C05/2013 March 2013 Global Refresh of Managed Investments, Shares and Overseas Exchange rates Letter Production and Mailouts

Replaces DI No.

N/A

Purpose of Instruction

This Departmental Instruction is to provide information about the processing arrangements and advice letter production and mailout for:

• the March 2013 Statutory Increase and Global Refresh of Managed Investments (MIs) and Shares (SHs); and
• the Global Refresh of Overseas Exchange Rates.

The Clean Energy Supplement (CES) will commence from 20 March 2013. This instruction also contains information about the advice letter for the CES recipients.

Introduction

Each quarter the Department varies pensions and allowances in accordance with provisions contained in the Veterans' Entitlements Act 1986 (Statutory Increase or 'SI').  Each March and September, the movements in the Cost of Living Index and the Global Refresh of Managed Investments (MIs) and Shares (SHs) data are combined as one quarterly reassessment process.

In March and September, advice letters are generally sent to only those income support pensioners paid at less than the maximum rate of service pension, income support supplement or age pension who have managed investments and/or shares recorded in their pension assessments and who are affected by the Global Refresh of MIs and/or SHs reassessment.  This typically affects approximately 27,000 households.

For this quarter there will be a change to the deeming interest rates from 3% to 2.5% for amounts up to and including $45,400 ($75,600 per couple) and from 4.5% to 4% for amounts over $45,400 ($75,600 per couple).  This typically increases the number of advice letters produced to approximately 54,000.

From 20 March 2013 the Clean Energy Supplement (CES) will commence.  The Department will write to all clients in payment following the March 2013 processing of service pension (SP), income support supplement (ISS), age pension (AP), war widow/er pension (WWP), disability pension (DP), seniors supplement (SS), MRCA Special Rate Disability Pension (WDP) and MRCA Wholly Dependent Partner (SRDP) payment who will receive the fortnightly CES from 20 March 2013.  It is estimated approximately 240,000 advice letters will be produced.

The advice letters will be specially revised versions of the usual 'automatic' advice format.  The advices will provide clients with information about the CES and the payment amount.  A personalised letter from the Minister will be sent with the advice letter for the CES recipients.

Each mailpack will also contain a DL size information flyer about the DVA services available online through MyAccount.

Significant Issues

Issues of significance with regard to this mailout are as follows:

• The asset value of MI and SH data will be reassessed, except for clients in bereavement period.
• The deeming interest rates will be reduced by 0.5%.
• An advice letter will be sent to all clients receiving the CES payment from 20 March 2013.
• The CES recipients will also receive a personalised letter from the Minister.
• CES will commence after 20 March 2013 for the following groups and they will not receive an advice letter in this mailout:

• MRCA Permanent Impairment payment (CES will commence from 1 July 2013); and
• recipients of fortnightly education allowances under the VCES and MRCAETS (CES to commence from 1 January 2014).

• Clients residing overseas permanently or are absent from Australia temporarily for longer than the portability period will not be entitled to CES and will not receive an advice letter, except where:

• there is MI and/or SH in the assessment; and
• the income support pension is payable at less than the maximum rate.

• An advice letter without CES information will be produced where payment is reduced to nil after reassessment and no other payment is payable.
• A MyAccount flyer will be included with all letters.
• Staggered lodgement of advices with Australia Post to commence on Thursday 21 March and be completed by COB Wednesday 27 March 2013.

Removal of Contact Details from automatic advice letters

Individual staff contact details previously appeared at the top left-hand corner of advice letters.  The Veterans' Access Network contact number now replaces the individual staff contact information in advice letters, following promotion of VAN as the national point of contact for clients.

