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C25/1996 BUDGET INITIATIVE: PHASING OUT OF SAVED RENT ASSISTANCE

Document

DATE OF ISSUE:  28 MARCH 1996

BUDGET INITIATIVE:   PHASING OUT OF SAVED RENT ASSISTANCE

TABLE OF CONTENTS

INTRODUCTION...........................................................

BACKGROUND............................................................

BOARDERS AND LODGERS (1989 REFORMS)....................................

RETIREMENT VILLAGES (1989 REFORMS)......................................

1993 REFORMS...........................................................

COMMENCEMENT OF CHANGES.............................................

POLICY CHANGES.........................................................

CPI AND AD HOC INCREASES TO BE WITHHELD.................................

SAVED RA COMPONENT REDUCED TO NIL.....................................

CHANGES TO PHASE OUT SAVED RENT ASSISTANCE............................

SYSTEM CHANGES........................................................

NEW INPUT FIELDS........................................................

NEW EDITS..............................................................

RESIDENTIAL QUALIFICATION CODE..........................................

ADMINISTRATION OF THE NEW PROVISIONS....................................

PROCESSING VARIATIONS..................................................

GRANT OF NEW ALLOWANCE................................................

TREATMENT OF DEPENDANT CHILD ADD-ON...................................

DEATH PROCESSING SYSTEM...............................................

PUBLICITY AND ADVICES...................................................

MARCH MAILOUT TO AFFECTED CLIENTS......................................

QUARTERLY ADVICES......................................................

STANDARD LETTERS/ADVICE SCREEN........................................

AGE PENSION NEWS.......................................................

TAXATION IMPLICATIONS...................................................

CONTACT OFFICER........................................................

ATTACHMENTS

A - MAILOUT IN FEBRUARY..................................................13

B - MARCH QUARTERLY ADVICES............................................15

C - PARAGRAPHS FOR STANDARD LETTERS....................................21

INTRODUCTION

The purpose of this Instruction is to provide information on the May 1995 Budget initiative to phase out saved rent assistance cases and the procedures to follow when dealing with these cases.  The changes to commence from 28 March 1996 will have the effect of progressively reducing the number of saved Rent Assistance (RA) recipients on the system over the next three years (approximately), until all pensioners are assessed under current RA legislation.

BACKGROUND

2.There are a number of savings provisions relating to RA that have been introduced and maintained over the last few years.  A description of RA entitlements and rates of pension that have been preserved are detailed in three categories below.

Boarders and Lodgers (1989 Reforms)

3.The savings provision for boarders and lodgers was introduced by Section 30 of the Social Security and Veterans' Affairs Legislation Amendment Act 1988.

4.The savings provision meant that those boarders who were continuously eligible for rent assistance as a boarder or a lodger (or a person residing in a nursing home & paying for accommodation) prior to 15 June 1989, would not have the 2/3 rule applied to their rent.  The full amount of board or lodging was taken into account for determining the rate of rent assistance payable.  Whilst they were saved from the application of the 2/3 rule, they were not saved from changes to the threshold.

5.Rent assistance payable under the saved rules was the lesser of:

  • $30.00 per fortnight; or

  • rent paid - threshold              2

6.The savings provisions applied to a pensioner if they were entitled to a higher amount under pre - June 1989 rules than the subsequent rules.  A saved person was paid that amount until they:

  • lost eligibility for service pension;

  • ceased to be a boarder or lodger or a nursing home patient; or

  • became entitled to the same or a higher rate of rent assistance under subsequent rent assistance rules.

Retirement Villages (1989 Reforms)

7.A savings provision applicable to certain retirement village residents was introduced by Section 31 of the Social Security and Veterans' Affairs Legislation Amendment Act 1988.

8.The change introduced on 15 June 1989 meant that pensioners, who paid more than $64,000 entry contribution for the right to live in a retirement village, were now defined as ineligible property owners for RA purposes and therefore not eligible for rent assistance.

9.The savings provisions introduced with the changes protected those pensioners receiving rent assistance, who had up to that date paid more than $64,000 entry contribution. They have continued to receive rent assistance unless their circumstances have changed since the introduction of those provisions.

1993 Reforms

10.The 1992 Budget introduced a number of changes to the way a person's rate of rent assistance is calculated including the introduction of a range of additional threshold rates.  Savings provisions were introduced to protect any pensioners who may have been entitled to a lesser rate of rent assistance under the new rules.

