DATE OF ISSUE: 18 NOVEMBER 1991
PATIENT CONTRIBUTION & PHARMACEUTICAL ALLOWANCE: CHANGES TO PHARMACEUTICAL BENEFITS SCHEME (PBS) &
INTRODUCTION TO REPATRIATION PHARMACEUTICAL BENEFITS SCHEME (RPBS)
INTRODUCTION
The purpose of this instruction is to advise staff of changes announced in the 1991 Budget in respect of prescription items obtained under the Repatriation Pharmaceutical Benefits Scheme (RPBS). The initiative introduces the Patient Contribution and corresponding Pharmaceutical Allowance (PA) to all Personal Treatment Entitlement Card (PTEC) and Specific Treatment Entitlement Card (STEC) holders.
BACKGROUND
2. In November 1990, a Patient Contribution of $2.50 per prescription item was introduced for service pensioners using a Pensioner Health Benefit Card (PHB) or the Service Pensioner Benefit Card (SPBC), and for war widows and orphans using the Dependant Treatment Entitlement Card (DTEC), to purchase pharmaceuticals under the Pharmaceutical Benefits Scheme (PBS). Previously these items were supplied free of charge. The Patient Contribution is indexed annually and from 1 October 1991 it was increased to $2.60.
3. To offset the Patient Contribution the PA was introduced. The allowance was introduced at $2.50 per fortnight for married service pensioners and $5.00 per fortnight for war widows, orphans and single service pensioners. The allowance is indexed in line with the Consumer Price Index (CPI) and was increased to $2.60 and $5.20 per fortnight from payday 3 October 1991.
4. A safety net, which is also indexed, was introduced to ensure that no one pays more for prescription items, by way of a Patient Contribution, than the annual total of the PA.
CHANGES
5. The 1991 Budget introduced similar changes to the RPBS.
6. From 1 January 1992, veterans who have a yellow PTEC or a white STEC card will have to pay a Patient Contribution of $2.60 for each prescription item purchased under the RPBS. Currently these veterans receive their prescription items free.
7. To offset the Patient Contribution a PA of $5.20 per fortnight will be extended to PTEC and STEC holders from payday 26 December 1991.
8. A safety net will operate to provide protection for veterans and their families who are chronically ill. The safety net limit will be reached after the veteran and the family together have paid for the equivalent of 52 concessional prescription items ($2.60 each) in a calendar year. After the safety net limit has been reached prescription items will be free of charge for the rest of the calendar year. A separate instruction containing details of how the safety net operates will be issued later.
ELIGIBILITY
9. This Budget initiative will extend eligibility for the allowance to any person who is eligible to be provided with treatment under ss85(1) to ss85(4) inclusive, ss85(6), ss85(7) or ss85(11) of the Veterans' Entitlements Act (VEA), or under reg 26 of the Seamen's War Pensions and Allowances Act (SWPA). Eligibility will also be extended to those Commonwealth veterans who have a PTEC or STEC card because of an accepted disability in another country even though they have no eligibility under the VEA.
10.The proposal affects veterans in three different categories:
a.PTEC and STEC holders who are not currently in payment (of any pension) with DVA;
b.PTEC and STEC holders who are recipients of Disability Pension but who do not receive a Service or War Widows Pension; and
c.PTEC and STEC holders who are also in receipt of Service Pension or War Widows Pension.
PAYMENT ARRANGEMENTS
11. The PA will be paid by fortnightly direct credit to a nominated account. The guidelines which apply in relation to cheque payment for pensions will also apply for those veterans whose only payment will be the PA.
12. It will be necessary to collect account details for the group of veterans who are not currently in receipt of any payment from the Department. The mail out for this data collection exercise took place on the 30 September 1991.
13.Detailed procedures for the data collection exercise are contained in Attachment A.
14.Current STEC and PTEC card holders who do not presently receive a payment from the Department will be eligible for PA from 26 December 1991, providing they supply payment details to the Department by 30 June 1992. Should a veteran provide payment details after the data collection exercise has been completed, the allowance will have to be put into payment manually ( i.e. using a General Purpose Coding Sheet or D408).
