DATE OF ISSUE: 22 March 1993
1992/93 BUDGET REFORMS TO RENT ASSISTANCE: SYSTEMS ASPECTS
TABLE OF CONTENTS
PAGE
2 — PURPOSE
2 — BACKGROUND
2-3 — CONVERSION
3 — CUT OFF DATES FOR TRANSFER-INS AND NEW
GRANTS
3 — RETROSPECTIVE PAYMENTS
4 — AUTOMATIC ADJUSTMENTS
4 — PREVIOUSLY SAVED CASES
4-6 — MANUAL ADJUSTMENTS
. cases not saved at conversion
. single to a member of a couple
. couple separate
. variation in number of dependant children
. reassessment or grant prior to 20 March 1993
. recording rent less than $50.00/fortnight (combined for couples)
. reinstatement
6 — CENTRAL OFFICE CONTACTS
PURPOSE
This DI is supplementary to the DI on the '1992/93 Budget Reforms to Rent Assistance : Procedural Changes', and covers the Systems applications of these changes.
BACKGROUND
2.The Government announced changes to the way in which rent assistance is assessed in the 1992/93 Budget.
3.From 1 April 1993 the existing single rent threshold will be changed to four new thresholds as follows :
.60/fortnight (i.e. $1560/year) for single pensioners without children;
.$80/fortnight (i.e. $2080/year) for single pensioners with children;
.$100/fortnight (i.e. $2600/year) for couples without children; and
.$120/fortnight (i.e. $3120/year) for couples with children.
4.These four new rent thresholds will be indexed every 6 months in conjunction with other CPI pension adjustments, commencing September 1993. Other major changes are outlined below.
5.Maximum amount of assistance. The maximum amount of rent assistance payable to single pensioners without children will be increased by $4.00 over and above any indexation adjustment as a "one off" increase.
6.Rate of assistance. The rate of assistance above the applicable rent threshold will increase from 50 cents per dollar to 75 cents per dollar of rent paid up to the maximum amount payable.
7.Savings provisions. A savings provision is to be provided for clients who currently receive rent assistance and would otherwise be reduced under the proposed changes. (Details of the savings provisions are provided in the Administrative Procedures DI.)
CONVERSION
8.All cases on the system will be converted automatically on the weekend of 13/14 March 1993.
9.Pensioners who would receive an equal or greater amount of rent assistance under the new rules will not be saved.
10.The system's rates segments structure will be modified to reflect the new thresholds, the new supplementation rate and the increase for single pensioners without children.
11.The PIPS Home screen (PP.HO) will be amended to replace the '89 Saved Amount' field with '93 Saved Amount'. This change will also be reflected in the General Inquiry and Trial screens.
12.The '89 RASAV' field on Trial will be replaced with '93 RASAV'. The edit for this field will be changed to allow entries of 0 - $63 (previously $30 was the maximum allowed). However, where manual entry of a saved amount is required for Boarders and Lodgers previously saved under the '89 savings provisions, the $30 upper limit still applies.
13.Manual adjustment of the saved rate can be made on the Home screen.
Cut Off Dates for Transfer-Ins and New Grants
14.As conversion was scheduled to take place on the weekend of 13/14 March 1993, Branches were advised that the details relating to service pensioners transferring in from any of the other States would need to be recorded on the system by cob Thursday 11 March 1993 to ensure they are automatically included in the conversion process. If the details were not entered by this date, manual action would be required to calculate and store a saved rate of rent assistance where applicable. The earliest date this manual action could commence is 15 March 1993.
15.Similarly, Branches were advised that any new grants of rent assistance would need to be recorded on the system by cob Thursday 11 March 1993. The new rent assistance rules will apply to pensioners granted rent assistance after the effective date of 20 March 1993. Therefore, if rent assistance is granted between 12 March 1993 and 19 March 1993 inclusive, manual entry will be required to calculate and store a saved rate on the system.
Retrospective Payments
16.The Trial screen will visually show 93 RASAV, however, for new grants and reassessments, the System has been designed to calculate and grant payments using the rules in force both pre and post 20 March 1993.
17.This also means that where a grant is retrospective, and the assessment pre 20 March 1993 results in a rent assistance amount which is greater than the amount calculated post 20 March 1993, the pensioner is entitled to be saved at the higher rate.
