Certificate showing the number of days you were eligible for full or half exemption from payment of the Medicare Levy.  This exemption applies because you were eligible for full treatment at the expense of the Department of Veterans' Affairs during those days.

Your File Number is: XXXXXXXX

The number of days you are eligible for a full or half Medicare Levy Exemption during 2011/2012 is: XXX

Please note: If you lodge an income tax return YOU DO NOT NEED TO ATTACH this Certificate to your tax return.  However, you should retain this Certificate for your records.

If you need to lodge a tax return, the number of days you were eligible for full or half exemption will need to be stated against the relevant question on your tax return.

If you have any enquiries about the number of days, please contact your nearest DVA office.

If you have any enquiries about whether you are fully or half exempt from the payment of Medicare levy, read TaxPack 2012 or Short tax return instructions 2012 or contact the Australian Taxation Office on 13 28 61.

Yours faithfully

     Deputy Commissioner