C34/2002 CHANGES TO IPS - PREVENTING DECEASED PEOPLE FROM GOING BACK INTO PAYMENT

Purpose

This Departmental Instruction provides information concerning recent changes made to the IPS fortnightly payrun process (IPS FORT) to prevent deceased people from being returned to payment.  The changes may result in some additional processing work where problem cases are identified.

Background

For some time there have been problems with system processes returning deceased people to payment.  System Delivery, in conjunction with IMU, has been examining the cause of these problems and has identified several system processes that may erroneously cause a deceased client to return to payment.

Every effort has been made to identify and correct all of the potential causes of this problem, however, there remains the possibility that some system errors will remain undetected.  It is also possible that system changes made in the future may introduce new scenarios in which deceased clients may otherwise incorrectly be returned to payment.

To ensure that payments to deceased clients are not continued, a check to prevent this happening has been built into the IPS FORT process.

No Fortnightly Payments Made  Where Date of Death Recorded

If a client has a date of death recorded then any recurring and associated adjustment (recon) payments will not be made to the client on the normal fortnightly payday.  Adjustment (recon) payments will only be paid if the client has recurring payabilities of zero rate recorded.

The change works in the same way as for normal IPS FORT errors.  Processing for the client is bypassed completely and no payments are created for the fortnightly payday – this includes any adjustment payments (recons).

The cases are listed as errors on the normal IPS FORT errors report - System Errors (Payment Creation) – (State) Pension Payments – Fortnightly report.   This report is provided to SSOs after each IPS FORT run.

No other action (such as cancelling the recurring payabilities) is performed by the IPS FORT process in respect of the client.

Impact for Death Cases

In normal circumstances, the Death Processing System (DPS) cancels the recurring payabilities and triggers calculation/creation of any required adjustment (recon) payabilities as well as the bereavement payment.  Any fortnightly payments that have been made since the date of death are taken into account when the bereavement payment is automatically calculated.

The change being introduced will have implications for death cases where DPS has not been able to process a death case to finality (due to an error or system problem).  In these cases the client will have a date of death recorded, but the ongoing payments will not have been cancelled.  Until the appropriate PIPS case is actioned to terminate payments, etc., the IPS FORT process for subsequent paydays will bypass the client.

This means that the manual calculation of bereavement payments will need to take into account that ongoing payments have not been made since the date of death was recorded.  This, in turn, means that some adjustment to current procedures may be required.

Five Possible Scenarios

Basically, there are five possible processing scenarios that can arise when a death case is actioned.

Scenario 1

DPS processes the death case to finality.  All payments are automated whether or not the date of death is retrospective to the last payday.

Scenario 2

DPS does not process the case to finality and date of death is in the current pension period.  The appropriate PIPS action to terminate payments, etc. is completed before cut-off for the next fortnightly payday.

Scenario 3

DPS does not process the case to finality and date of death is in a past pension period.  The appropriate PIPS action to terminate payments, etc., is completed before cut-off for the next fortnightly payday.

Scenario 4

DPS does not process the case to finality and date of death is in the current pension period.  The appropriate PIPS action to terminate payments, etc. is not completed before cut-off for the next fortnightly payday.

Scenario 5

DPS does not process the case to finality and date of death is in a past pension period.  The appropriate PIPS action to terminate payments, etc., is not completed before cut-off for the next fortnightly payday.

Some explanation for each of these scenarios is provided below.

Scenario 1 -  DPS Successful

DPS Processes Death Case to Finality

In cases where DPS has processed the case to finality, it automatically terminates all payments, etc. and calculates the bereavement payment.  The bereavement payment calculation automatically takes into account any fortnightly payments made since the date of death.

The new edit check in the IPS FORT process has no implications for these cases because all ongoing payments have been cancelled before the next fortnightly cut-off.

Scenario 2 – DPS Fails

Date of Death in Current Pension Period (processed before cut-off)

PIPS Action in Current Pension Period

In these cases, the PIPS action terminates the ongoing payments, etc. and, if appropriate, sets up pension and related payments due for the period from day 1 of the pension period up to the date of death.   The IPS FORT process for the current pension period releases these payments.  State Office staff are responsible for calculating the bereavement payment and authorising its release to the estate or surviving partner.

The new edit check in the IPS FORT process has no implications for these cases because all ongoing payments have been cancelled before the next fortnightly cut-off.

Scenario 3 – DPS Fails

Date of Death in Previous Pension Period (processed retrospectively)

PIPS Action in Current Pension Period

In these cases, the PIPS action terminates the ongoing payments, etc. and, if appropriate, creates a debt in DMARS for the period from the date of death to day 14 of the previous pension period.  State Office staff are responsible for calculating the bereavement payment (taking into account the overpayment) and authorising its release to the estate or surviving partner.

The new edit check in the IPS FORT process has no implications for these cases because all ongoing payments have been cancelled before the next fortnightly cut-off.

Scenario 4 – DPS Fails

Date of Death in Current Pension Period (processed before cut-off)

PIPS Action After Cut-off For Current Pension Period

The new edit check in the IPS FORT process has some implications for these cases as indicated below.  Some change to local procedures will be necessary.

With cases that fit this scenario, because the PIPS action has not been done, the IPS FORT process will bypass all payments for the client on the next payday.  This includes payment for the period from day 1 of the pension period up to the date of death to which the client was entitled.

The PIPS action (when done) will terminate the ongoing payments, etc. from the date of death and create a debt in DMARS for the period from the date of death to day 14 of the previous pension period.

The important points to note with these cases are:

Payment for the period from day 1 of the pension period up to the date of death has not been made; and

An overpayment has not occurred because all payments were actually  bypassed by the IPS FORT.

State Office staff responsible for managing death cases will need to ensure these factors are taken into account when processing bereavement payments.  The underpaid entitlement should be paid to the deceased client's estate.  The DMARS debt should be waived using the Transaction Type “Waiver Other Reasons (CR)”.  Appropriate comments should also be recorded against the debt transaction.

Scenario 5 – DPS Fails

Date of Death in Previous Pension Period (processed retrospectively)

PIPS Action After Cut-off For Current Pension Period

The new edit check in the IPS FORT process has some implications for these cases as indicated below.  Some change to local procedures will be necessary.

With cases that fit this scenario, because the PIPS action has not been done, the IPS FORT process will bypass all payments for the client on the next payday.   However, the client will already have been overpaid in relation to the previous pension period (maybe more than one pension period depending on the delay in being advised of the client's death).

The PIPS action (when done) will terminate the ongoing payments, etc. from the date of death and create a debt in DMARS for the period from the date of death to day 14 of the previous pension period.

The important points to note with these cases are:

Payment for the period from day 1 of the pension period up to the date of death has been made on an earlier payday; and

The DMARS debt may be overstated and must be checked.  The client will have been overpaid for the period from date of death up until day 1 of the pension period in which the date of death was actually recorded.  All payments from that point are bypassed by the IPS FORT process, although the PIPS case does not take account of this.

State Office staff responsible for managing death cases will need to ensure these factors are taken into account when processing bereavement payments.  The relevant portion of the DMARS debt relating to the actual overpaid entitlement should be recovered from the bereavement payment as per normal.  The remainder should be waived using the Transaction Type “Waiver Other Reasons (CR)”.  Appropriate comments should also be recorded against the debt transactions.

NO Contact

The National Office contact officer for these system changes is Andrew Thomson who can be contacted on (02) 6289 4745 or by email.