15.Any current STEC or PTEC holder who does not presently receive a payment from the Department and who provides payment details on or after 1 July 1992, shall be granted PA effective from the payday after the date on which payment details are provided to the Department.
16.An automatic run to initiate payment for those clients who have returned their form within the data collection period, will take place on the weekend of 7/8 December 1991.
17.The run on 7/8 December will also generate the automatic payment of PA to Disability Pension only clients with STEC/PTEC eligibility. All Disability Classifications (eg. Disability Grants, Variations, Transfers In etc) must be out of Frozen Status by close of business on 6 December 1991. Any case in PY or SB status on 7 December 1991, will not be granted PA automatically from 26 December 1991, and will have to be put into payment manually.
18.If a Veteran gains STEC or PTEC eligibility after 26 December 1991 and is not already in receipt of PA, the effective date for granting PA will be:
a.the date from which disability pension is granted or would have been granted if of a pensionable degree; or
b.the payday after the date from which a veteran is eligible to be provided with treatment in all other cases where there is STEC or PTEC eligibility and the veteran receives no other payment from the Department (e.g. POW, WW1 Veterans, Malignant Neoplasia patients etc); or
c.26 December 1991, whichever is the later.
19.Payment of the allowance will be made to Disability Pension only clients who are overseas or who have an unknown address, provided their disability pension is still in payment. Payment of the allowance will also be made in the case of a part or total limitation, but not where Disability Pension is suspended.
20.There will be no payment change for those PTEC and STEC holders (i.e. service pensioners and war widows who are female veterans in their own right), who are already in receipt of PA.
RATE OF PHARMACEUTICAL ALLOWANCE
21.Section 118JB of the Veterans' Entitlements Act specifies the rate of PA payable to an eligible person. This section is to be amended as a result of the 1991 Budget initiative.
22.All payees eligible for the PA will be paid at the rate of $5.20 per fortnight with the exception of a person who is a service pensioner with a partner and not an illness separated or respite care couple, provided the partner is a person to whom PA is payable under the VEA or the SSA. These clients will be paid at the rate of $2.60 per fortnight, while their partner will normally be paid $2.60 also. The table at Attachment B summarizes the rates of PA payable for all partner payee combinations.
23.A veteran who is eligible for the allowance from both DVA and DSS can only be paid PA by one Department. This will normally be DVA although current STEC/PTEC holders with no DVA pension, but who are paid a DSS pension or benefit, effectively have the option of chosing which Department is to pay their PA. If the form is not returned to DVA, PA will not be granted by this Department and it will continue to be paid by DSS.
24.If an STEC or PTEC holder is receiving the allowance from DSS and applies to have the allowance paid by DVA as part of the data collection exercise, DSS will cancel the allowance for both the veteran and his/her spouse. The veteran will then be paid PA at the single rate of $5.20 per fortnight by this Department.
25.After the data collection exercise has been finalised, it will be necessary to apply normal DSS clearance procedures on any future grants of PA. This will ensure that dual payments of the allowance are not made to clients with eligibility from both Departments.
26. Any current Disability Pension only veterans who are automatically granted PA by DVA on 26 December 1991, will automatically have their PA cancelled by DSS if they are presently paid PA by that Department. DSS will also cancel PA for any partners of these veterans, as the allowance will be paid to the veteran, at the rate of $5.20 per fortnight, by DVA.
ADVANCES
27.Last year, a system of advance payments of PA was introduced to assist those pensioners with limited means who require high levels of medication under the PBS. Advances were available to any pensioner who had used more than 20 prescription items before 21 March 1991. Further advances were available to these people if they used more than 14 items in the next three months. The advance payments scheme precludes from eligibility anyone whose income, apart from pension, is greater than $20 per fortnight or who has liquid assets in excess of $1000. Under existing legislation, the current scheme of advance payments of PA operates only until 31 December 1991.
