B64/1995 ADJUSTMENT OF ARREARS PAYABLE - GRANT/INCREASE OF DISABILITY PENSION/WAR WIDOW(ER)S PENSION

DATE OF ISSUE:  1 DECEMBER 1995

ADJUSTMENT OF ARREARS PAYABLE - GRANT/INCREASE OF DISABILITY PENSION/WAR WIDOW(ER)S PENSION

INTRODUCTION

The purpose of this instruction is to introduce legislative and procedural changes to the adjustment of lump sum arrears of disability pension (DP) or war widow/er pension (WWP) payable where the veteran or war widow/er and/or their partner has been receiving a Social Security pension (DSS), or the partner has been receiving an income support supplement (ISS).

BACKGROUND

2.DP and WWP are included as income in the income testing of DSS pensions or benefits, and for the purposes of ISS.  Income testing for DSS pensioners who are members of a couple requires that all of the income of each member of the couple be added together and halved to obtain the income for each member.  Thus although DP or WWP is paid only to the veteran or war widow/er, the income of the partner will be higher by an amount equal to half of DP or WWP.

3.New grants or increases of DP, and grants of WWP are unavoidably retrospective.  Therefore, any grant or increase necessarily involves the calculation and payment of arrears of DP or WWP.  Calculation of DP arrears payable requires reassessment of any DSS income support, or ISS from DVA, that was paid during the period covered by the DP arrears.  This is because the income support or ISS may have been paid at a lower rate if the DP had actually been paid as fortnightly instalments during the period covered by the arrears.

4.Currently, section 205AA of the Veterans' Entitlements Act 1986 (VEA), provides that an amount of an existing pension, benefit or allowance paid to the veteran that would not have been paid if the new pension or allowance had been paid, may be deducted from the new pension.

5.However, this does not provide for the deduction of any amount of an existing pension, benefit or allowance that would not have been paid to the partner if the new pension or allowance had not been paid.

6.Further, although the adjustment of any arrears of DP payable to take into account excess DSS payments requires a calculation by DSS, there is no right of appeal under current provisions against that calculation.

LEGISLATIVE CHANGES

7.The Veterans' Affairs (1995-96 Budget Measures) Legislation Amendment Bill 1995 which received Royal Assent on 14 November 1995, contains the legislative changes required to enable the Department to adjust arrears of DP or WWP owing to the veteran in order to recover moneys that have been paid by DSS to the partner.

8.Part II of the VEA has been amended by insertion of a new section 27A for the calculation of arrears of pension following a retrospective grant or increase of DP.  However, as this section deals solely with adjustments for pension received by the partner, adjustment of arrears in respect of the veteran will continue to come under the provisions of section 205AA.

9.In addition, provision has been made under Part II of the VEA for decisions made by the Repatriation Commission regarding the adjusted amount to be reviewable decisions under the Social Security Act (SSA) 1991 - new section 27B refers.

10.Commencement date of the new provisions is 1 October 1995.  These new sections are detailed below:

Section 27A(1)

Calculation of arrears of pension

"27A.(1) This section applies if:

(a)a pension became payable, or becomes payable at an increased rate, under this Part to a veteran from a date (the operative date) before the date on which a decision to grant the pension, or to increase the rate of the pension, (the decision) is made; and

(b)the veteran is a member of a couple or was a member of a couple at any time during the period between the operative date and the date of the decision (the arrears period); and

(c)the veteran's partner was receiving;

(i)a social security pension or benefit; or

(ii)income support supplement;

any time during the arrears period; and

(d)the rate at which the social security pension or benefit or income support supplement is payable to the veteran's partner is reduced as a result of the pension becoming payable to the veteran, or becoming payable to the veteran at an increased rate, as the case requires.

Note: The amount of arrears of pension payable to the veteran may also be affected by section 205 or 205AA.

"(2) The amount of the pension payable to the veteran in respect of the arrears period is reduced by an amount calculated as follows;

Section 27B(1)

Certain decisions under section 27A reviewable under the Social Security Act

"27B.(1) This section applies if:

(a)a decision is made under section 27A in relation to the amount of arrears of pension to be paid to a veteran; and

(b)subparagraph 27A(1)(c)(i) applies in relation to the veteran.