11.Any pensioner receiving rent assistance prior to 20 March 1993 was 'saved' from the application of the new rules, their rent assistance being frozen at the rate payable at that time.

12.These savings provisions are contained in subsections 111(5) and 111(6) of the Veterans' Affairs Legislation Amendment Act No 2 1992.  They apply only to a person's rate of rent assistance and do not relate to a person's eligibility for rent assistance.

COMMENCEMENT OF CHANGES

13.The effective date for these reforms is 20 March 1996 which is the commencement date of the legislation and aligns with DSS legislation.  These changes are contained in the Veterans' Affairs Legislation Amendment (1995-96 Budget Measures) Bill (No.2) 1995 and received Royal Assent 12 December 1995. The Veterans' Affairs pay-day for implementation is 28 March 1996.

14.Changes take effect immediately before the processing of the CPI increases on 28 March 1996 and will occur on subsequent indexations whilst saved cases still have saved RA status.

POLICY CHANGES

15.For those pensioners (approximately 7800) still covered by the RA savings provisions on 28 March 1996, it will be necessary to:

withhold any CPI increase in respect of all service pension components payable (excluding Telephone Allowance) or ad hoc rises payable resulting from increases to Remote Area Allowance or Guardians Allowance,

until such time as the pensioner's total benefits equate with or are less than the benefits to which the person is otherwise entitled under the current (non-saved) rent assistance legislation.  The new provisions will apply to all saved RA cases regardless of which of the savings provisions they were saved under.

16.Pension or allowances affected by these provisions include:

  • service pension;

  • pharmaceutical allowance;

  • remote area allowance;

  • dependant child add-on;

  • guardian allowance; and

  • rent assistance*.

Note:  The legislation states - RA payable to a person under the savings provisions is reduced by the sum of any indexation or adjustment increases occurring to the person's rate.

Whilst the withholding of rent assistance indexation increases is included in the new provisions, a RA CPI rise will not be deducted from the saved rent assistance rate as only clients on maximum RA actually receive the effect of the RA CPI rise.  As cases with Saved RA do not receive the RA CPI rise, no deduction will be made in respect of this component.

CPI and Ad Hoc Increases to be Withheld

17.It is important to note that only the value of CPI rises will be withheld.  SP and its various components will still effectively receive a CPI increase.  The value however of those increases will be offset or deducted from the saved amount of RA progressively reducing that amount after each rise.  These rises will not flow on to the pensioner until such time as the pensioner qualifies for an equivalent or greater rate of rent assistance under current legislation.  Therefore as the total of withheld CPI adjustments increases, the saved RA amount will decrease.  The practical operation of these rules appears in the examples at paragraph 20.

Saved RA Component Reduced to Nil

18.When the rate of RA assessed under current legislation is equal to or greater than the rate assessed under the savings provisions, the savings provisions will cease to apply and future CPI adjustments or ad hoc increases will flow on to the pensioner.

Note:  It is important to note that:

  • the above rules are not affected by the level of a pensioner's income or assets which can rise or fall; and

  • the indexation of the Income Free Area and Assets Free Area amounts do not affect RA except for cases involving Disability Pension.  The system will automatically recalculate any changes to the "non-saved RA".

CHANGES TO PHASE OUT SAVED RENT ASSISTANCE

19.The phasing out of saved RA cases will be achieved by the withholding of CPI and ad hoc indexation increases.  This process of offsetting the CPI increase/s against  the saved rent assistance amount will only occur when indexation occurs ie March, September and/or January of each year.  The amount of indexation will vary according to a person's marital status and the pension components for which a person qualifies.  (It is not affected by their income and assets).

20.The effect of a CPI increase on a pensioner's total pension is shown by the following example:

Example A

If a Single pensioner has:

  • a saved rate of RA of $30.00;

  • an assessed rate of RA under current legislation of $15.00;

  • a CPI increase of $9.00 in March; and

  • $ 8.50 CPI increase in September,

pension entitlement would vary as follows:

Pre March CPI

Post March CPI

Post September CPI

SP

$335.90

$344.90+  $9.00

$353.40+  $8.50

RA

$30.00 (saved)

$21.00 (saved)-  $9.00

$15.00* (non-saved)-  $6.00

Total

$365.90

$365.90nil change

$368.40+  $2.50

*Note:  $21.00 (March rate) - $8.50 (CPI rise) should equal $12.50 (saved rate) however as the non-saved RA rate is a greater amount of $15.00, RA is payable at $15.00.  The pensioner only receives a partial CPI rise in their total payment with loss of saved RA status and eligibility for the full value of future CPI rises.