Advice Letter Target Audience

A letter will be produced for the following clients following processing of the SI, the Global Refresh of MIs and/or SHs, the change of deemed interest rate, and the commencement of CES:

• All SP/ISS/AP/DP/WWP/SS/MRCA WDP/MRCA SRDP.
• SP/ISS/AP recipients who have MIs and/or SHs in their assessment and are reduced to nil as a result of the reassessment.
• Overseas residents with MI and/or SH in the assessment receiving the income support pension at less than the maximum rate.
• MI and/or SH information will only be provided to Less Than Max Rate recipients who have MI and/or SH.

Introductory Paragraphs for SP/ISS/AP Client's Advices

AP clients in receipt of DFISA will have 'multiple outcome' paragraphs printing as part of their introductory paragraphs – advising them of a variation to their AP payment and DFISA payment.

All AP/SP/ISS client letters will have either the single or multiple outcome introductory paragraphs printing, advising them of the outcome of their payments, as follows:

Multiple Outcome Paragraphs:

This is to advise you that your:

• age pension has been increased/reduced/reduced to nil.
• Defence Force Income Support Allowance (DFISA) has varied/reduced to nil.
• rent assistance has been granted/increased/reduced/cancelled.

This change will take effect from 20 March 2013.

Single Outcome Paragraph:

This is to advise you that your service pension has been increased/reduced/reduced to nil.  This change will take effect from 20 March 2013.

Clean Energy Supplement (CES)

A paragraph introducing the Clean Energy Supplement will be present for all CES eligible clients.  For DP only, WWP only and MRCA WDP and MRCA SRDP recipients, this will be the first paragraph of the letter.

Clean Energy Supplement

You are now receiving a Clean Energy Supplement as part of your regular payment.  This ongoing assistance is part of the Household Assistance Package under the Australian Government's plan for a Clean Energy Future and will help you with household costs associated with the carbon price.

This is a tax exempt payment and does not count as income for income and asset assessment purposes.

Payment  Information

All letters will contain payment information as an attachment.  The following paragraph will appear in the body of the letter.

Payment Information

Details of your fortnightly payments are provided in the Payment Information Attachment.

Financial Assets Reassessment

The asset value of MI and/or SH data will be reassessed as part of the processing.  Less than maximum rate income support clients with MI and/or SH data recorded in their assessment will have a paragraph advising of the 'Change to Value of Shares and/or Managed Investments'.

This paragraph advises clients about the reassessment program and explains that:

'The asset value of your shares which are listed on the Australian Stock Exchange and/or unit based managed investments has been reassessed.  The adjusted value of these investments has been used to work out your pension payment and has resulted in a variation to the amount of pension paid to you....'

OR

'has resulted in your pension being varied to nil....'

Maximum rate clients with or without MI and/or SH in their assessment will not receive this paragraph.

Managed Investments and/or Shares Information Attachment

All less than maximum rate clients with MIs and/or SHs recorded in their assessment will receive a full listing of all their MIs and/or SHs regardless of which MIs and/or SHs have been reassessed.

Clients will not be issued with a listing of their Full Income and Assets.

Change to Pension due to Indexation Increases

All letters will continue to have the paragraph advising that 'Your pension has been adjusted in line with increases in the cost of living or wages where applicable.'

Information on indexation adjustments and pension increase will also be provided in the March edition of Vetaffairs, which is to be distributed from Tuesday, 2 April 2013.

Deemed Interest Rate Change

There will be a change to the deemed interest rates from 3% to 2.5% for amounts up to and including $45,400 ($75,600 per couple) and from 4.5% to 4% for amounts over $45,400 ($75,600 per couple).

Clients with deemed income will receive an explanatory paragraph advising of the new deemed interest rates and a table showing a breakdown of their deemed income.

Obligations

Full and Partial obligations are to be suppressed for all letters produced.  Reference will be made to obligations issued to clients in previous letters and in the case of SP and ISS recipients, reference will also be made to obligations provided in the 'You and Your Pension' Booklet.

The Financial Obligations paragraph (including the Prescribed Rates), will be present in the advice for all clients, except for pensioners who are reduced to nil.

AP clients who are reduced to nil, but eligible for payment of DFISA will receive their Financial Obligations paragraph including their prescribed rates.