28.A modified advances scheme for the PBS has been extended for a further two years. A number of changes have been made to the scheme in order to simplify the system and from 1 January1992, the scheme will operate as follows:
a. advances will be paid in lump sums and will be the lesser of;
.seven times the current fortnightly instalment; or
.the balance of PA which is payable for the year (i.e. the sum of the unpaid fortnightly instalments).
b.advances will be payable on application where income other than pension is less than $20.00 per fortnight for a single pensioner and below $40.00 per fortnight for a couple; and
c.where:
.the application for advance is lodged prior to the first pension payday for the calendar year; or
.the application for advance is lodged with or after an application for pension or treatment but prior to being granted; or
.as at the date of application and while in receipt of PA, the person has already spent an amount on PBS prescriptions in the current calendar year equal to the amount of PA that they have been paid in that year.
29.This approach will mean that clients can come on and off the advance payment system as their pharmaceutical usage goes up and down and will always be eligible for an advance if they have not received a full year of PA.
30.A similar advance payments scheme will also apply to STEC and PTEC holders who are entitled to pharmaceuticals under the RPBS. However, because veterans who have an entitlement to pharmaceuticals under the RPBS do so by way of compensation for service related disabilities, it is not considered appropriate that they be out of pocket for pharmaceutical items, even in the short term. Therefore, the income test aspect for advance payment of PA will not apply to those clients entitled to RPBS pharmaceuticals, i.e. STEC and PTEC holders.
31.War widows will also qualify for lump sum advances free of the advance payment income test because of the compensatory nature of their pensions.
32.PA advances can be paid automatically using the current Pension Information Processing System (PIPS) screen (PY.LP) for all cases where a payment is made through PIPS. The system will not permit automatic payment of a PA advance to those veterans who are PTEC or STEC holders and who are not in receipt of any other payment from the Department. It will be necessary to pay advances manually to these clients. A separate instruction containing procedures for the manual payment of advances, will be issued later.
INDEXATION
33.SPBC, PHB and PBC card holders have been required to pay a patient contribution of $2.50 for each prescription item purchased under the PBS. From 1 October 1991, this charge was increased to $2.60.
34.PA was paid at the rate of $2.50 per fortnight for married service pensioners and $5.00 per fortnight for single service pensioners and war widows. From payday 3 October 1991, PA was increased to $2.60 and $5.20 per fortnight respectively.
35.The statutory increase processing run to apply indexation increases to existing PA payments occurred on the weekend of 13/14 September 1991.
36.Under existing legislation, the Concessional Beneficiary Charge is indexed on 1 October each year, using the March reference quarter. The PA is indexed on the first available payday after 20 September each year, also using the March reference quarter. The Concessional Beneficiary Safety Net, which was initally set at $130, representing 52 times the charge, is indexed on 1 January each year using the September reference quarter. This presents a problem in that the safety net will not equal the annual allowance at the first indexation.
37.It is proposed to align the indexation of the Concessional Beneficiary Charge under the National Health Act 1953 (NHA) and the PA under both the Veterans' Entitlements Act 1986 (VEA) and the Social Security Act 1947 (SSA) with the Concessional Beneficiary Safety Net (NHA) on 1 January each year.
38.It is also proposed to change the basis for calculating the safety net so that it is defined as representing 52 times the value of the charge.
39.Subject to the legislation being approved by Parliament, the September and October 1992 indexation of the allowance and charge will be deferred to
1 January 1993. The indexation increases for the charge, allowance and safety net will then be effective at the same time.
ADVICES
40.A major publicity mail out will be made to all STEC and PTEC holders in December. The mail out will provide details of the grant of PA as well as preprinted material on the patient contribution and the operation of the safety net.
41.Any veteran who becomes eligible for an STEC or PTEC after 6 December 1991 and who does not receive any other payment through PIPS will have to be given a manual advice. It will not be possible to automatically advise these clients of a grant of PA ONLY until payments are linked to PIPS.
TAXATION
42.PA is a compensatory payment and is not taxable.