"(2) The calculations made under Steps 4, 5, and 6 of the Method Statement in section 27A in relation to the payment and payability of a social security pension or benefit are, for the purposes of the Social Security Act, taken to be decisions made under that Act by an officer (other than the Secretary) of the Department administered by the Minister administering that Act."

11.Section 73 of the VEA enables s27A and s27B to apply to Part 4 disability pensions.

Rent Assistance

12.Disability pension affects the rate of rent assistance (RA) payable.  Therefore, when DP is granted or increased retrospectively, an adjustment needs to be made to take into account any amount of RA which would not have been paid had DP been in payment at that time.

13.The new provisions will enable the recovery of a partner's 'overpaid' RA from the veteran's arrears, where RA was paid as a component of ISS.  In all other circumstances (eg service pension RA), any RA 'overpaid' to the partner can be recovered either:

• from the veteran' arrears with the veteran's formal agreement; or

• through normal recovery channels*

*Chapter 7, "Recovery", of the Overpayment Management Manual refers.

CURRENT PROCEDURES

14.Currently a percentage of grants/increases of DP that are processed through Compensation Claims Processing System (CCPS) go directly to automatic payment while others (eg grants of WWP) are processed manually by examiners in the DP cells using the Pensions Information Processing System (PIPS).  All grants/increases determined by decision makers who do not use CCPS are processed manually in the DP cells.

15.In both CCPS scenarios a decision is made initially whether or not to release arrears.  Where it is assessed that a DSS clearance is required, arrears are withheld, a DSS clearance sent out, and the case passed to the Payment Administration section for adjustment of arrears as per advice from DSS.

NEW PROCEDURES

The following procedures have been provided for use by State Offices.

Automatic

16.The CCPS system will automatically default to "DSS clearance required" * and arrears will be withheld unless the claims assessor manually deletes the default. Arrears will be withheld in all cases except where:

(i)it is clear that the veteran and/or partner were:

(A)continuously in receipt of a service pension throughout the period (ie from the date claim was lodged until the date of the decision); or

(B)in full time employment throughout the period and as such would not have been eligible for a DSS benefit/pension;

or

(ii)the CCPS claims assessor or DP examiner is sure that the claimant and partner would not have been in receipt of any DSS benefit/pension during any of the assessment period.

* Note - the system will continue to allow the examiner to set another reason for arrears to be held - eg "existing overpayment"; "Commission appeal" or "other" (as per current practice - however, only the "DSS clearance" reason will produce the questionnaire and associated request for completion.

17.Where arrears are being withheld it will be necessary to either request information from the client about DSS benefits or, where it is know that the client and/or partner are in receipt of DSS payments, a clearance can be sent to DSS directly.

18.Under the "DSS clearance required" box will be 2 dialogue boxes - "questionnaire to vet" , and "clearance form to DSS".  The system will automatically default to "questionnaire" unless the claims assessor manually changes the default to "clearance form to DSS"  -

☑DSS Clearance required

☑questionnaire to vet

■clearance form to DSS

19.If the questionnaire option is chosen, the letter which is currently sent to the client advising of the decision will be generated.  This letter has been amended and now includes new paragraphs about arrears and includes a request that the client and partner complete and return the enclosed questionnaire (Attachments A, B and C refer).

20.When the questionnaire is returned, if the answer to question one ("have you or your partner received a pension or benefit from the Department of Social Security?") is -

YES→a DSS Clearance form (SA131)* will be despatched to the relevant DSS Regional Office and arrears will continue to be withheld;

→upon return of the clearance, any DSS excess payments will be deducted from arrears withheld and the balance released.  At the same time, the client will be advised of the adjustment amount and rights of review under the SSA (Attachment D refers)

NO→arrears released immediately.

* The DSS clearance forms are currently being revised and new forms should be available shortly.  In the interim, current forms should continue to be used.

21.Where form SA131 has been automatically despatched, the client will be notified as per current practice that further advice about backpayments will be forwarded shortly.  Upon return of the form any relevant adjustments will be made, the balance of arrears released, and client advised as per paragraph 18.