Right of Review

A right of review paragraph will be present in all letters.

Treatment Advices to be Checked

The Enclosure (treatment) advice letters will be printed at the nominated printer at each location.

These letters should be checked for correctness, and reconciled against the reports received in each location to ensure they reflect the correct treatment paragraphs.  It should be noted that not all clients who have an advice produced due to a treatment change will have MIs and/or SHs in their assessment.  Clients who do not have MIs and/or SHs in the assessment will not have MIs and/or SHs related paragraphs printing in their advice.

Tasmanian Overseas Clients' Advices

Advice letters for Tasmanian Office clients with an overseas postal address will have their advices printed and posted directly from the mailing house.

No Advices for Blind Clients

Blind clients will not receive an advice.  Where a member of a couple is assessed as 'blind' - a single advice will be produced for the non-blind member who may be affected by the processing.

An exception to this rule is where a Blind client with MIs and/or SHs in their assessment is also in payment RA, which is subject to the income and assets tests and as such, may result in a variation to their RA payment.  Where there is a variation to the RA payment for these clients, an advice will be produced.

General Information Sheet

The General Information Sheet (GIS) will not be produced as part of each client's letter for the March processing.

For information, the GIS will only be produced in the following circumstances:

• as part of the annual end of financial year (June) mailout
• as part of an income support pension new grant advice
• as part of a daily advice when a client is switched over from transitional to non-transitional assessment

Pensioners who reside overseas permanently will not be given the GIS to avoid confusion, because some components of the pension supplement listed (PS non-taxable and PS flexible) are not payable to overseas pensioners.

Single & Joint Addressed Letters

All service pension and income support supplement recipient couples will receive a joint advice, provided the pensioner addresses are identical.  The batch address defaults determining single and joint advices have been aligned with the PIPS PC daily advice defaults.   Where both members of a couple have the sam — e postal address recorded, a joint advice will be produced.  This includes illness separated couples.

Important to note: Staff are reminded when granting Age Pension or when clients in a joint assessment request separate or single advices, they need to update this information using the mainframe PRODIMS - Client Correspondence Client Options (CO.CO) Screen - prior to the processing run to initiate the client request.  The advice default requests set in CO.CO will override the DOCGEN and PIPS advice rules.

Age pensioner couples will receive separate letters if the advice default request has been set in CO.CO.

Minister's Letter

For all CEP recipients, a letter from the Minister regarding the commencement of the Clean Energy Supplement fortnightly payment will be the last sheet of their advice letter.

The content of this letter will be provided in a separate Businessline.

MyAccount Information Flyer

A MyAccount flyer about the DVA services available online will be included with all advice letters in this mailout.

A copy of the flyer will be provided in a separate Businessline.

SI Processing

SI Processing, the Global Refresh of Shares, Managed Investments, change to Deemed Interest Rates and CES payment processing are scheduled to commence from Saturday 9 March 2013 through to Sunday 10 March 2013.

Critical Dates

Processing within DVA (includes 'advices' processing)

Friday (9 pm) 8 March 2013 – Sunday 10 March 2013

Transmission of Production Data to Mailing House

Sunday (pm) 10 March 2013

Mailing House to commence production of Advice Letters

Thursday 14 March 2013

Mailing House to commence lodgement of Advice Letters with Australia Post

Thursday 21 March 2013

Mailing House to complete lodgment of all Advice Letters with Australia Post by COB

Wednesday 27 March 2013

Expected Client Numbers

The number of letters to be sent nationally is estimated to be approximately 240,000, which is much higher than the March 2012 exercise, and statistics for that mailout is therefore not comparable.  For reference, the estimated number of mailpacks generated for each location in the March 2013 SI mailout is listed below:

State

Number Of Advice Letters

NSW (and ACT)

78,134

VIC

52,062

QLD

60,055

SA

21,519

WA

22,550

TAS

8324

TAS (O — verseas)

700

MRCA clients

629

TOTAL

243,973

Production of Letters

The mailpacks will be produced at Computershare Ermington premises, a suburb of Sydney, New South Wales.  All mailpacks will be lodged with Australia Post from this site.

