C07/2006 INDEXATION OF BRITISH OFFICIAL PUBLIC SERVICE AND ARMED FORCES PENSIONS

Purpose

The purpose of this Departmental Instruction is to advise of processing arrangements for the automatic indexation of British Official Public Service and Armed Forces pensions (formerly Indexed BRI, code 09). The reason for the change of terminology was explained in DI C04/2004 British Income.

Increase in Public Service Pensions

The British Government has announced that British Public Service Pensions will rise in April 2006 by 2.7% in line with their Retail Price Index.  The pensions affected are listed below and should be recorded on PIPS as foreign superannuation (British Official Public Service/Forces):

• British Official Public Service Pension as listed at http://sharepoint/Documents/programsandprojects/0898571E.tr5
• British Armed Forces pension (ie Royal Army, Royal Navy or Royal Air Force).

Date of effect

The date of effect to be used for the 2.7% variation is 11 April 2006, for payday 27 April 2006.

The conversion factor for this indexation is 1.027

The new amount of pounds sterling to be recorded will be calculated as follows:

The variation percentage (2.7%)

       -----------------------------                 +  1  =  Conversion factor

100

The Australian dollar amount will then be reassessed accordingly.

The conversion factor for this indexation is 1.027.

Date of processing run

The processing run for this exercise will take place in the week commencing

10 April 2006.

Manual cases

Cases that are in investigation, submission or determination status at the time of the run will be frozen and listed for subsequent manual processing.

Content of advice letters

A one-page advice will be generated for all clients who have a variation to their rate of DVA pension payment because of the indexation exercise. For clients with a Group Destination, advices will be addressed to the Public Trustee.

The advice will provide details of:

• the indexation of the British pension,
• the DVA payment (in the payment information line), and
• treatment changes, reductions to nil and changes to fringe benefit entitlement where applicable.

A Payment Information Attachment will not be included.

Advice letter dispatch and checking

All advices produced from this processing exercise will be printed at the IBM Printhub at St Leonards in Sydney, and couriered to each State Office for checking prior to sending to clients. You should allow two working days following the processing for the advices to be delivered to your office.

Please check advice schedules to reconcile Group Destination cases, and check all advices before they are sent to ensure they contain correct information.

Indexation of British war pensions

British war pensions (British DP) will also increase by 2.7% on 11 April 2006. A separate Departmental Instruction will be issued about the application of this increase to:

• British war pension in assessments of income support supplement, rent assistance and age pension;
• EATS and other composite cases.

Indexation of British social security pension

British social security pensions will not be indexed automatically. See Part 10, Chapter 1, Section 5 of the CLIK Policy and Procedure Libraries for more information.

Contact officers

The Income Support contact officers for this exercise are:

• Amy Curry, ext 16734
• Bob Turner, ext. 16079.