43.STEC and PTEC holders who are paid PA and receive no other payment from the Department will be exempt from providing Tax File Numbers to the Department.
ONGOING PROCEDURES FOR NEW GRANTS OF PA, CANCELLATIONS AND TRANSFERS IN & OUT
44.After the initial grant of PA, all new grants and Transfer Ins of PA ONLY will have to be coded onto the Payment Master File (PMF) via keyfast (i.e. by using a General Purpose Coding Sheet or D408). It will be part of the examiners' procedures to ensure that PA is coded onto the PMF where STEC or PTEC eligibility is gained and no other payment is made.
45.A fortnightly data extract run will identify any cases where STEC/PTEC eligibility has been gained and no other payment is to be made. These cases are those where a disability has been accepted but of nil pensionable degree, or where treatment eligibilty extends from POW, WWI status etc. It will be the responsibility of the Benefits area to ensure that PA is paid to these clients.
46.If a PA ONLY client loses eligibility for that payment (e.g. deaths, transfers out etc.), a keyfast transaction must be coded to delete the PA payment from the PMF. It will become part of the examiners' procedures to ensure that the PA payment is deleted from the PMF.
47.Any client receiving a PIPS payment (e.g. service pension), who loses eligibility for that payment on PIPS will also have their PA cancelled. If the client is still eligible for PA because of STEC or PTEC eligibility, it will be necessary for an examiner to code PA onto the PMF via keyfast. This may involve a rate change if a veteran and his spouse were formerly being paid PA at the married rate.
48.For clients who can be processed through PIPS there will be no change in the processing of PA. Changes will be made to automate PA for DP only clients in the same way as is currently done for war widows, orphans and SP recipients.
49.It is anticipated that PA ONLY payments will be linked to PIPS shortly after the data collection exercise has been completed. Until this happens, the procedures detailed above must be followed when processing PA ONLY payments.
50.Once a PA ONLY payment has been cancelled, there will be no on line record of the client payment details. The payee listings will include PA ONLY clients and can be used to check past payment details.
RECOVERY
51.PA is not to be included in the assessment of bereavement payments. If a client dies, or pension is cancelled before a limitation of an advance has been finalised, the balance of that advance should be disregarded.
52.A separate instruction will be issued on PA overpayments.
PETER HAWKER
NATIONAL PROGRAM DIRECTOR
BENEFITS
NOVEMBER 1991
ATTACHMENT A
PROCEDURES FOR THE DATA COLLECTION OF PA ONLY CLIENTS
It will be necessary to collect payment details for the group of veterans who are presently not in receipt of any payment from the Department but who are to receive PA as a result of the Budget initiative.
2.This will be achieved through the data collection mail out which commenced at the end of September and a Branch processing exercise during the period 30 September 1991 to 6 December 1991.
3.There are approximately 43000 veterans nationally who are holders of a STEC or PTEC and who currently receive no payment from the Department. Of this group, a PA Payment Form and letter will not be sent to those veterans:
who have a date of death recorded on the Client Data Base (CDB);
who have an overseas address;
whose address is unknown;
who have a Card Stop indicator set; or
whose name appears on the Duplicates File.
4.With the exclusion of those cases listed above, the number of data collection letters sent in September was 18166. The number of clients for each State is:
NSW — 5571
VIC — 5282
QLD — 3000
WA — 2177
SA — 1714
TAS — 422
TOTAL — 18166
5.The data collection mailout took place on 30 September 1991. Claims Management System (CMS) cases (classification type 'Pharmaceutical Allce') in Form Sent stage will be automatically generated for these veterans.
6.The data collection form asks for the veteran's date of birth, account details for payment of PA as well as the veteran's DSS Reference Number and type of DSS payment, if paid by that Department. A copy of the data collection letter is at Attachment C and the data collection form at Attachment D.
7.STEC and PTEC holders who are currently paid PA by DSS can continue to have their PA paid by that Department. Only those veterans who provide payment details to DVA will be paid PA by this Department. A tape will be sent to DSS at the end of the data collection exercise so that PA payments can be stopped for those veterans (and their spouses) who provide payment details to DVA.