Example B

If given the circumstances in Example A the following additional changes were to occur:

  • a rent threshold increase of $5.00 was also to occur at the September CPI; and

  • the CPI increase in March 1997 was $9.00,

the pension entitlement would vary as follows:

Pre MarchCPI

Post MarchCPI

Post SeptemberCPI

Post March 1997CPI

SP

$335.90

$344.90+  $9.00

$353.40+  $8.50

$362.40+  $9.00

RA

$30.00 (saved)

$21.00 (saved)-  $9.00

$12.50 (saved)-  $8.50

$11.30** (non-saved)-  $1.20

Total

$365.90

$365.90nil change

$365.90nil change

$373.70+  $7.80

**The effect of an indexation increase to rent thresholds and the subsequent result marked in the above table is explained as follows:

If as in example B a pensioner has a $5.00 increase to their rent threshold in September 1996, the non-saved rate is not necessarily reduced by $5.00 pf (ie $15.00 down to $10.00) but rather from $15.00 less $3.75 to $11.25 or $11.30** rounded. This is because for every $1.00 that the threshold increases, the non-saved rate decrease by 75 cents (as only 75 cents RA is payable for every dollar of rent paid).  So if a rent threshold increased by $5.00 pf, the new non-saved rates would reduce from:

$15.00* in Example A to $11.30** in Example B.

The pensioner in Example B would still remain on their saved rate of $12.50 in September 1996 as this rate would be greater than the non-saved rate of $11.30.  Their non-saved rate would not replace the saved rate until the next CPI adjustment when the saved RA figure would have been reduced from $12.50 less the CPI increase of $9.00 to $3.50 pf.

In all but a few manual cases, this calculation will be automatically handled by the system recalculating the RA payable under the current rules.

SYSTEM CHANGES

21.Before the indexation is applied to saved rent assistance cases (ie cases that have an amount greater than 0.00 recorded in the 93 Saved Amount field on the HOME SCREEN - PP.HO), the system will calculate the rent assistance payable under the current rules and compare this to the saved RA amount.  If saved RA is the greater amount the new rules will be applied.

New Input fields

22.Three additional fields have been added to the system on the home screen (PP.HO).

SCREEN TITLE

INPUT FIELD

PURPOSE

NON SAVEDRA AMOUNT

numeric 0.00to 99.99

will show the assessed rate of RA, calculated under the current rules.

LAST CPI AMOUNTWITHHELD

numeric 0.00to 99.99

will display the value of the CPI increases withheld at the last SI.

TOTAL CPI AMOUNTWITHHELD

numeric 0.00to 999.99

will show the cumulative total of increases withheld since March 1996.

23.All these fields will be updated automatically at each Statutory Increase.  TOTAL CPI AMOUNT WITHHELD field can be overtyped if required.

24.Values for NON SAVED RA AMOUNT and LAST CPI AMOUNT WITHHELD fields are only displayed in the 'current' assessment. These fields will not display values in the 'action' assessments.

Note:  The new fields appear on the home screen (PP.HO) and the SP summary screen (IQ.IA).  The NON SAVED RA AMOUNT and TOTAL CPI AMOUNT WITHHELD fields  will appear on supporting data and DSS clearance reports.

New Edits

25.New edits have been added to the system in relation to the above new fields and will display at the bottom of the PP.HO screen when appropriate.  In addition the 93 RA Saved Amount and the three new input fields will be set to zero or blank when the saved amount equals or is less than the non-saved amount.

Residential Qualification Code

26.The Residential Qualification code will also change to reflect the new non-saved RA status as follows:

Residential Situation Code

Residential Qualification Code

OLD (Saved)

NEW (Non-saved)

RE (Renter)

P

blank

MH (Mobile Home)

P

blank

BL (Boarder/Lodger)

P

blank

LI (Accommodation for life)

P

blank

SL (Sale/Leaseback)

P

blank

RV (Retirement Village)

A (Self care)B (Hostel)

SH

ADMINISTRATION OF THE NEW PROVISIONS

Processing Variations

27.Whilst CPI increases will be withheld the pension entitlement will not be "frozen". Many factors may lead to increases or decreases in total entitlement, including changes in the level of income or assets, expiry of earnings credit, changes in the number of dependent children or the ages of those children, or changes in marital status.  Cases will be assessed as normal with the majority of cases requiring no additional examiner action.

