C05/2012 Property Valuation Exercise - 2011/2012 Financial Year

Amends DI No.

N/A

Replaces DI No.

N/A

Purpose

The purpose of this Departmental Instruction is to provide information on the annual property valuation exerci — se for the previous financial year.  Any changes to this program because of the savings that need to be made in response to the additional efficiency dividend imposed on DVA for the 2012-13 financial year will be advised through a later DI.

Overview

I — ncome S — upport cases requiring a property valuation are selected and forwarded to the Australian Valuation Office (AVO) for valuation.

Information on properties that have previously been valued by the AVO is sent electronically to the AVO.  On return to DVA, the new valuations are loaded in a batch run and pensions reassessed automatically.

Properties that have not been previously valued by the AVO are identified for manual investigation and a request for a valuation using AVO Online is sent.

Manual action is also required:

• for assessments moving from the income test to the assets test as a result of the property valuation; and
• where the property has been sold or appears to be incorrectly recorded on the property screen.

Changes to the exercise

Following a review, and in consultation with the AVO, there are a number of changes to the 2011/12 annual exercise.  These are:

• The extraction of the manual cases (those that have not previously been valued by the AVO) was completed separate to the automatic cases.
• The period between the provision of data to the AVO and the return of the valuations was shortened.
• The date of valuation used by the AVO has been changed to a later date to reduce the lag time between the valuation and the pension reassessment.
• The actual date of valuation (31 March 2012) will be recorded as the valuation date when updating cases in the Pensioner Information Processing System (PIPS).

Data extraction

In previous years, the data extraction for the exercise was completed on a single day.  Under the revised arrangements, the manual cases and the automatic cases were extracted separately.

The earlier extraction of the manual cases allows sufficient time to complete investigations and to submit the individual valuation requests to coincide with the provision of the automatic cases for valuation to the AVO.

For this year's exercise, the relevant dates for data extraction were:

Manual cases data extraction — 3 November 2011 from AIS data of
28 October 2011

Automatic cases data extraction — 16 January 2012 from AIS data of
13 January 2012

Automatic cases to AVO — 18 January 2012

Criteria for extracting cases

The following criteria were used to extract the cases:

All income support pension recipients (SP, AP or ISS) who:

• have a property, farm or sublet portion of their home; and
• are either:

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

Additional cases

An additional 120 income tested assessments with property where the total assets are within $10,000 and $50,000 of the PAL were randomly selected for inclusion in this exercise.  The outcomes of these reviews will be separately analysed to help determine the level of risk of this population. The 120 cases are included in the total number of cases shown below.

Number of cases extracted

The following is a breakdown of the number of automatic and manual cases extracted for 2011/2012 using the AIS2000 system:

State

Auto

Manual

Total

NSW

597

49

646

QLD

476

53

529

SA

192

22

214

TAS

141

10

151

VIC

36

66

102

WA

476

20

496

Total

1918

220

2138

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;
• All single pensioners who are assessed as blinded and are not paid rent assistance; and
• All couples where both members are assessed as blinded and are not paid rent assistance.

Manual cases

Robyn Del Casale A/g Assistant Director, Compliance and Review Exercises, Income Support and Grants, will oversee the manual cases of this year's exercise.

All the manual cases arising from the initial data extraction (not previously valued by AVO) are being processed by Income Support in Sydney.  W — here a property valuation is required, a request for valuation is submitted via the AVO Online Valuation Register under the project code of Annual Bulk Exercise.

Income Support Sydney are actioning all cases where the assessment moves from the income test to the assets test as a result of the property valuation, including the follow up action at the end of the 3‑month period of grace.

Income Support Adelaide is responsible for the remaining manual cases arising from the annual exercise and cases where the property has been sold or has been incorrectly recorded.

3 month grace period

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.

For the 2011/2012 property valuation exercise 238 cases (153 automatic and 85 manual) were identified as income tested and therefore possibly be affected by the 3‑month period of grace.

The AVO provide — d updated valuation information for the income tested cases on 1 March 2012.

AVO conduct valuations

The AVO conducted the property valuations in the period from January 2012 to June 2012.  The AVO provide — d updated valuation information to DVA on 1 March 2012 for income tested cases and on 1 June 2012 for assets tested cases.

Updating property value and pension

An automatic run is scheduled for 11 July, 2012 to automatically upload and reassess the client's record by the AVO Batch Reassessment program.  The timing of the run has been deferred due to the effects of the early processing for payday 12 July 2012.

Date of valuation to be used in PIPS

The date of valuation to be used is 31 March 2012 when updating cases in PIPS for this exercise.

This is the date that the AVO has used to value the properties.

In previous years an arbitrary date was used to enable all the appropriate cases to be selected for the following year's exercise and to minimise complications for the bulk extraction.  However, this arrangement has caused confusion to staff and to clients.  To address this issue, the actual date that the AVO is using for the 2012 bulk property valuation exercise will be used in PIPS and to display in VIEW.

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.  In most cases this will be from 1 June 2012, being the date that the new valuation data was received 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 10 July 2012 for payday 26 July.  This date has been determined because of the effects of the early processing for payday 12 July 2012.

Future Property valuation exercises

Income Support and Grants Branch commenced preparations for this exercise in October 2011.  Future annual exercises are under review due to the efficiency dividend and any changes to the current process will be notified separately.

Contact Officers

The annual exercise is managed jointly by Jene Wu, Assistant Director, Cards and Advices, and Robyn Del Casale A/g Assistant Director, Compliance and Review Exercises, Income Support.  They can be contacted on 02 9213 7160 and 08 8290 0439, respectively.