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C49/2002 REVISED PROCEDURES FOR CENTRELINK CLEARANCES

Document

DATE OF ISSUE:  4 NOVEMBER 2002

REVISED PROCEDURES FOR CENTRELINK CLEARANCES

Purpose

The purpose of this Departmental Instruction is to replace DI B12/95 DVA/DSS Clearance, and to provide further direction on the revised procedures between Department of Veterans' Affairs and Centrelink for clearances processing and associated debt recovery.

Commencement

The changes commence on 1 November 2002.

Contact

The NO contact officers for this project are Elaine Tse on (02) 6289 6011 and Peter Feinler on (08) 8290 0441.

Authorised by

ROGER WINZENBERG

Branch Head

INCOME SUPPORT

4 November 2002


Overview of Clearance Processing

Background

The clearance process is a long established arrangement between Centrelink and DVA to prevent excess payments to pensioners when they transfer between the agencies and excess payment that results from the grant/variation of a disability pension (DP) that affects the benefit currently being received.

The process ensures that:

  •     the losing (ie the first) agency's payments are cancelled or varied from the date on which the gaining (ie the second) agency commences payment, and
  • when a retrospective grant or increase of a DVA pension is made to a Centrelink income support recipient, the backdated amounts are adjusted to account for any overlapping payments.

Both DVA and Centrelink have acknowledged that the existing arrangements were inefficient, with associated risks such as processing delays, inadequate training/support and lost transmissions leading to adverse client impact.

Streamlined Clearance procedures

Centrelink and DVA have worked together to identify the priorities in the clearance process.  The jointly initiated project has a phased approach.  The objective of Phase 1 is to streamline the procedures and to resolve some of the concerns raised in State Office consultations that could be achieved independent of significant IT system changes.

Functions provided by the current clearance and printing systems used by some State Offices will not require any major amendments to accommodate the new procedures.

Electronic transmission options will continue to be investigated in Phase 2 of this project, and enhancements to IT systems for both agencies to facilitate fully automated clearance processing will be explored in Phase 3.

Key components of Phase 1

To streamline the clearance and debt recovery procedures, the following standards/changes are being introduced:

  • Centralised processing of DVA clearance requests by Centrelink
  • Agreed service levels/service delivery times
  • Enhancement of Centrelink clearance forms
  • Recovery of overpayment
  • Revised letters
  • Debt Reporting

Centrelink Centralised Processing Units

Centralised processing or 'cluster' office structure was already in place in some states. The direct liaison between a limited number of personnel in Centrelink and DVA has achieved excellent response time for clearance processing and debt transactions.

However, in other states where clearance requests were sent to the local area offices, the response times varied significantly, with lack of awareness or lack of priority for DVA work by some Centrelink staff leading to long delays.

From October 2002, designated processing units will be responsible for the processing of clearances from DVA.  There are 1 to 3 Centrelink Centralised Processing Units (CCPU) established per state, with the work allocated according to the postcode of the pensioner concerned.

This arrangement will allow staff in the CCPU to establish a good network with DVA teams and build up their knowledge of all aspects of clearance and debt processing.

Communication protocols for data exchange between DVA and Centrelink are being established.  These will detail service level agreements and recommend that biannual meetings take place within the states to consolidate local relationships and business arrangements.

The procedures, protocols and contact details are available in the CLIK Reference Library, under Centrelink Information.

Clearance Requests

Decision-makers should assess the need to send a clearance based on the information provided by the claimant.   Where claimants have declared themselves as non-recipients of Centrelink payments, the question of means of support must be adequately addressed. If there is any doubt, the relevant CCPU should be contacted to establish if a Centrelink payment record exists.  Clearances should also be sent for War Widow's Pension (WWP) granted through Death Processing System where there is no DVA income support payment.


Clearance Requests (continued)

For grants of income support payment where the DVA rate is less than the Centrelink rate, (ie. DVA arrears will not be sufficient to cover the Centrelink adjustment), contact the CCPU concerned to arrange a “cut-off” for the Centrelink payment to be cancelled, such that there is no overlapping entitlement period and no interruption to payment. *

Minor differences in pension rates could arise due to investment updates but significant differences may suggest that the previous entitlements were incorrect.  The CCPU should be furnished with the relevant details so that Centrelink can determine if any further investigation is required.

