C42/2005 PROPERTY VALUATION EXERCISE - 2005/2006 FINANCIAL YEAR

Purpose

The purpose of this Departmental Instruction is to provide information on the annual property valuation exercise.  Details on each of the five stages are provided below.

Background

Every October/November, income support cases requiring a property valuation are automatically selected and forwarded to the Australian Valuation Office (AVO) for valuation by April in the following year.  Once the valuations have been completed, cases are returned to National Office, DVA with the new valuation amount.  This information is then forwarded to State Offices for individual case updating.

A listing of manual cases (those that have not previously been valued by the AVO) is also produced at the time of the bulk run.  State Offices are required to manually prepare and forward requests for valuation for these cases to the AVO.

Due to the implementation of IPS, schedules previously printed for State Office use are no longer available.  Automatic and Manual cases will be provided to the states in a Microsoft Excel format.

Production run

The data extraction was carried out on 11 November 2005.  The data containing information on the automatic reviews was forwarded to the AVO on 14 November 2005.  Excel spreadsheets for automatic and manual cases have been provided to the State Offices.

Number of cases extracted

The data has been extracted through the AD Hoc Inquires System (AIS).

The following is a breakdown of automatic and manual cases extracted from this year's bulk run:

State

Auto

Manual

Manual (Business)

Trusts & Company

NSW

539

118

7

69

VIC

659

75

4

60

QLD

375

90

4

59

SA

151

39

1

20

WA

149

32

0

31

TAS

92

18

1

9

Total

1965

372

17

248

Criterion for extracting cases

The following criteria was used for extracting cases:

• All income support pension recipients (SP, AP or ISS) who have a property, business (with a property), farm or sublet portion of their home and who are either;
• assets tested, or

income tested and have total assets in their assessment within $10,000 of their prescribed assets limit (PAL).

Cases excluded from exercise

The following pensioners have been excluded from this year's bulk run:

• Pensioners who have had an AVO property valuation done since the last bulk run (3 November 2004);
• All single pensioners who are assessed as blinded and are not paid rent assistance; and,
• All couples where both are assessed as blinded and are not paid rent assistance.

State Office to action manual cases

Manual cases have been forwarded to the State Offices in an Excel spreadsheet for further action.  Trusts and Company cases have already been extracted.

State Office action is required to provide the AVO with a form containing detailed information on each of the manual cases where a property valuation is required.  Records are to be kept and a Claims Management System (CMS) case should be created to ensure that all such requests are returned by the AVO and action completed.

Commission Decision

The Commission has endorsed the provision of a maximum 3 month period commencing from the date of the new pension rate determination for those income tested pensioners affected by property reviews.  This will enable pensioners to rearrange their circumstances if they choose, before the pension is varied due to the property valuation.

This policy only applies in circumstances where the property valuation affects the entitlement to the extent of moving the pensioners from the income test to the assets test or cancels their pension altogether.

Refer to DI C32/2005 for further information.

Processing of cases that may require 3 month provision

For the 2005/2006-property valuation exercise 109 auto cases and 39 manual cases have been identified as currently being income tested and therefore possibly affected by the Commission decision.

The AVO will provide reports on the 106 auto cases by the end of February 2006.  This will provide States with time to do some preliminary assessment of which cases are likely to require the three months notice.  Such cases can then be targeted for priority processing in July.

To assist the states with identifying the 39 manual cases mentioned above those cases have been listed at the top of each state tab in the Excel spreadsheet that has been forwarded to the State Offices.

Using AVO Online Valuation Register

All requests to AVO should be submitted via the AVO online valuation register, using the project code of 'Bulk Valuation'.

AVO conduct valuations

The AVO will conduct the property valuations in the period from December 2005 to April 2006.  The AVO will provide updated valuation information to National Office by the end of April 2006 for asset tested cases and February for income tested cases.

Updated data forwarded to State Offices

Printouts and an Excel spreadsheet of the updated property valuations will be provided by National Office to the contact officer in each State Office.  These reports can be expected early March and early February 2006.

State Office update valuations

Once the updated data is received manual action will be required to update the Central Data Base (CDB) to take effect in conjunction with the indexation of the free areas in July 2006 (Ordinary Income Free Area, Asset Value Limit & Adjusted Income Free Area).  Cases where the value of property has reduced may be actioned for increase of the service pension from the next available payday.

Date of valuation to be used in PIPS

All States should use 11 November 2005 as the date of valuation when updating cases in PIPS (Pensioner Information Processing System) for this exercise.

This is not necessarily the date that the AVO has valued the property.

It is essential that this date be used to enable all the appropriate cases to be selected for next year's exercise.  Using another date creates complications for the bulk extraction.

Processing Information

Screens and processing information for PIPS/PC can be found in Departmental Instruction C54/96.

Contact Officer

The contact officer for this exercise is Sarah Paras (02) 6289 6534, Business Operations and Support Section, Income Support Branch.