C02/2010 Property Valuation Exercise - 2009/2010 Financial Year

Amends DI No.

N/A

Replaces DI No.

C36/2008

Replaced by DI No.

C04/2011

Purpose

The purpose of this Departmental Instruction is to provide information on the annual property valuation exerci — se.  Details on each of the four stages are provided below.

Background

Every October/November, I — ncome S — upport cases requiring a property valuation are automatically selected and forwarded to the Australian Valuation Office (AVO) for valuation.  Once the valuations have been completed, cases are returned to DVA with the new valuation amount.

A listing of manual cases (those that have not previously been valued by the AVO) is also produced at the time of the bulk run.  Income Support is required to submit individual requests for valuation for these cases to the AVO if required.

Production run

The data extraction was carried out on 20 November 2009.  The data containing information on the automatic reviews was provided to the AVO on 7 December 2009.  An Excel spreadsheet containing the manual cases has been forwarded to Angelo Corbo, Assistant Dir — ector, Departmental Initiated Reviews, Income Support Business Group for further action.

The spreadsheet is also available at TRIM Ref 105536E for the information of staff and to avoid duplication in AVO requests.

Number of cases extracted

The data has been extracted through th — e AIS2000 system.

The following is a breakdown of automatic and manual cases extracted from this year's bulk run:

State

Auto

Manual

NSW

456

71

QLD

428

55

SA

172

18

TAS

112

6

VIC

489

52

WA

185

19

Total

1842

221

Criteria for extracting cases

The following criteria were used for extracting cases:

• All income support pension recipients (SP, AP or ISS) who have a property, farm or sublet portion of their home and who are either;

• assets tested, or
• income tested and have total assets in their assessment within $10,000 of their prescribed assets limit (PAL).

Cases excluded from exercise

The following pensioners have been excluded from this year's bulk run:

• Pensioners who have had a property valuation done since the last bulk run (19 November 2008);
• All single pensioners who are assessed as blinded and are not paid rent assistance; and,
• All couples where both are assessed as blinded and are not paid rent assistance.

Manual cases for further action

Manual cases have been forwarded to Angelo Corbo, Assistant Director, Departmental Initiated Reviews, Income Support Business Group in an Excel spreadsheet for further action.

The cases will be processed in a centralised point yet to be determined.

Using AVO Online Valuation Register

For the manual cases where a property valuation is required, a request for valuation should be submitted via the AVO Online Valuation Register under the project code of Annual Bulk Exercise.

3 month period of grace

There is a maximum 3 month grace period commencing from the date of the new pension rate determination for those income tested pensioners affected by property reviews.  The grace period enable — s pensioners to rearrange their circumstances if they choose, before the pension is varied due to the property valuation.

This policy applies in circumstances where the property valuation affects the entitlement to the extent of moving the pensioners from the income test to the assets test or reduces their pension to nil.

Refer to DI C44/2005 for further information.

For pensioners receiving maximum rate service pension and war widow(er)s who would be receiving maximum rate income support supplement other than due to the application of the ceiling rate, the 3 month grace period also applies to these pensioners when moving from maximum rate pension to being assets tested or to nil rate pension due to the value of their assets.

Refer to DI C17/2007 for further information.

Processing of cases that may require 3 month period of grace

For the 2009/2010 property valuation exercise 113 automatic cases and 37 manual cases have been identified as currently being income tested and therefore possibly affected by the 3 month period of grace.

The AVO will provide updated valuation information for the income tested cases on 18 February 2010.

Where the pensioner qualifies for the 3 month period of grace, the determination to reduce pension with effect from 1 July 2010 should be made by 1 April 2010 and the pensioner notified accordingly.  These valuations are provided earlier to allow for the period of grace to be provided before the normal date of reduction on 1 July.

AVO conduct valuations

The AVO will conduct the property valuations in the period from December 2009 to May 2010.  The AVO will provide updated valuation information to DVA on 18 February 2010 for income tested cases and 4 May 2010 for assets tested cases.

Updating valuations

Once the valuation data for assets tested cases is received back from the AVO, a run will be scheduled to automatically upload and reassess the client's record by the AVO Batch Reassessment program.

In previous years all income tested cases had to be actioned manually. In 2010 t — he batch process will be altered to allow for income and assets tested cases to be automatically updated.

Date of valuation to be used in PIPS

The date of valuation to be used is 20 November 2009 when updating cases in PIPS (Pensioner Information Processing System) for this exercise.

This is not necessarily the date that the AVO has valued the property.

It is essential that this date be used to enable all the appropriate cases to be selected for next year's exercise.  Using another date creates complications for the bulk extraction.

Date of effect – reduction of property value

The date of effect where the value of the property has reduced is the date the new valuation data is returned from the AVO.

Date of effect – increase of property value

For cases where the value of the property has either increased or remained unchanged the date of effect is to be 01/07/2010.  1 July is the effective date of the annual indexation of the Ordinary Income Free Area, Asset Value Limit and Adjusted Income Free Area.

Processing Information

Screens and processing information for PIPS/PC can be found in Departmental Instruction C54/96.

Contact Officer

The contact officer — s for this exercise is Sam Powell (02) 6289 6592, Cards, Systems & Advices, Income Support.