8. As the data collection forms are received it will be necessary to record the veteran's payment details onto the data collection screen. There will be a new CMS facility of 'PHARM ALLOW DATA COLL' (CM.PH) for recording the veteran's payment details and DSS particulars. An example of this screen is at Attachment E. This screen has been available for update from Monday 30 September 1991.
9. A number of CMS stages will exist for processing and to facilitate monitoring of the progress of the data collection exercise. These stages will be FORM SENT, AWAIT RECORDING, RECORDING, WITHDRAWN and FINALISED.
10.The allowable movement between stages will be:
11.When the data collection forms are returned it will be possible to record the payment details directly onto the data collection screen without first having to change the CMS stage from FORM SENT to AWAIT RECORDING.
12.To optimise resource planning and monitoring throughout the data collection period, it may be preferrable to immediately place all replies into AWAIT RECORDING status (by accessing CM.SC) to distinguish these cases from those where the form has not yet been returned. This decision will largely depend on the size of the State and the availability of resources.
13.The veteran's file number, name, address, name check and date of birth will default from the CDB to the CMS data collection screen. It will be possible to change these details (excluding the veteran's file number) on the data collection screen without accessing Client Registration.
14.If the date of birth provided on the form is different to that recorded on the CDB, it will not be necessary to investigate which one is correct. The date of birth provided on the form should be entered on the PH screen; this will then be used to update the CDB.
15.Where the veteran has indicated that he/she is in receipt of a Social Security payment, the DSS particulars to be recorded are:
.DSS reference number:- a maximum of ten characters can be recorded in this field. If the reference number is unknown, the letter 'U' (for unkown) should be entered in the field; and
.Type of Benefit:- 'P' should be entered where the payment is a pension and 'B' should be entered if the payment is a Benefit. It will also be possible to enter a 'U' if the payment type is unknown.
16.The following payments are made by DSS:
PENSIONS BENEFITS
Age Pension Job Search Allowance
Invalid Pension — Newstart Allowance
Disability Support Sickness Benefit
Wife Pension — Sickness Allowance
Carer Pension — Special Benefit
Sole Parent Pension — Unemployment Benefit
Widowed Person's Allowance
Widow B Pension
Sheltered Employment Allowance
Rehabilitation Allowance
17.The veteran's payment details are to be recorded as for the PP.PY facility (i.e. it will be necessary to enter a suffix, method of payment, direct credit code, account number and account title).
18.If an error is made or the veteran provides new account details, it will be possible to change the recorded information on CM.PH, as long as the case is in RECORDING status. This can be done by over-typing the recorded information on CM.PH. If it is necessary to delete the record in its entirety, the case should be withdrawn and a further CMS registration should be created manually, if required.
19.A case will be in RECORDING status when the payment details are data collected. The completion of CM.PH automatically sets the case to RECORDING stage.
20.An audit trail will record the log on ID of the last officer to update the data collection screen. This will be listed on a report and made available to the States when the automatic run to initiate payment is made on 7/8 December 1991.
21.Supporting documentation will not be produced for this exercise. However, should a screen dump of CM.PH be required, it can be generated using the normal print facility.
22.The data collection forms will need to be sorted into file number sequence or alphabetical order and stored in an appropriate area so that DSS and client enquiries can be answered. The forms will also need to be kept for overpayment purposes.
23.An automatic 'run' to initiate payment for those clients who have returned their data collection form will take place on the weekend of 7/8 December 1991. The run will automatically set all cases in RECORDING status to FINALISED.
24.It is essential that all completed and returned forms be fully data collected by close of business on 6 December 1991, to ensure the automatic payment of PA from 26 December 1991. Any case which has not been data collected by this date will have to be put into payment manually, via keyfast.
25.If a data collection letter is returned 'unclaimed', the CMS registration should be immediately withdrawn by accessing CM.SC. It will not be necessary to investigate the veteran's whereabouts, however, the correspondence should be referred to the appropriate area(s) to have the address changed to 'address unknown' and a card stop indicator set.