22.To facilitate the speedy release of arrears, it is advisable that all requests for a clearance be transmitted to DSS by facsimile.  (A listing of DSS Regional Offices by postcode and facsimile number has been provided to the previously designated Contact Officer in each State Office.)

Interim Measures

23.The procedures outlined above will require some system modification to CCPS which will not be available on implementation date.  Accordingly, as an interim measure, it will be necessary to produce and despatch the questionnaire or DSS clearance request manually.  The procedures for producing the advice letter, questionnaire, and DSS clearance form have been provided to the Compensation System Support Officers in each State.

Manual

24.The procedures for processing manual cases will mirror procedures outlined above, however, all correspondence will be manually produced.

25.Firstly, the examiner will determine on PIPS if arrears are to be held (as per criteria outlined in paragraph 12).  If arrears are withheld and:

there is no information on file about DSS payments

(i)advice re arrears (Attachments B1 & B2 refer) plus questionnaire (Attachment C) will be sent to the client; and

(ii)upon return, either

• arrears will be released (if the answer is NO - ie not in receipt of DSS benefits); or

• form SA131 will be sent and arrears continued to be withheld, pending return of the clearance; and

• once clearance is returned, arrears will be adjusted, and balance released to the client with advice as per Attachment D.

OR

information exists re DSS payments

• form SA131 will be sent directly to DSS;

• a letter will be sent to the client advising of the decision which also states that further advice about backpayments will be forwarded shortly (as per current practice);

• arrears will continue to be withheld, pending return of clearance; and

• once clearance is returned, arrears will be adjusted, and balance released to the client with advice as per Attachment D.

EVALUATION

26.Currently there are no formal mechanisms in place for the recording and analysis of data regarding adjustments of arrears payable, although most State Offices do make a notation of when the clearance is sought from DSS, when it is returned, and the $amount of the adjustment.

27.To this end a simple program has been developed on Excel for the recording of the following data:

• client's name and file number

• date clearance requested

• date clearance returned

• date arrears released

• total amount of arrears withheld

• amount adjusted for veteran

• amount adjusted for spouse

28.From the above information it will be possible to ascertain the number of cases adjusted within a certain period, what percentage of these adjustments were in respect of the veteran and what percentage in respect of the partner, the total $amount adjusted etc.  In addition, the information stored may be used by State Offices to monitor the time taken for DSS clearances to be processed, and time taken for arrears to be released.

29.It is envisaged that reports will be required by National Office (the Director, Communications, Operations and Review) on an annual basis, at the end of each financial year, with the first report being required at the end of June 1996.

30.A hard copy of the spreadsheet is at Attachment E.  Electronic copies will be provided separately to the previously advised State Contact Officers.  It should be noted that for the purposes of reporting, only completed cases (ie where the clearance has been returned and arrears adjusted) should be listed on the spreadsheet.  Inclusion of uncompleted cases will corrupt the totals and averages.  Accordingly, if it is useful to record outstanding cases on the spreadsheet (eg for monitoring purposes), these will need to be excluded from the calculations at the time of reporting.

CONTACT OFFICERS

31.Any queries relating to the policy aspect of this instruction should be directed to Freda Widawski on telephone (02) 2137487.  Questions in relation to CCPS, including those regarding Attachments A - C, should be directed to the State Compensation Systems Officer.

W.R. MAXWELL

DIVISION HEAD

COMPENSATION

   November 1995

Attachment A

SUGGESTED WORDING/QUESTIONNAIRE REQUESTING INFORMATION RE DSS PAYMENTS

- for inclusion with advice of grant/increase of DP; grant of war widow/er pension

"In order for the Department to correctly calculate the amount of backpayment of pension owing to you, information is required about benefits or pensions that you or your partner may have received or are currently receiving from another Department.

Would you therefore please complete the attached questionnaire and return it to the above address, as soon as possible to enable us to release your arrears. "

Attachment B1

SAMPLE SUGGESTED LETTER - REQUESTING INFORMATION RE DSS BENEFITS (grant or increase of disability pension).

