B39/1995 CHANGE TO THE EXCHANGE RATE APPLIED TO BRITISH DISABILITY PENSION FOR SERVICE PENSION RENT ASSISTANCE ASSESSMENT PURPOSES

DATE OF ISSUE:  7 JUNE 1995

CHANGE TO THE EXCHANGE RATE APPLIED TO BRITISH DISABILITY PENSION FOR SERVICE PENSION RENT ASSISTANCE ASSESSMENT PURPOSES

PURPOSE

To advise of a change in the way the exchange rate is determined for application to the income of service pensioners in receipt of British Disability Pension paid directly from the UK.

Disability Pension is considered to be income when determining the rate of Rent Assistance payable.  Disability Pension is not income for the general Service Pension test.

BACKGROUND

Prior to 1988 DVA paid all British Disability Pensions as an agent for the British Government.  The UK Treasury set an exchange rate for the conversion of the UK entitlement to Australian Dollars.  It is appropriate for the UK Treasury to set the exchange rate because ultimately it is UK funds being outlaid.

In 1988 the UK Department of Social Security (BDSS) began payment of Disability Pension by direct credit from the UK for all but EATS and Composite cases.  In cases where British DP is paid to service pensioners with Rent Assistance the use of the UK Treasury rate is incorrect as payment is received at the ruling market rate on the day of payment.  The market rate is usually much less than the UK Treasury rate which results in DVA underpaying Rent Assistance.

CHANGE

With effect from the date of signature on this instruction, the BRI exchange rate will be used to convert British DP that is paid directly from the UK, to $A for rent assistance calculation purposes.  This is consistent with Commission policy (Decn CM4625) for the conversion of Pounds Sterling income that affects Service Pension payments.

EATS AND COMPOSITE

The UK Treasury rate remains appropriate in EATS and Composite cases.

PROCEDURE

When notification of a BRI superannuation exchange rate variation exercise is received the BRI exchange rate is to be used to convert UK Disability Pension for Rent Assistance calculations.  These Rent Assistance cases will need to be processed manually.

No reassessment is to be undertaken in any case, for the period from 1988.

LIST OF CASES

A list of the affected cases can be obtained from the Mainframe Support Unit, contact

Joel O'Brien 06 289 6078.

MURRAY HARRISON

BRANCH HEAD

INCOME SUPPORT