Grant of New Allowance

28.If, after 20 March 1996, a new allowance is granted with arrears that overlap a March, September or January indexation increase, the allowance will be granted as normal but the value of the indexation will have to be manually:

  • added to the TOTAL CPI WITHHELD AMOUNT field; and

  • the appropriate deduction made from the 93 RA SAVED AMOUNT field,

with automatic recalculation of the NON-SAVED RA.

29.Whilst it is most likely that loss of saved status will occur at the time of a CPI increase, a loss of saved status may occur as a result of:

  • changes in marital status;

  • changes in accommodation circumstances;

  • increases in the rent thresholds; and

  • changes to the amount of disability pension payable.

30.In summary the TOTAL CPI AMOUNT WITHHELD field should be updated by examiners where an additional SP component is granted.  The examiner should withhold the CPI increase from the arrears payable and further reduce the RA Saved amount.  These field/s will also need to be updated by the examiner for cases requiring manual SI action.

Treatment of Dependant Child Add-On

31.In cases where Dependant Child Add-On(DCAO) is in payment, the CPI increase to the DCAO will be halved and deducted from the saved rent assistance of the veteran and spouse.  This will result in the veteran's total pension increaesing by half of the DCAO CPI increase whilst the spouse's total pension will reduce by half of the DCAO CPI increase.  Their total combined pension will remain the same.

DEATH PROCESSING SYSTEM

32.If a partner in a married assessment with a saved amount recorded dies, the saved amount will automatically be combined with that of the survivor.  The value of CPI increases withheld will automatically be added to that of the survivor.  This does not apply for couples being assessed under the illness separated provisions.

PUBLICITY AND ADVICES

March Mailout To Affected Clients

33.A letter is to be sent to all affected pensioners (except ISS pensioners* on the ceiling rate), in early March explaining the changes to their pension.  A copy of this letter is at Attachment A.

*Note:  The ISS pensioners in receipt of the ceiling rate of pension do not get an increase when the CPI is adjusted.  They will be advised of the changes in their Quarterly Advice.

Quarterly Advices

34.A special quarterly advice will be issued in March and at subsequent indexation increases to advise pensioners with saved RA that their CPI increase/s have been withheld as a saved RA amount still exists.

35.An automatic quarterly advice will be produced when a person ceases to receive RA under the savings provisions and is assessed under the current rules.  Copies of these advices are at Attachment B.

Standard Letters/Advice Screen

36.When a pensioner loses saved status at any time other than a Statutory Increase, ie change in marital status, additional children being added to the assessment, the paragraph at Attachment C advising of a loss of saved status should be included in their advice.

Age Pension News

37.An article has been placed in the March edition of the Age Pension News advising pensioners of a change to saved RA.

TAXATION IMPLICATIONS

38.As stated, the value of withheld CPI increases is to be deducted from the amount of RA payable rather than the other payments.  Therefore SP, PA etc will all receive increases but the value of those rises will be deducted from the saved RA amount thereby reducing the current taxation exemption on RA.  The argument behind this is that all pensioners currently assessed under the savings provisions are getting an unfair tax advantage in comparison to other 'non-saved' pensioners and it is therefore appropriate to reduce this advantage.

CONTACT OFFICER

39.Enquiries in relation to this Departmental Instruction should be directed to the Project Officer, Virginia Parry-Jones by telephone on (03) 9284 6450, Fax 03 9284 6794 or E-MAIL V-B-PDI2.

W R MAXWELL

A/g DIVISION HEAD

COMPENSATION

ATTACHMENT A

MAILOUT IN MARCH

LETTER TO ALL CLIENTS (EXCEPT NSW) IN RECEIPT OF SAVED RA.

Dear {Pensioner name}

I am writing to you about the way your rent assistance is assessed.

Your rent assistance is being paid at a higher rate than that normally available to a person in your residential situation.  This is due to the savings provisions implemented over past budgets.

In the 1995 Budget the Government announced that, from 28 March 1996, all  pensioners should receive the amount of rent assistance they are entitled to under the current legislation.  This means, all pensioners who receive rent assistance at a higher rate as a result of savings provisions, should be paid their entitlement under the current legislation.

The Government did not intend that any current pensioner such as yourself would have their overall pension payment reduced as a result of this decision.  This means that for now you will continue to receive extra rent assistance but the value of all cost of living adjustments to pension and allowances will be offset against that extra rent assistance resulting in your overall pension payment being continued at the next cost of living increase.