<e>>

<s>>

<n>>  <e>>  <e>>

<e>>

YOUR FILE NUMBER IS N <o>>

Dear <n>>

I am writing to let you know that due to your recent grant/increase of disability pension, arrears for the period from ../../.. to ../../.. are currently being withheld pending further information relating to any pensions or benefits you or your partner may have received from the Department of Social Security.

To assist in this regard, would you and your partner kindly complete the attached questionnaire and return it to this office, at the address above as soon as possible.

If both of you are not or never have been in receipt of any pension or benefit from the Department of Social Security, the arrears of disability pension will be released and paid in addition to your pension on the next available pension payday, after the questionnaire is received at this office.

If either of you have been in payment of pension or benefit, we will contact the Department of Social Security to ensure that any excess payment is deducted from your arrears.

Thank you for your co-operation in this matter.  A reply paid envelope is enclosed for your convenience.  If you have any further questions in relation to this matter please contact this office at the address and phone number shown above.

Your sincerely

<k>>

for Deputy Commissioner

Attachment B2

SAMPLE SUGGESTED LETTER - REQUESTING INFORMATION RE DSS BENEFITS (grant of war widow/er pension).

<e>>

<s>>

<n>>  <e>>  <e>>

<e>>

YOUR FILE NUMBER IS N <o>>

Dear <n>>

I am writing to let you know that due to your recent grant of war widow/er pension, arrears for the period from ../../.. to ../../.. are currently being withheld pending further information relating to any pensions or benefits you or your partner may have received from the Department of Social Security.

To assist in this regard, would you and your partner kindly complete the attached questionnaire and return it to this office, at the address above as soon as possible.

If both of you are not or never have been in receipt of any pension or benefit from the Department of Social Security, the arrears of war widow/er pension will be released and paid in addition to your pension on the next available pension payday, after the questionnaire is received at this office.

If either of you have been in payment of pension or benefit, we will contact the Department of Social Security to ensure that any excess payment is deducted from your arrears.

Thank you for your co-operation in this matter.  A reply paid envelope is enclosed for your convenience.  If you have any further questions in relation to this matter please contact this office at the address and phone number shown above.

Your sincerely

<k>>

for Deputy Commissioner

Attachment C

QUESTIONNAIRE - DSS PENSIONS OR BENEFITS

The information provided is required to correctly calculate the amount of backpayment of pension owing to you or your partner.  The authority to obtain this information is contained in Section 128 of the Veterans' Entitlements Act 1986.  If either of you are, or have been in receipt of a Department of Social Security pension at any time since you lodged your claim for disability pension or war widow/er pension, then some information will be disclosed to that Department for the purpose of matching information.

Please answer with a tick ☑ in the boxes provided;

1.  Have you or your partner received a pension or benefit from the Department of Social Security since  --/--/-- ?

You:☐ YES  (go to question 2)☐ NO

Your partner:☐ YES  (go to question 2)☐ NO

If you have answered no to both sections of Question 1, please sign and return the questionnaire.

2.  Please tell us your Department of Social Security reference number and the office you use;

DSS Reference Number(s)DSS Office(s)

You:___________________ — ____________________

Your partner:___________________ — ____________________

3.  For what period(s) were you paid a pension or benefit ?

You From       /     /19       to       /     /19 From       /     /19       to       /     /19 From       /     /19       to       /     /19

Your Partner From       /     /19       to       /     /19 From       /     /19       to       /     /19 From       /     /19       to       /     /19

(please attach a separate statement if further space is required)

4.  Please tell us what type of pension(s) or benefit(s) you and/or your partner have  received?

YouYour partner

_______________________ — _______________________

_______________________ — _______________________

_______________________ — _______________________

I declare that my answers to the above questions are true and correct in every aspect.  I am also aware that there are penalties for providing false and misleading information or for not providing information when requested by an officer of the Department of Veterans' Affairs.

Your signature_________________________  Date___/___/19___

Partner's signature_________________________  Date___/___/19___

Attachment D

SAMPLE SUGGESTED LETTER -ADVISING OF ARREARS ADJUSTMENT

<e>>

<s>>

<n>>  <e>>  <e>>

<e>>

YOUR FILE NUMBER IS N <o>>

Dear <n>>

Your pension arrears were withheld pending a clearance from the Department of Social Security.