*An EATERS action should be undertaken to record the correct dates where additional treatment eligibility is gained from the grant of the income support payment.

Clearance Data

Pending development of clearance requests for electronic transfer, State Offices should ensure that the clearance forms currently used contain the key fields for each client that requires a clearance.

Part A (DVA's request):

  • Full Name (including any other name the client is known by)
  • Date of birth
  • Address
  • DVA and Centrelink reference numbers
  • Date of grant/variation
  • Payment type/s and rate/s (eg. Disability Pension 10%)
  • Fortnightly payment amount/s

Part B (Centrelink's response):

  • The additional phrase for Centrelink to specify that the adjustment amount is a recoverable debt under s.1223(1) of the Social Security Act 1991 (SSA),
  • Include a request for residential, income and asset details in the case of War Widows' Pension (WWP) grants, to facilitate assessment of Income Support Supplement (ISS) on the basis of details held by Centrelink.

Part C (DVA's acknowledgment):

  • Include the options of DVA recovery or referred back to Centrelink

A clearance request sample is shown in Attachment A

War Widow's Pension and ISS

Procedures for the combined WWP/ISS claim form are outlined in DI C18/2000.  Once ISS eligibility is established, Centrelink should be requested via the clearance to provide an itemised income and assets statement.

Given the high income and asset limits for ISS, most war widow/ers who were in receipt of age pension from Centrelink will receive the maximum rate of ISS.  If necessary, contact the war widow/er by telephone to clarify any details about the income and asset assessment, or any other aspect of the case.  Where the income and/or asset levels are close to the limits, or, are sufficient to generate a reduced rate of ISS, an income and asset statement should be sent to the war widow/er after the grant of ISS to verify the details.

If the existing payment from Centrelink was paid at a higher rate than WWP (eg. maximum rate age pension and rent assistance), the case should be referred to Income Support without delay for ISS eligibility to be investigated.

Bereavement Payment

It should be noted that it is Centrelink policy that once the lump sum bereavement payment (LBP) is calculated and paid, it is NOT adjusted.  For partnered assessments, the survivor is paid an ongoing rate.  Variations can be made to the ongoing rate of pension, even during the bereavement period.

Where WWP is granted and a clearance is sent by DVA, Centrelink will cancel the social security payment with effect from date of grant of WWP.

Centrelink then requests recovery of the overpaid amount back to date of cancellation, but no re-calculation of the LBP is performed.  DVA will adjust the pension arrears and assess eligibility and payability of ISS based on information provided by Centrelink.

Agreed response times

DVA is to provide a clearance request within 2 days of processing a payment grant/variation.  The agreed turnaround time is 5 working days from either agency to undertake the required action.

If the standard interval is insufficient due to difficulties in retrieving data or pending action that will affect the arrears amount/recovery outcome, then the respective liaison officer should be advised about the potential delay.


Recovery of Overpayment

Centrelink overpayments

Overpayments of social security pension or benefit to DVA pensioners can arise in the following circumstances:-

  • Multiple entitlement exclusions exist in the SSA precluding payment of certain social security entitlements when a service pension (SP) or WWP becomes payable to the person.  That is, the Centrelink payment ceases to be payable from the date of grant of SP or WWP, and any amount of Centrelink payment paid since that date is an overpayment.

  • When a retrospective grant or increase of DP is made to a Centrelink pensioner, any amount of income support which would not have been payable during the period had the DP been in payment, is an overpayment.

If Centrelink makes a social security payment and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, the amount of the payment is a debt to the Commonwealth by the person who obtained the benefit of the payment.  Subsection 1223(1) of the SSA defines debts that are recoverable.

Recovery of these overpayments is authorised under s.205 and 205AA of the VEA.  These can be applied to recover the overpaid amounts from the person, either in a lump sum or by instalments from the new pension.

Recovery of excess payment to Partners

If the veteran has a partner who has been receiving a social security pension or benefit, the calculation of arrears as set out in s.27 (A) allows for the reduction of excess income support paid to the veteran's partner.

