C04/2004 British Income

Purpose

This Departmental Instruction is to advise of changes to the terminology, policy and procedures relating to British pensions (other than war pensions) and other British income.

Background

There have been substantial inaccuracies detected in the recording of British pensions, annuities, and war disablement pensions. Many pensions have been recorded, and therefore indexed, incorrectly. Terminology used by the UK government has changed and there is no longer any payment called “BRI”.

Clean-up Activity

A list of British pensions that appear to have been incorrectly recorded has been provided to each processing area. In each case, the rate of British pension held is being reviewed, the pension correctly recorded and a review set where applicable.

New British Pension Terminology

The terminology used for British pensions has been changed in PIPS, VIEW, advices and CLIK. The terms “British Retirement Income” and “BRI” are no longer used. The table below details the new British pension terminology.

New Name

Old Name & Code

Includes

British Official Public Service/

Forces

British Retirement Income (Indexed) - 09

Armed forces pension (not war pension)

Official public service pensions shown on this list:  http://sharepoint/Documents/programsandprojects/0898571E.tr5

British Social Security Pension

British Retirement Income - 08

Pensions and benefits from the UK Department of Work and Pensions (formerly DHSS)

Jersey and Guernsey social security pensions

British Other Income

British Sterling Payments (Not BRI) - 07

All other British pensions except war disablement pension, for example:

Private sector superannuation, eg British Airways, ICI, Legal & General

Merchant navy superannuation pension

Public service pensions not on the list of official public service pensions

Change of order of British pensions in PIPS

The order in which the British pensions appear in the Foreign Super drop-box in PIPS has changed. They now appear in this order:

British Official Public Service/Forces

British Other Income

British Social Security Pension

UK war disablement pension

Convert War Disablement Pension and War Widow/Widower's Pension paid by the UK to an Australian dollar amount and record it on the Disability Pension screen.

Annuities

Do not record British annuities as Foreign Super. If an annuity is purchased overseas, record it on the Foreign Annuity screen, which will require an asset value to be entered. For the correct assessment of foreign annuities, refer to:

CLIK Policy Part 10 Chapter 1 Section 7 Income from Other Sources

CLIK Policy Part 10 Chapter 2 Section 4 Assessing Personal Assets and Investments

Investment Database Unit: http://sharepoint/servingourcustomers/incomesupport/idu/Pages/InvestmentDatabaseUnit.aspx

Other regular British payments

Record other regular pounds sterling income as British Other Income on the Foreign Super screen. This includes all other amounts earned, derived or received by the pensioner for their benefit, such as earnings, profits, returns on investment and other forms of remuneration. The specific review policy appropriate to the income type must be applied. The Foreign Super screen will be renamed the Foreign Income screen in the next PIPS release.

Lump sum British payments

Where the payment is a lump sum or annual payment and s.46A of the VEA or s.1073 of the SSA are applied, calculate the fortnightly amount of Australian dollars received and record it in the relevant PIPS screen (not the Foreign Super screen).

Meaningful Product and Reference Number descriptions

Always complete the Product and Reference Number fields. For pensions, obtain the correct product description from a recent pension statement and update it if the name of the pension changes. The table below shows examples and non-examples of meaningful free text.

Example

Non-Example

Museum of Wales Pension Scheme

British Retirement Income

Chesham Council Library Earnings

Brit Widows Payment

Navy Pension

Super

Industrial Injuries Disablement Benefit

Pension Payment

Accuracy of foreign income amount

The foreign currency amount of some British social security pensions currently recorded runs to three decimal places even though the payment is weekly. This is because the pension was once recorded in Australian dollars and was converted to pounds sterling after a number of exchange rate variations. Correct such cases by requesting the file and finding the exact foreign currency amount paid. Amend the existing amount in PIPS.

British Official Public Service and Armed Forces Pensions

These pensions are increased each April by an amount determined by Her Majesty's Treasury. The increase is applied automatically in a batch run. See Departmental Instruction 12/2003 for details of the last increase.

British Social Security Pensions

The table below shows the indexation for British social security pensions. Due to the variation in indexation rates and times, they currently cannot be indexed automatically. Set a review for the expected date of the next increase. For UK pensions that are subject to increase, this will be early April.

Pension

When Indexed

For Whom

Jersey pension

30 June each year

Residents of all countries including Australia

Guernsey old age pension

January each year

Residents of all countries including Australia

UK Industrial Injuries Disablement Benefit

April each year

Residents of all countries including Australia

All other UK pensions from The Pensions Service of the Department of Work and Pensions or

April each year. Different indexation rates may apply to different components, eg:

State Pension

Graduated Retirement Pension

Age Allowance

Temporary or permanent residents of the European Economic Area or countries which have a social security agreement with the UK: http://www.thepensionservice.gov.uk/atoz/atoz — d — etailed/livingoverseas.asp#eea

British Other Income

Most other regular payments in pounds sterling will be subject to increase and must be reviewed manually. Set a review for the expected date of the next increase and ensure the review is carried out.

Pensioner's obligation

It is the pensioner's obligation to advise the exact rate of British pension they receive, and to advise of any increase. These obligations are reinforced in Your and Your Pension, advices, and fact sheets on the internet (fact sheets on the intranet are yet to be updated).

When a pensioner does not know their rate

When a pensioner in receipt of a British pension does not know their current rate of pension, they should request a statement from their pension provider and forward a copy to DVA. For UK social security pensions from The Pensions Service, the address is:

Pensions and Overseas Benefits Directorate (Periodic Payments)

DSS Benton

Newcastle Upon Tyne NE98 1BA

United Kingdom

Contact NO or refer to British Pensions Report

If you have any questions about this Departmental Instruction, please contact Veronica Glasson. Alternately, you may consult the British Pensions 2003 report at TRIM 0348275E:

The report is 53 pages and details which pensions are paid by Britain, how to identify them and whether they are indexed.

Policy and Procedure Libraries in CLIK

The publication of British pension policy and procedures will be announced in a future CLIK Release Stateline, and British pension contact officers will be advised by email.