Staggered Lodgement of Letters

Mailpack lodgement with Australia Post will be staggered by state from Thursday 21 March with final lodgement by COB Wednesday 27 March 2013.

The lodgement schedule as requested by the Client Contact, Policy & Communications Branch is as detailed below.

File Name

Lodgement with Australia Post

WA

Thursday 21 March

SA & MRCA clients

Friday 22 March

QLD

Monday 25 March

NSW

Tuesday 26 March

VIC

Wednesday 27 March

TAS & TAS Overseas

Wednesday 27 March

Progress Reports

Regular updates of the mailpack production and lodgement will be provided to the Income Support contact officers by the Cards and Advices Team.

DFISA Advices from Centrelink Processing

DVA suppressed all Centrelink daily DFISA variation advices with an effective date of 5 March 2013, which are transmitted to DVA following the Centrelink processing run.  All other advices will be printed as part of the normal processing, including Centrelink DFISA cancellation and grant advices.

Foreign Pension Refresh Program known as GROOVER

The foreign pension refresh program referred to as 'GROOVER' (Global Refresh Of Overseas Exchange Rates) is a separate processing exercise to the March 2013 Global Refresh processing and is scheduled to run on the evening of Wednesday, 13 March 2013. The effective date of the Foreign Pensions Refresh Run is 20 March 2013 for payday 4 April 2013.

Separate Foreign Income advices are produced for clients who have foreign income, and whose pensions have been varied because of the GROOVER run.  A sample GROOVER advice can be found at Attachment B.

About 500 GROOVER advices are expected and are to be printed locally.  The advice letters will be sent to nominated printers at each location for printing and mail processing by Systems Support Officers (SSOs).

A small number of streamed advices will also be printed.  These letters should be checked for accuracy and reconciled against the advice schedule reports.

All GROOVER advices must be held pending notification of the successful lodgement of all the March quarterly advices.  This will ensure that pensioners receive their advice letters in chronological order.

Please note:  The British Social Security Pension (type 08), British Official Public Service/Forces pension (type 09) and British Other Income (type 07) are not included in the GROOVER update.  Instead they are regularly updated in British Pensions exchange rate variation exercises (commonly known as BRI runs) whenever the pound Sterling exchange rate varies by 2.5% or more.

Streamed Advices

Several categories of advices are streamed out to print at nominated printers at each location, as they require additional checking and manual actions.

The following advice types are streamed:

• Enclosure (treatment eligibility or student child change);
• Overseas postal address (except Tasmanian clients);
• Reduction to nil.

They are to be printed at state office printers listed below:

SA — VSSOPRO06

TAS — VTSOPR03

WA — VWSOPR01

VIC — V005P

NSW — N607P

QLD — VQSOPRO1

These advices, in particular treatment eligibility change ones, should be checked for correctness, and reconciled against the reports received by each Office.

Reduction to Nil advice letters also require inclusion of Commonwealth Seniors Health Card (CSHC) claim forms, CSHC fact sheets and reply paid envelopes to the mailpacks.

Please note: A MyAccount flyer should be included with each advice letter.  Income Support Contact Officers are to email Advices Help Desk – ACT to advise of the number of flyers required at their location.  Supply of the flyers will be sent by internal mail as soon as they are available.

ZIP Files of Advice Schedule Reports

A Zip File listing details of all clients who receive an advice will be emailed to the Contact Officers following the processing run.  The Zip File replaces the Advices Schedule Report, which is too large to print on the printers in each office.

Reprints of Advices Available using VIEW – Advices Tab

Reprints of individual advice letters produced from the quarterly processing can be requested via VIEW – Advices Tab reprint facility.  Quarterly advice reprints are available and can be requested from day one of the next quarter i.e. March quarterly advices from 01/04/yyyy, June quarterly advices from 01/07/yyyy and March quarterly advices from 01/10/yyyy.