Automatic adjustments
18.The following adjustments are automatic:
.where rent falls below $50.00/fortnight (combined for couples), the saved status will be deleted;
.where the application of the income and assets test will result in a reduced saved amount (refer Attachment A);
.where a pensioner changes accommodation, saved status will be deleted;
.where a single pensioner is granted or increased to a disability pension of 100% or greater, saved status will be deleted; and
.where any member of a couple are granted or increased to Extreme Disablement Adjustment (EDA) or above, saved status will be deleted.
Previously saved cases
19.Boarders and Lodgers (currently saved from the 2/3 rule) will no longer continue to be exempt from this rule.
20.At the time of the system changes, a comparison will be made against the rate payable pre 20 March 1993 under the old rules (which includes the exemption from the application of the 2/3 rule) and the assessed rate post 20 March 1993 under the new rules. The higher rate payable will apply and will therefore determine status i.e. saved or assessed under new rules. As the exemption from the 2/3 rule will no longer apply, the rate assessed under the new rules will be calculated using the 2/3 rule on their rental as well as the new thresholds.
21.The savings provisions relating to residents of retirement villages who are ineligible property owners continues to apply, however, an earlier system fault allowed payment of rent assistance where rent fell below $50.00 per for fortnight (combined for couples) to some of these pensioners. This error has now been amended and will result in some retirement village pensioners losing their rent assistance. Nationwide the number of pensioners is 5. These pensioners advice letters will be suppressed and a manual letter issued from Central Office advising of the cancellation. No overpayment will be raised for these pensioners.
MANUAL ADJUSTMENTS
22.In addition to the cases described in paragraph 14 -16, other manual adjustments on the system are described in paragraphs 23 - 29.
23.Cases not saved at conversion (on 13/14 March), due to temporary absence from their usual place of residence (eg. separated medical, respite care couples, or overseas) will require manual adjustment to calculate and store the saved rate on their return to their normal rented premises. These pensioners are entitled to be saved, if they are better off under the
pre 20 March 1993 rules, but only if they resume occupancy of their normal accommodation within a statutory limitation period of 42 days from the date of vacation. Extensions beyond this period are discretionary.
24.Where a pensioner changes from a single to a member of a couple, the saved status will continue at half the saved rate for each member but only where assessment under the new rules will disadvantage them. If both members of a couple had a prior saved rate, the higher of the two rates is to be divided between them.
25.If a saved couple separate, then each individual would retain only their portion of the frozen rate unless the assessment under new rules will result in a greater amount payable e.g. If saved at $60 combined, each will carry saved $30 with them to their new accommodation. If this couple then reunite, they are not entitled to retain their combined saved amount.
26.If the number of dependent children in a family varies (which would result in a reduction in saved rent assistance), Branch officers will need to recalculate the saved rate using the pre 20 March 1993 rules and a new saved rate will apply. The system will need to be adjusted to reflect the new rate. (Please note that whilst there can be a reduction, there can be no increase to the saved rate),
27.Where there is a reassessment or grant prior to 20 March 1993 which would result in a higher rent assistance amount under the old rules, manual system adjustment is also required.
28.If a pensioner pays less than $50.00 rent per fortnight (combined for couples), currently an edit appears on the Home and Trial screens which prevents recording rent amounts below $50.00. This edit has now been removed and the system will allow an amount less than $50.00 rent to be recorded even though rent assistance is not payable.
29.As there is no capacity on the system to store a saved amount or to store the history of a case, any cases which lose saved status and subsequently require reinstatement will need to be handled manually. The support data contained in the pensioner's files will have to be accessed to obtain the saved rate. Some examples of cases which may require reinstatement are provided below:
.EXAMPLE 1. A veteran goes overseas. RA is cancelled. He continues to pay rent to retain his accommodation in Australia. He returns after 49 days. He approaches the department explaining that he would have returned within 42 days but that there had been a plane strike and this was the earliest he could return. RA at the saved rate is reinstated. (NB : If the veteran had not continued to pay rent for the entire period of the absence, then saved status could not be reinstated.)
.EXAMPLE 2. A veteran returns home after 50 days in Respite Care. The spouse was assessed at the single rate for the period of the absence while she maintained their rented accommodation. The saved status would be reinstated on his return.
CENTRAL OFFICE CONTACTS
30.Enquiries in relation to this DI can be directed to the project officer, Masuda Sheikh on (06) 289 6442 or Tracey Cunningham on (06) 289 6398 for systems related problems.
Peter Hawker
National Program Director
Benefits
March 1993