This section applies when:

  • Arrears of disability pension become payable;
  • The veteran has been a member of a couple during the arrears period;
  • The veteran's partner has been receiving an income support payment; and
  • The rate of that income support is retrospectively reduced because of the disability pension arrears.

The amount of arrears payable to a veteran may also be affected by section 205 or 205AA and should be adjusted first.  The balance is then compared against any excess recovery for the partner.

If the excess payment is less than the balance of arrears, the amount payable to the veteran in respect of the arrears period is reduced by the excess payment of income support to the veteran's partner.  If the partner's excess income support payment is equal to or greater than the balance of arrears, the pension payable to the veteran in respect of the arrears period is reduced to zero and no lump sum is payable.

Example

John and his partner Mary are both in receipt of Newstart Allowance.  John applies for an increase in disability pension, which is subsequently increased to 70% of the General Rate as from 10 June 2002.  A clearance request with this information is sent to Centrelink

Because disability pension is income for Centrelink payments, the Newstart Allowance payments that John and Mary receive will need to be adjusted from the date of grant of the increase.  Centrelink advises DVA the adjustment amount for each recipient.

The adjustment amount for John is recovered from his arrears first.

If John's arrears are sufficient to cover his adjustment amount, then Mary's overpayment can be considered.  The balance of John's arrears can be used to offset Mary's overpayment but this balance can only be reduced to zero (ie. no lump sum payable).  Any further excess for Mary will need to be referred back to Centrelink, as Mary has no ongoing payment at DVA.

If John's arrears are not sufficient to cover his adjustment amount, then the outstanding amount for John can be recovered from his ongoing payments as per s.250AA.  However, there is no authority for DVA to apply deductions in respect of Mary's adjustment amount, therefore, her overpayment must be referred back to Centrelink for any recovery action.


Adjustment of DVA arrears

DVA arrears

It is the responsibility of DVA to ensure that arrears are not released during the agreed response interval, prior to receipt of relevant clearances.

Upon receipt of Centrelink's clearance response, DVA will calculate and release the balance of arrears to the pensioner or to the Centrelink Overpayment Recovery destination through Integrated Payment System (IPS) as required.

As per Centrelink's waiver of small debts policy, debt accounts of less than $50 are waived and no action should be required by DVA.

In the majority of cases, if the existing payment is varied/cancelled within the agreed response time, then the adjustment amount should not exceed the arrears.  Queries about the adjustment amount should be referred to the Centrelink Liaison officer.

Where the arrears are insufficient to cover that person's adjustment amount, DVA will initiate recovery from ongoing pension payments on behalf of Centrelink.  Extra care should be taken if such a case relates to a grant of WWP and ISS eligibility should be investigated before starting the recovery plan.

Where there is an overpayment to the partner that cannot be recovered from the veteran's DP arrears, the outstanding amount must be referred back to Centrelink.

Recording Centrelink Debts on DMRS

Centrelink clearance debts being recovered by DVA should be recorded on the DMRS as overpayment, “Other Department DSS”.  This allows for an audit trail with the corresponding Centrelink Overpayment destination in the Outward Payments tab in VIEW.

Only the outstanding adjustment amount should be entered as a debt.  The DMRS business rules will initiate the appropriate recovery plan.

Add “clearance received dd MMM yy” or similar notation in the comment column for reference.  These debts should not be included in the DVA total of outstanding debts for Annual Reports or any other similar publication.

An extract from the DMRS guide is provided in Attachment B and the full guide is available via the following link:

http://sharepoint/programsandprojects/systemguides/view/dmrs/Documents/DMRSProceduralGuidePartsABCD.doc


Notifying Centrelink

Adjustment Outcome

A response is not required for cases where Centrelink has no current payment record, or no adjustment was requested.  For all other cases, Centrelink must be notified about the outcome of the adjustment.

The final part of the clearance form should be completed with details of the amount recovered.  If there is an outstanding balance, it must be clearly indicated whether DVA has initiated debt recovery, or if the case is referred back to Centrelink for their action.