26.Should the form be returned with a notification of death, the CMS registration must also be withdrawn and the case referred to the appropriate area for death action.
27.If a data collection form is returned with an amended address, appropriate change of address action should be taken. Should a form be returned with an interstate address, a check should be made to ensure that the procedures outlined in point 27 of this attachment have been followed and the veteran's payment details are not already data collected in another State.
28.Should a case be withdrawn in error, a replacement CMS registration can be created. This will be possible by using the 'CLASSIFY PENSION' (CM.CP) facility which will have a selection of 'PHARMACEUTICAL ALLCE' for the duration of the data collection exercise. This function is temporary and will be removed after the bulk run to grant PA.
29.Where an Interstate Transfer occurs during the data collection exercise (30 September to 6 December), it will be necessary to withdraw the existing CMS case in the out-going State, and to create a new CMS registration in the State to which the veteran is transferring. The out-going State should provide payment details for any case which has been data collected (even though these may no longer be current) and should also send the PA Payment Form with any transfer documents. The in-coming State should send a PA letter and form in all cases where the client had not returned the form to the out-going State. Normal data collection procedures can then be followed for these cases.
30.A second data access extract is planned as soon as possible to identify those PTEC and STEC holders who have gained eligibility since 23 September 1991, when the first data collection cases were identified. A state specific report will be made available to the Branches shortly thereafter. It will then be necessary for the Branches to take manual action to create the CMS registration and issue a data collection letter and form to the veteran. This should be done immediately the information becomes available to maximise the time available for data collecting these cases. It is important to remember that any case which has not been fully data collected by close of business on 6 December 1991, will have to be put into payment manually via keyfast.
31.After the bulk run to grant PA on 7/8 December 1991, all CMS cases still in FORM SENT status are to be withdrawn. It is yet to be decided whether this will be done manually in the States, or whether a program will be written to withdraw these cases automatically. This will depend largely on the number of cases involved.
32.This automatic run will generate transactions to apply the payment to the PMF. No transactions will be generated for clients whose eligibility has been lost since the recording of the payment details. (i.e. clients who have died, transferred out etc.).
33.Normal CMS reporting facilities will be available for monitoring the data collection exercise. It is not anticipated that manual statistics will be required.
34. Normal edit transaction reports will be produced for any transaction which fails the initial bulk grant of PA . Any subsequent grants, cancellations or transfers of PA will have the normal interface edit/update reports produced.
35.A PA processing timetable is at Attachment F.
ATTACHMENT F
TIMETABLE
13/14 Sept — Automatic 'run' to apply indexation increases to existing PA payments
23 Sept — Data Access Extract to select cases for data collection
28/29 Sept — CMS case created on the new facility - status FS
30 Sept. Data collection mail out to the veterans listed
. States to commence PA data collection
Nov*. Data Access Extract to identify STEC and PTEC holders who
have gained eligibility since 23 Sept
. Data Access Extract will be run fortnightly thereafter until PA ONLY is linked to PIPS
Nov*. Report to States of those cases requiring manual CMS creation and manual issue of PA form and letter
. States to register these cases and manually issue letters & forms
25/26 Nov — Advices Extract for service pensioners, war widows and disability pensioners with STEC/PTEC eligibility
4 Dec *Mail out of PA payment advice and publicity brochure to Service Pensioners, War Widows and Disability Pensioners with STEC/PTEC eligibility
6 Dec. All cases to be fully data collected on CM.PH (i.e. to be in RECORDING status)
. Any new cases to be fully data collected on CM.PH
7/8 Dec — Automatic 'run' to occur, to initiate payment of PA to all eligible payees not already receiving it
9 Dec — Advices Extract for data collection cases
11 Dec *Mail out of PA payment advice and publicity brochure to PA ONLY clients
26 Dec — Payment of PA commences to all STEC and PTEC clientswho were not previously receiving the allowance
* Dates subject to confirmation