This offsetting arrangement will continue until your rent assistance equals the amount you would receive if you were being assessed under the current legislation.  From then on you will be paid at your correct entitlement as set out in the current legislation.

Separate advice will be forwarded to you when payment under the current legislation is achieved.

If you have any questions regarding the above, please contact this Office on the above telephone number.

Yours Sincerely

Deputy Commissioner

MAILOUT IN MARCH

LETTER TO NSW CLIENTS IN RECEIPT OF SAVED RA.

Dear {Pensioner name}

I am writing to you about the way your rent assistance is assessed.

Your rent assistance is being paid at a higher rate than that normally available to a person in your residential situation.  This is due to the savings provisions implemented over past budgets.

In the 1995 Budget the Government announced that, from 28 March 1996, all  pensioners should receive the amount of rent assistance they are entitled to under the current legislation.  This means, all pensioners who receive rent assistance at a higher rate as a result of savings provisions, should be paid their entitlement under the current legislation.

The Government did not intend that any current pensioner such as yourself would have their overall pension payment reduced as a result of this decision.  This means that for now you will continue to receive extra rent assistance but the value of all cost of living adjustments to pension and allowances will be offset against that extra rent assistance resulting in your overall pension payment being continued at the next cost of living increase.

This offsetting arrangement will continue until rent assistance equals the amount you would receive if you were being assessed under the current legislation.  From then on you will be paid at your correct entitlement as set out in the current legislation.

Separate advice will be forwarded to you when payment under the current legislation is achieved.

If you have any questions regarding the above, please contact this office on 213 7198 or for outside the metropolitan area on 1800 113 304 and ask for extension 7198.

Yours Sincerely

Deputy Commissioner

ATTACHMENT B

MARCH QUARTERLY ADVICE

PARAGRAPH 1

A.Clients in receipt of saved RA whose saved RA will not be deleted by March CPI. (Service Pension cases only)

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

You are currently in receipt of ${ENTER AMOUNT } saved rent assistance.  Your rent assistance entitlement under current legislation is $ {ENTER AMOUNT}.  All future cost of living increases will be offset against the extra amount of rent assistance you receive, reducing that amount until your rent assistance is paid at the entitlement under the current legislation.

Separate advice will be forwarded to you when payment under current legislation is achieved.

B.ISS recipients, less than ceiling rate, in receipt of saved RA whose saved RA will not be deleted by March CPI increase.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

You are currently in receipt of ${ENTER AMOUNT } saved rent assistance.  Your rent assistance entitlement under current legislation is $ {ENTER AMOUNT}.  All future cost of living increases will be offset against the extra amount of rent assistance you receive, reducing that amount until your rent assistance is paid at the entitlement under the current legislation.

Separate advice will be forwarded to you when payment under current legislation is achieved.

PARAGRAPH 2

ISS ceiling rate clients in receipt of saved RA whose saved RA will not be deleted by March CPI.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

You are currently in receipt of ${ENTER AMOUNT}saved rent assistance.  Your rent assistance entitlement under current legislation is ${ENTER AMOUNT}.  All future cost of living increases will be offset against the extra amount of rent assistance you receive, reducing that amount until your rent assistance is paid at the entitlement under current legislation.

As you are in receipt of a ceiling rate of Income Support Supplement, this change will not affect the amount of Income Support Supplement you receive.  You will notice that the amount of rent assistance you are receiving will reduce but the amount of Income Support Supplement will increase by the same amount.

PARAGRAPH THREE

A.Clients whose saved RA is deleted at March 1996 and  RA entitlement being paid under current legislation. (Servcie Pension cases only)

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment due to you has been offset against the higher amount of rent assistance you were receiving.  As your rent assistance is now being paid at a rate calculated under the current legislation, the full value of future cost of living adjustments will be paid to you.

B.Clients whose RA is deleted at March 1996, RA being paid under current legislation and who get partial CPI increase.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment has been offset against the higher amount of rent assistance you were receiving, resulting in only a partial cost of living increase being paid to you.  As your rent assistance is now being paid at a rate calculated under the current legislation, the full value of future cost of living adjustments will be paid to you.

C.ISS recipients whose saved RA is deleted at March 1996 and RA entitlement being paid under current legislation.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment due to you has been offset against the higher amount of rent assistance you were receiving. As your rent assistance is now being paid at a rate calculated under the current legislation, the full value of future cost of living adjustments will be paid to you.