Debt Reporting

As DVA undertakes debt recovery on behalf of Centrelink, the agency should be advised of the status of each debt at monthly* intervals.  This includes debt initiated by DVA following clearance adjustments as well as requests for ongoing deductions from Centrelink.  All debts recovered in the reporting period need to be recorded in the report even if the debt is $0 at the end of the reporting period, so that they can be clearly identified as fully recovered.

The debt reports should be sent to the Area Recovery Teams at Centrelink.  A listing of contacts for these Teams is available from the Centrelink Information folder in CLIK.

*System changes are being investigated to produce the scheduled DMRS report, “Outstanding Debts – other Department” monthly to facilitate this exchange of information.


Standard letters

Pensioner Notification

DVA is responsible for advising the pensioner of the outcome of the arrears adjustment.  Two new standard letters have been developed for notifying the pensioner of overpayment recovery following clearance processing.

Available on:

IS Standard Letters, Pay Admn, Recovery post-clearance debt grant.dot

IS Standard Letters, Pay Admn, Recovery post-clearance debt increase.dot

(See Attachments C and D)

The name and telephone number of the Centrelink contact is maintained in DMRS if the debtor wishes to discuss the recovery or seeks a review of the calculations.

For portion recovery, an automatic letter will be generated when the debt has been repaid advising the client of the date pension will be restored to the level of full entitlement.  If the debt is repaid in a lump sum, a letter should be sent to the client to acknowledge the payment once it has been processed.

DVA will need to notify Centrelink immediately if ongoing payments cease before the debt is fully recovered.  It is then Centrelink's responsibility to renegotiate repayment arrangements with the debtor.


Attachment A - Clearance Example

DEPARTMENT OF VETERANS' AFFAIRS

REQUEST FOR CENTRELINK  CLEARANCE

To be retained by Centrelink

Centrelink Clearance Office

DVA Reference No

Centrelink Fax No

DVA Assessment No

Centrelink Reference No

DVA Fax No (  )

PART A: (Completed by DVA)

1. APPLICANT'S DETAILS

SurnameGiven Name(s)Date of Birth

Name of Client

Name of Partner

Maiden Name/AKA

Address

2. The client and/or partner will be or has/ve been granted/increased

type of entitlement

with effect from

Client  :

? SP

? AP

? ISS

? WWP

? OP

? DP

? PA

? CSHC

/

/

Rate p/f

$

$

$

$

$

$

$

Partner:

? SP

? AP

? ISS

? WWP

? OP

? DP

? PA

? CSHC

/

/

Rate p/f

$

$

$

$

$

$

$

KEY: SP = service pension; AP = age pension; ISS = income support supplement; WWP = war widow's /war widower's pension; OP = orphan's pension; DP = disability pension; PA = Pharmaceutical Allowance; CSHC = Commonwealth Senior's Health Card;

3. Complete if granted benefit has varied in rate throughout the period

Type

Old % rate

New % rate

Old $

New $

Date of effect

DP

KEY: DP = disability pension; DP & LIM = disability pension with limitation ie. the DP amount  is limited due to payment of other compensation;

the actual (net) amount of DP received is shown

4. Complete if client or partner has been granted WWP

fromto

Date of death

Bereavement Period

Please Note: WWP is treated as income for Social Security pensions such as age, disability support, wife and carer until 20 March 1995. From 20 March 1995 the TOTAL amount of Social Security pension is cancelled. Other benefits such as sole parent pension, job search allowance, new start allowance, sickness allowance and or special benefit are not payable from date of grant of WWP.

for Deputy Commissioner

Date

DVA Contact Officer:

Phone Number:


DEPARTMENT OF VETERANS' AFFAIRS

CENTRELINK  CLEARANCE

Centrelink Clearance Office

DVA Reference No

Centrelink Fax No

DVA Assessment No

Centrelink Reference No

DVA Fax No

Warning: The attached information is strictly confidential.  If you receive this fax and you are not the intended recipient, please contact the sender by telephone.  This information is covered by Section 1312B of the Social Security Act 1991 and is protected information.  If you further disclose, record, or otherwise use this information, you will be committing a criminal offence and are liable to criminal prosecution, attracting a penalty of 2 years jail, a fine of $12,000, or both.  The authority to seek this information is contained in Section 128 of the Veterans' Entitlements Act 1986.

