C22/2005 Use of Daily Exchange Rate Variations for EATS and Composite Cases

Purpose

This Departmental Instruction provides detail about the exchange rate variation that will change the processing of EATS and Composite cases.

Background

A review by Income Support in 2003 on how exchange rate variations are managed determined the need to unify all Pounds Sterling payments to the one exchange rate.

Previously EATS and Composite cases have been subject to a separate exchange rate that ceased to be provided by the UK Government. See DI C29/2000.

As a result of a commission decision, the daily exchange rate variation of plus or minus 2.5% that is used for Income Support payments will now be applied to the two groups of disability pensioners being EATS and Composite cases.

Issue

Under the current system, there are issues of fairness and consistency as the exchange rate for EATS and Composite cases is varied infrequently.  This change aligns the daily exchange rate for EATS and Composite cases with that used for Income Support pensioners.

Solution

Upon the issuing of this Departmental Instruction all States are to adopt the use of the daily exchange rate.  Using this rate, a revised exchange rate for British pensions paid by the Department of Veterans' Affairs (DVA) will be set whenever the average rate varies by plus or minus 2.5% from the previous base exchange rate.  This style of daily exchange rate is already calculated and used by Income Support.

Action

Effective from 21 June 2005 the current exchange rate will change.  On pension payday 7 July 2005 pensioners will receive a full instalment at the new assessed rate.

Income support will issue a Departmental Instruction advising of the new exchange rate.  This exchange rate is to be applied to EATS and Composite cases with a date of effect as contained in the Income Support Departmental Instruction.

Future changes in the daily exchange rate will be advised by Income Support in the form of a Departmental Instruction.  Any such change should be implemented in the payment of EATS and Composite disability pensions with the same date of effect as contained in the Income Support Departmental Instruction.

Contact

If you have any queries regarding the above information please contact Brian Eastman on (02) 6289 6348 or e-mail brian.eastman@dva.gov.au