'HELD' Advices to be Forced

As part of the Batch processing run any advices in 'Held' status will be forced to print.  Forced held advices will print at each respective Office's nominated printer as part of the production processing.

Please ensure your designated printer is fully operational during the processing period.  These advices will need to be checked to ensure the information in them is correct prior to posting.

Holding of daily advice letters

Daily advice letters produced after the processing run on 9 – 10 March 2013 should be held pending notification that all the March 2013 quarterly letters have been dispatched.  This will ensure that pensioners receive their advice letters in chronological order.

Income Support  Contact Officers

A contact person from each State is required to act as a liaison point for the Cards and Advices Team and is to be the responsible person for distributing any information regarding the March 2013 Global Refresh mailout to staff.

The Income Support (IS) contacts for the March 2013 quarterly processing exercise are listed below:

NSW:Steven Weston

VIC:Greg Heitsch

QLD:Stephen Hamill

SA:Maria Nasilowski

WA:Michelle Pauly / Margarete Mumme

TAS:Daimeon Horne

Feedback from Staff

Any concerns regarding letters produced as part of this run should be directed to the Advices Help Desk – ACT mailbox.  Please report any problems without delay and state the nature of the query together with any relevant information.  Every effort will be made to develop solutions to address any concerns raised.

Cards & Advices Team Contact Details

Any queries regarding this mailout should be directed to the Advices Help Desk – ACT mailbox.

Letter Content

Prior to the issue of this Departmental Instruction, comments were sought from staff regarding the advice content and paragraph sequencing.  No feedback was received.

Advice Samples

Details of the proposed content of the letters are included in Attachment A.

• Example 1A: SP Increase, with CES, with MIs/SHs in assessment.
• Example 1B: AP Increase, with CES, without MIs/SHs in assessment.
• Example 2A: CES advice for DP only or WWP only.
• Example 2B: CES advice for MRCA WDP or MRCA SRDP.

Attachment B contains a sample of the GROOVER advice.

Letter Variables

Please note, in the enclosed examples:

• Letterhead, DC name and signature block will change according to State.
• The words “service pension”, “age pension” and “income support supplement” each represent variables which will appear for those clients in receipt of the applicable pension.
• The introductory paragraphs will advise clients of the outcome of their re-assessment, being either 'increased', 'reduced' or 'reduced to nil'. Variables such as 'increased', 'reduced', 'granted', 'commenced' or 'cancelled' may be used when referring to Income Support allowance outcomes.

FINANCIAL ASSETS

VALUE

DEEMED INTEREST RATE

DEEMED INCOME PER FORTNIGHT

$xx,xxx.xx

2.5%

$xx.xx

$xx,xxx.xx

4%

$xx.xx

$xx,xxx.xx

$xxx.xx

Description

No. of Shares

Asset Amount

XXXXXX

X,XXX

$XX,XXX.XX

XXXXXX

X,XXX

$XX,XXX.XX

XXXXXX

X,XXX

$XX,XXX.XX

Description

Units

Asset Amount

CCCCCCCCCCCCC

XXX

$XXX.XX

CCCCCCCCCCCCC

XXX

$XXX.XX

CCCCCCCCCCCCC

XXX

$XXX.XX

FINANCIAL ASSETS

VALUE

DEEMED INTEREST RATE

DEEMED INCOME PER FORTNIGHT

$xx,xxx.xx

2.5%

$xx.xx

$xx,xxx.xx

4%

$xx.xx

$xx,xxx.xx

$xxx.xx

Description

Foreign Income per fortnight

Exchange Rate

Assessed Income per fortnight

Euro

xxx.xxx

x.xxxx

$xxx.xx

Turkish Lira

xxx.xxx

x.xxxx

$xxx.xx