PART B: (Completed by Centrelink)

CENTRELINK ADJUSTMENT

SurnameGiven Name(s)Centrelink Reference No

Name of Client

Name of Partner

  • Pension or benefit from Centrelink will be cancelled/varied on the date indicated
  • Please recover the amount shown below – a recoverable debt under s. 1223(1) of the SSA
  • No current Centrelink payment record
  • Centrelink's current residential, income & asset details attached for War Widow/ers' Pension clearance
  • Not attached – reason _______________________________________________

1.Client

Cancelled / Varied

Rate p/f

Payment Type/s

Adjustment period

Adjustment amount

from

/

/

$

to

2.Partner

Cancelled / Varied

Rate p/f

Payment Type/s

Adjustment period

Adjustment amount

from

/

/

$

to

Delegate of the Secretary

Date

Centrelink Contact Officer:

Phone Number:

Area Office:

Fax Number:

Please ensure all clearances are signed, as we are unable to release any arrears based on an unsigned clearance, necessitating the return of the form for completion.

PART C: (Completed by DVA)

Attn Centrelink Contact Officer:

Adjustment amount of

$

for

was recovered on

/

/

  •    

outstanding balance of

$

is being recovered by DVA on behalf of Centrelink

  •    

outstanding balance of

$

is referred back to Centrelink

Adjustment amount of

$

for

was recovered on

/

/

  •    

outstanding balance of

$

is being recovered by DVA on behalf of Centrelink

  •    

outstanding balance of

$

is referred back to Centrelink

for Deputy Commissioner

Date

DVA Contact Officer:

Phone Number:


Attachment B - System  -  DMRS

How to ADD an overpayment for another Department

REMEMBER:  MUST BE IN “UPDATE” MODE   [lock]? [open lock]

Step 1

Click on the “[file]ADD Debts” Folder.

The signs – and + will appear.

Step 2

Click on the “+” sign.

This will open folders for adding a debt.

Step 3

Click on the “Type of Debt” arrow.

This will produce a drop down list.  Scroll down.

Click on “Overpayment”.

Step 4

Click in the “Total Amount of Debt” field.

Enter the total amount of the Debt.

“$” symbol should be used.

Step 5

Optional

Click in the “Agreed Recovery Date” field.

Enter the date recovery will commence from.

If this field is left blank, the business rule start date will be applied.

Step 6

Do not complete

“Lump sum Advance Details”.

Go to the “Debt Details” heading.

Step 7

Click on the “Method of Detection” arrow.

Click on appropriate “Method of Detection”.

Step 8

Click on  “No” for field “VEA Legislative Breach”

Click on “No” for field “Potentially Liable for Admin Penalty”

Click on “Yes” or “No” for field “SIU Case”

VEA does not apply to other Department Debts

Step 9

Optional

Enter “DVA Pos Number”.

Step 10

Optional

Enter relevant “Comments”.

No longer than 350 characters.

Step 11

Click on the “+” under the heading “Overpayment Type and Reason for Debt”.

Step 12

Click on the arrow under the field “Overpayment Type”.

Click on appropriate “overpayment type”:

  • Other Department DSS
  • Other Department ATO
  • Other Department DEET
  • Other Department DoD

Step 13

Click in the “amount” field.

Enter amount of overpayment for the debt type.

Step 14

Optional

Click on the arrow under the field “Reason”.

Click on appropriate “Reason”.

Step 15

Optional

Click on the arrow under the field “Event Date”.

Enter date.

Step 16

Optional

Click on the arrow under the field “Notification Date”.

Enter the date.

Step 17

Optional

UIN if someone other than the client should be contacted.

Step 18

Click on Agency Client Rego UIN.

Enter UIN (Unique Identification Number).

All known DSS agencies have been registered in VIEW.

For Changes and new offices contact XXXXX.

Step 19

Click on “Reference Number” field.

Enter Reference number.

Step 20

Optional

Click in the “Contact Surname” field.

Enter surname of the other agency contact officer.

Step 21

Optional

Click in the “Contact Forename” field.

Enter the first name of the other agency contact officer.

Step 22

Optional

Click in the “Telephone Area Code” field.

Enter the telephone area code.