PARAGRAPH 4

A.Clients whose saved RA is deleted at March 1996 and has no RA entitlement (Service Pension cases only).

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment has been offset against the higher amount of rent assistance you were receiving.  Based upon your current circumstances you are not entitled to receive any rent assistance under the current legislation.  The full value of future cost of living adjustments will be paid to you.

B.Clients whose RA is deleted at March 1996, no current RA entitlement and get partial CPI increase.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment has been offset against the amount of rent assistance you were receiving resulting in:

  • only a partial cost of living increase adjustment being paid to you; and

  • cancellation of entitlement to rent assistance based on your current circumstances.

The full value of future cost of living adjustments will be paid to you.

C.ISS recipients whose saved RA is deleted at March 1996 and has no RA entitlement.

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

The cost of living adjustment has been offset against the higher amount of rent assistance you were receiving.  Based upon your current circumstances you are not entitled to receive any rent assistance under the current legislation.  The full value of future cost of living adjustments will be paid to you.

PARAGRAPH 5

A.At each CPI/quarterly advice the client will be told why they didn't get the CPI increase in addition to their entitlement under current rules (same as para 1) (Service Pension cases only).

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

You are currently in receipt of ${ENTER AMOUNT}saved rent assistance.  Your rent assistance entitlement under current legislation is ${ENTER AMOUNT}.  All future cost of living increases will be offset against the extra amount of rent assistance you receive reducing that amount until your rent assistance is paid at the entitlement under the current legislation.

Separate advice will be forwarded to you when payment under current legislation is achieved.

B.At each CPI/quarterly advice the ISS recipient will be told why they didn't get the CPI increase in addition to their entitlement under current rules (same as para 1).

The Government announced in its 1995 Budget that, from 28 March 1996, all clients should receive the amount of rent assistance they are entitled to under the current legislation.  This means that, all clients whose rent assistance is paid at a higher rate because of savings provisions implemented over past budgets, should be paid their current entitlement.

You are currently in receipt of ${ENTER AMOUNT}saved rent assistance.  Your rent assistance entitlement under current legislation is ${ENTER AMOUNT}.  All future cost of living increases will be offset against the extra amount of rent assistance you receive reducing that amount until your rent assistance is paid at the entitlement under the current legislation.

Separate advice will be forwarded to you when payment under current legislation is achieved.

PARAGRAPH 6.

FUTURE A/Ls ADVICE TO CLIENT WHEN SAVED RENT ASSISTANCE COMPONENT IS DELETED.

A.All clients on saved RA (including ISS less than ceiling rate)

The saved rent assistance you were receiving is no longer being paid as you now qualify for rent assistance under the current legislation.  The full value of future cost of living increases will be paid to you.

B.All clients on saved RA (including ISS less than ceiling rate) and get partial CPI increase.

The cost of living adjustment has been offset against the higher amount of rent assistance you were receiving resulting in you receiving only a partial cost of living increase.  As your rent assistance is now being paid at a rate calculated under the current legislation, the full value of future cost of living adjustments will be paid to you.

C.Clients on ISS ceiling rate

The saved rent assistance you were receiving is no longer being paid.  Rent assistance paid to you is now being paid under the current legislation.

D.Clients not entitled to any rent assistance

The saved rent assistance you were receiving is no longer being paid. Based on your present circumstances you are not entitled to any rent assistance under the current legislation.  Future cost of living increases will now be paid to you.

E.Clients not entitled to any rent assistance and who get partial CPI increase

The cost of living adjustment has been offset against the amount of rent assistance you were receiving resulting in:

  • only a partial cost of living increase adjustment being paid to you; and

  • cancellation of entitlement to rent assistance based on your current circumstances.

The full value of future cost of living adjustments will be paid to you.

ATTACHMENT C

PARAGRAPHS FOR STANDARD LETTERS and ADVICE SCREEN

(use the best one to suit the situation you are dealing with)

Due to the change in your {INSERT WHATEVER IS APPROPRIATE}the saved rent assistance you were receiving is no longer being paid as you now qualify for rent assistance under the current legislation.  The value of future cost of living increases will be paid to you.

OR

Due to the change in your {INSERT WHATEVER IS APPROPRIATE}the saved rent assistance you were receiving is no longer being paid. Based on your present circumstances you are not entitled to any rent assistance under the current legislation.  The value of future cost of living increases will be paid to you.