B18/1993 BRITISH RETIREMENT INCOME (BRI) VARIATION IN THE EXCHANGE RATE OF POUNDS STERLING AND INDEXATION OF SOME BRITISH PENSIONS

DATE OF ISSUE:  26 March 1993

BRITISH RETIREMENT INCOME (BRI)  VARIATION IN THE EXCHANGE RATE OF POUNDS STERLING AND INDEXATION OF SOME BRITISH PENSIONS

INTRODUCTION

1.In line with the current administrative procedures for the determination of foreign exchange rates,  the Department of Social Security has set a new rate for the Pound Sterling,

also

In the first full week of April 1993 the British Government, in line with their Retail Price Index, will be applying a  3.6%  increase to the National Insurance benefit paid to their beneficiaries.  This increase affects the following pensioners paid by this department:

service pensioners in receipt of British Department of Social Security pension who live in any country other than Australia, Canada or New Zealand,

service pensioners in receipt of a British Indexed Pension (i.e. Public Service, Navy, Teachers etc.) regardless of the country of residence.

EFFECTIVE DATE

Exchange rate

2.On pay-day 15 April 1993 the current exchange rate will change from One Pound Sterling equals $2.1245 to One Pound Sterling equals $2.0367 being the average of the "on demand airmail buying rate" for the two weeks to 24 March 1993.  This is the same exchange rate as the Department of Social Security will be holding from 8 April 1993.

Indexation

3.This part of the exercise will only update superannuation code 09 (British Indexed Pension).

Note:  Any British Indexed Pension cases incorrectly recorded under superannuation code 08 (British Retirement Income) or 99 (Miscellaneous), will need to be manually updated, and the code changed to 09 for future automatic updating.

TIMETABLE

4.This exercise is scheduled for processing on Tuesday night, 30 March 1993.

AUTOMATIC SUPERANNUATION PROCESSING

5.The amount recorded as super type 08 or 09 will be varied by applying a conversion factor which is calculated as follows:

new exchange rate $2.0367              = 0.9587

old exchange rate    $2.1245

6.The amount in Australian Dollars of income recorded as British Retirement Income superannuation type 08 or 09 will be multiplied by the conversion factor to find the new rate of superannuation.   Cases recorded as superannuation type 09 will undergo an additional step where they will be increased using a conversion factor of  1.0360.   The Pension amount will then be reassessed accordingly.

OVERSEAS CASES

7.If a pensioner who is in receipt of British Department of Social Security Retirement pension is living in any country other than Australia, Canada, or New Zealand, the 3.6% increase should be applied and the Service Pension varied accordingly with an effective date of 15 April 1993.

8.Service pensioners who receive British DSS pension and are holidaying in any country, with the exception of Canada or New Zealand, are eligible for the increase.  The increase will be paid if the British DSS know of the pensioners whereabouts.  On their return to Australia these pensioners should be sent an income review.  If the holiday was to England the pension may be increased to the level it would have been paid at if the pensioner had never left the U.K.

9.Service pensioners in receipt of a British Indexed Pension (i.e. Public Service, Navy, Teachers etc.) will have their British pension increased regardless of the country of residence.  These cases should all be recorded as super type 09 (British Indexed Pension).  All such pensions should be reassessed with an effective date of 15 April 1993.

MANUAL CASES AND MS CASES

10.Cases with actions in SB or PY status will not be processed.  These cases will be listed on the manual case listing for follow up action, and CMS/PIPS cases will be created automatically for Branch Office action.

REGULATION 45A PROCEDURES

11.The Assistant Secretary of both Benefits Planning and Management and IT Applications Branches in Central Office will attest to the correctness of the new exchange rate 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.

OUTPUT

12.The pensioner advice letters will contain the correct pension rates and the new notional exchange rate correct to four decimal places.  The two BRI schedules which identify if a beneficiary received a long or short advice will be forwarded direct to your Branch from the NCC with the usual daily outputs.

NCC IMPLICATIONS

13.This exercise is scheduled for processing as ($PPBFORT) on Tuesday, 30 March 1993.  There may be some changes to Advices programs.  ITA, Benefits Applications Section will advise you direct of any special requirements.

MAIL OUT OF ADVICES

14.R.L. Polk have been contracted to prepare the advices for progressive lodgement with Australia Post by Wednesday 7 April 1993.  The NCC will separate the overseas and special register cases for manual distribution by the Branch Offices.

CONTACT OFFICER

15.The Benefits contact officers for this exercise will be:

Murray Chynoweth telephone  (06) 289 6799 (Business Hours)

mobile phone 018 487 489

Ric Mooretelephone  (06) 289 4739 (Policy).

KAY GRIMSLEY

ASSISTANT SECRETARY

BENEFITS INCOME SUPPORT