Step 23

Optional

Click in the “Telephone number” field.

Enter the “telephone number”.


Attachment C – Recovery post-clearance debt: grant

Dear {courtesy title} {pensioner surname},

I am writing to you about your recent grant of {Service OR Disability} Pension.

{Service OR Disability} Pension Arrears

Your {Service OR Disability} Pension was granted with effect from {date of grant}.  The arrears of pension from this date, up to and including {end date} and amounting to ${arrears amount}, were withheld pending advice from Centrelink of a possible adjustment.

Commencement of Regular Payment

The regular payment of {Service OR Disability} Pension commenced on payday {first payday}.  This payment was for the pension period {start of pension period} to {end of pension period}.

Centrelink Adjustment

Paragraph for new grant of Service Pension:

Centrelink has now advised that for the period {start of adjustment period} to {end of adjustment period} you were paid ${adjustment amount} from that Department.  Having offset your arrears against this amount, a balance of ${overpayment amount} remains outstanding.  This means that your {Centrelink payment type} has been overpaid.

Paragraph for new grant of Disability Pension:

Centrelink has now advised that for the period {start of adjustment period} to {end of adjustment period} you were overpaid ${adjustment amount} from that Department.  Your (Centrelink pension type) was overpaid because the rate of that pension is affected retrospectively by your rate of Disability Pension.  Having offset your arrears against the overpaid amount, a balance of ${overpayment amount} remains outstanding.


Recovery of Overpayment

To recover this amount, ${recovery portion} will be deducted from your pension each payday, commencing on {1st payday for deductions}.  The final deduction will occur on {last payday for deductions} and will be for the balance of the overpayment equalling ${final deduction amount}

If you wish to repay the debt in one lump sum or have any questions about the deductions, please contact me on {telephone number}.  If you are calling from outside the metropolitan area, dial our FREECALL number shown at the bottom of this letter.  You will need to quote reference number {DVA File No} when you call.

Right of Review

The recovery of this overpayment is undertaken by DVA on behalf of Centrelink.

If you are not satisfied that the amount used to adjust your {Service OR Disability} Pension arrears represents an accurate calculation of the amount of {Centrelink payment type} you received from Centrelink, you may apply for a review of that calculation.   Please contact me to discuss your concerns and I can arrange for the appropriate Centrelink office to be in touch with you.

Yours sincerely


Attachment D – Recovery post-clearance debt: increase

Dear {courtesy title} {pensioner surname},

I am writing to you about your recent increase of Disability Pension.

Disability Pension Arrears

Your Disability Pension was increased with effect from {date of increase}.  The arrears of pension from this date, up to and including {end date} and amounting to ${arrears amount}, were withheld pending advice from Centrelink of a possible adjustment.

Adjustment to Regular Payment

The adjustment to your regular payment of Disability Pension commenced on payday {first payday}.  This payment was for the pension period {start of pension period} to {end of pension period}.

Centrelink Adjustment

Centrelink has now advised that for the period {start of adjustment period} to {end of adjustment period} you were overpaid ${adjustment amount} from that Department.  Your (Centrelink pension type) was overpaid because the rate of that pension is affected retrospectively by the increase in your rate of Disability Pension.  Having offset your arrears against the overpaid amount, a balance of ${overpayment amount} remains outstanding.

Recovery of Overpayment

To recover this amount, ${recovery portion} will be deducted from your pension each payday, commencing on {1st payday for deductions}.  The final deduction will occur on {last payday for deductions} and will be for the balance of the overpayment equalling ${final deduction amount}

If you wish to repay the debt in one lump sum or have any questions about the deductions, please contact me on {telephone number}.  If you are calling from outside the metropolitan area, dial our FREECALL number shown at the bottom of this letter.  You will need to quote reference number {DVA File No} when you call.


Right of Review

The recovery of this overpayment is undertaken by DVA on behalf of Centrelink.

If you are not satisfied that the amount used to adjust your Disability Pension arrears represents an accurate calculation of the amount of {Centrelink payment type} you received from Centrelink, you may apply for a review of that calculation.   Please contact me to discuss your concerns and I can arrange for the appropriate Centrelink office to be in touch with you.

Yours sincerely