C08/2014 Property Valuation Exercise - 2013/2014 FY

Replaces DI No.

C15/2013

Purpose

The purpose of this Departmental Instruction is to provide information on the annual property valuation exerci — se.  Details of the process and procedures are provided as follows.

Overview

Historically, i — ncome s — upport cases requiring a property valuation, which were within the prescribed parameters, were selected and forwarded to the Australian Valuation Office (AVO) for valuation.

The closure of the AVO from 30 June 2014 and its associated 'wind down' resulted in more narrow prescribed parameters being used to reduce the number of cases selected as part of this year's exercise, such as urban properties using desktop valuations only.

Criteria for extracting cases

The following criteria were used to extract the cases for the assessment.

All income support pension recipients (SP, Partner SP, AP or ISS) who:

• have a property and there has not been an AVO valuation since
  1 January 2013; and
• are assets tested and have been valued by the AVO previously.

Excluded cases included:

• single blinded and both members of a blind couple;
• t — ime s — hare, business, sole t — rader, d — esignated t — rust, s — ublet portion of home, former home valued between $1 and $100; and
• properties with house and curtilage record — ed and exempt curtilage.

Data extraction

The data was extracted in February 2014 and details of 500 properties were provided to AVO on 14 March 2014.

AVO conduct valuations

The AVO returned the updated valuation information to DVA
6 June 2014.

Updating property value & pension

A DVA scheduled run to automatically upload and reassess the client's record by the AVO batch r — eassessment program for continuation and assets tested reduction cases occurred on 8 July 2014.

Auto update & case numbers

The auto update occurred on 8 July 2014.  The following is a breakdown of the case number — s for this 2013/2014 exercise.  352 cases were auto processed and of these 106 cases resulted in continuations.  The following table provides a state overview of the cases reduced and cancelled.

NSW

QLD

SA

TAS

VIC

WA

Reduction

66

41

11

5

74

36

Cancelled

8

3

0

0

1

1

Total

74

44

11

5

75

37

Increases

Frozen status

Dec'd/Canc/DP Only

Further Investigation

56

1

11

79

Manual cases

Rob — ert Manton, Assistant Director Review — s, Income Support & Grants Branch in Adelaide, will oversee the investigation and processing of manual cases from this year's exercise.

Income support staff in Adelaide will action these cases, which include the following:

• where the assessment moves from the income test to the assets test as a result of the property valuation, including the follow up action at the end of the 3‑month period of grace;
• increase to pension due to a reduced property valuation; and
• where the property has been sold or has been incorrectly recorded.

3 month grace period

There is a maximum 3 month grace period commencing from the date of the new pension rate determination for those income tested pensioners affected by property reviews.  The grace period enable — s pensioners to rearrange their circumstances if they choose, before the pension is varied due to the property valuation.

For the 2013 / 2014 property valuation exercise, 13 potential cases were identified as possibly affected by th — is rule.

Where the pensioner qualifies for the 3 month period of grace, the determination to reduce pension will need to be made and the pensioner notified accordin — gly.

Date of valuation to be used in PIPS

The date of valuation to be used is 31 May 201 — 4 when updating cases in PIPS for this exercise.

This is the date that the AVO has used to value the properties.

DoE – reduced property value

The date of effect where the value of the property has reduced is the date the new valuation data was returned from the AVO,
ie 6 June 2014.

DoE – increased property value

For cases where the value of the property has either increased or remained unchanged, the date of effect is 8 July 2014, being the day 1 of the first pay period after 1 July, which is the usual effective date of the annual indexation of the Ordinary Income Free Area, Asset Value Limit and Adjusted Income Free Area.

List of extracted cases

A spreadsheet containing the lists of cases identified for the annual exercise is available from TRIM (container 1403155), link:

The cases are separated into the following categories with the worksheets labeled accordingly:

• increases;
• already processed;
• income tested 3 June (PoG);
• deceased, cancelled, DP Only;
• no valuation;
• further investigation; and
• bypass cases.

Future Property valuation exercises

The next annual exercise parameters and process will be developed once a new valuation provider has been contracted.  This process is currently in the tender stage.

Contact Officers

The annual exercise is managed by the Reviews and Governance management team in Adelaide:

• Barbara Wozniak – contact, 08 8290 0404;
• Robert Manton – contact, 08 8290 0219; and
• Robyn Del Casale – contact, 08 8290 0395.