Information has now been received from that Department enabling me to dispose of the pension arrears as follows:

	veteran	partner
Total Pension Arrears for the period to	<t>>
Less Adjustment from Social Security for the period to	<t>>	<t>>
Balance of Pension Arrears	<t>>

(A) This amount will be credited into your bank account on payday

(B) A cheque for this amount will be forwarded shortly.

Right of review

If you are not satisfied that the amount used to adjust your disability pension arrears represents an accurate calculation of the amount received from DSS, you may apply under the Social Security Act for a review of that calculation by DSS.  For further information contact your local DSS office.

Yours sincerely

Payments Officer

Attachment E

ARREARS ADJUSTED SCHEDULE

Note: This schedule has been modified slightly to suit The General

										STATE:	NSW
										PERIOD:	From	To
											01/10/95	01/11/95
				CLEARANCES					ARREARS
	Name	DVA	Date		Date	Clear	Date	Out	Amount	Adjusted	Adjusted	Total		% of
		File No	Sent		Returned	days	Released	Days	Withheld	Veteran	Partner	Adjusted		Total
1	WILLIAMS, John	X1223456	02/10/95		12/10/95	10	19/10/95	7	$20,000.00	$7,845.50	$5,640.00	$13,485.50		67%
2	SMITH, Mary	X0234789	03/10/95		20/10/95	17	24/10/95	4	$1,300.00	$300.00	$0.00	$300.00		23%
3	BROWN, Jean	X345789	04/10/95		17/10/95	13	22/10/95	5	$5,400.00	$2,256.70	$2,256.70	$4,513.40		84%
4	JAMES, Trevor	X014599	10/10/95		20/10/95	10	30/10/95	10	$256.00	$130.00	$0.00	$130.00		51%
5	HUGHES, John	X1238767	10/10/95		18/10/95	8	25/10/95	7	$12,900.00	$2,689.00	$2,689.00	$5,378.00		42%
6	SARAVANA, J	X089777	11/10/95		27/10/95	16	31/10/95	4	$5,789.00	$789.00	$0.00	$789.00		14%
7						0		0				$0.00		#DIV/0!
8						0		0				$0.00		#DIV/0!
9						0		0				$0.00		#DIV/0!
10						0		0				$0.00		#DIV/0!
11						0		0				$0.00		#DIV/0!
12						0		0				$0.00		#DIV/0!
13						0		0				$0.00		#DIV/0!
14						0		0				$0.00		#DIV/0!
15						0		0				$0.00		#DIV/0!
16						0		0				$0.00		#DIV/0!
17						0		0				$0.00		#DIV/0!
18						0		0				$0.00		#DIV/0!
19						0		0				$0.00		#DIV/0!
20						0		0				$0.00		#DIV/0!
	TOTAL					74		37	$45,645.00	$14,010.20	$10,585.70	$24,595.90		54%

arrears adjusted schedule

STATE:

NSW

PERIOD:

From

To

01/10/95

01/11/95

Summary
	Formulas

Total number of cases in the period	6	manually entered
Total $ amount of arrears witheld	$45,645.00	sum of "amount witheld" column
$ amount of arrears adjusted for veteran	$14,010.20	sum of "adjusted veteran" column
$ amount of arrears adjusted for partner	$10,585.70	sum of "adjusted partner" column
Total $ amount of adjustment	$24,595.90	sum of "total adjusted" column
% of total arrears adjusted	54%	sum of "total adjusted", divided by sum of "arrears witheld"
% of total arrears adjusted for veteran	31%	sum of "adjusted for veteran", divided by sum of "arrears witheld"
% of total arrears adjusted for partner	23%	sum of "adjusted for partner", divided by sum of "arrears witheld"
Average number of days for clearances to be processed	12	total number of "clear" (ie clearance) days, divided by number of cases
Average number of days for arrears to be released from date of return of clearance	6	total number of "out" days - ie days from date clearance returned to date arrears released, divided by number of cases

Signature: Position: Date: