C20/2013 November 2013 Deeming Rate Change Letter Production and Mailout

Replaces DI No.

N/A

Purpose of Instruction

This Departmental Instruction is to provide you with information about the processing arrangements for the November 2013 Deeming Rate Change advice letter production and mailout.

Introduction

In recognition of the recent interest rate reductions the deeming rate for pension assessment purposes is to be reduced by 0.5%.

As a result, there will be a change to the deeming interest rates

• from 2.5% to 2% for amounts up to and including $46,600 ($77,400 per couple); and
• from 4% to 3.5% for amounts over $46,600 ($77,400 per couple).

The deeming rate change will be processed on the weekend of Saturday 2 November to Sunday 3 November 2013.

Any SP/ISS/AP variations resulting from this exercise will be effective from 4 November 2013 for payday 14 November 2013.

Payments on 14 November 2013 will comprise 6 days at the old rate and 8 days at the new rate.  The full 14-day increase will be made on payday 28 November 2013.

About 45,000 advice letters are expected to be produced for clients whose pension has varied due to a change in deemed income.

Clients will not receive an advice if their pensions continue at the same rates.

This Departmental Instruction provides information about the advice letter production, mailout process and significant issues relating to the mailout.

Advice Letter Target Audience

A letter will be produced for the following clients after the November 2013 Deeming Rate Change processing:

• Letters will be sent to approximately 45,000 income support recipients whose rate of payment is varied as a result of the change in deeming income.
• No advice will be produced for pension continuation cases.
• If a treatment change occurs as a result of the reassessment, a letter will be produced.

$ Minimum Rules

• The $ Minimum rules do not apply in this processing run. 
• All pensioners will be reassessed in the deeming rate change processing run, and the actual pension rates will be applied.

No Deeming Rate Change for Bereavement Period cases

Pensioners currently in a bereavement period will not have the Deeming Rate Change applied to their financial assets in this processing run.

A full data refresh should be done as part of their post-bereavement review.

Introductory Paragraphs

All letters w — i — ll have either a single outcome paragraph or a multiple outcome paragraph made up of dot points to advise the pension outcome.  Examples are:

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

4 November 2013.

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 4 November 2013.

Special Paragraph

Clients whose payments are varied as a result of the Deeming Rate change will receive a paragraph outlining the change:

Deemed Interest Rate Change – Financial Assets

With effect from 4 November 2013, the deemed interest rates will change.  The new deemed income rates of 2% for amounts up to $46,600 ($77,400 per couple) and 3.5% for amounts over $46,600 ($77,400 per couple), will be used to work out the amount of income calculated from your financial assets.

This has resulted in a change to the income amounts used to work out your rate of service pension/age pension/income support supplement.

Income & Assets

Clients' full income and assets will not be provided in the advices. However, a table showing the total financial assets, deemed interest rates and deemed income will be provided.

What is deemed Income?

An explanatory paragraph about deemed income will also be present in all advice letters.

Obligations

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

A 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 included in all letters.

Deeming Rate Change Processing

November 2013 Deeming Rate Change processing will commence on Friday evening 1 November 2013 and will run through until Sunday 3 November 2013.

Processing within DVA (includes 'advices' processing)

Friday evening 1 Nov 2013 – Sunday 3 Nov 2013

Transmission of Production Data to Mailing House

Monday 4 November 2013

Mailing House to commence lodgement of Advice Letters with Australia Post

Friday 8 November 2013

Mailing House to complete lodgment of all  Advice Letters by COB

Monday 11 November 2013

Estimated number of advices

The number of letters to be sent nationally is approximately 45,000.

Printing of Letters

Computershare located in Ermington NSW will print, fold, insert and lodge the advice letters.

National Lodgement of Letters

Letters will be lodged with Australia Post in roughly equal volumes over the two days Friday 8 November 2013 and Monday 11 November 2013.

A representative from the Cards and Advices Team will notify and confirm all lodgment details.

The Income Support contact officers for this exercise will be given progress reports and advised of any changes to this timetable.

Holding of daily advice letters

Daily advice letters produced from Monday 4 November 2013 should be held pending notification that the November 2013 Deeming Rate Change letters have been dispatched.  This will ensure that pensioners receive their advice letters in chronological order.

DFISA Advices from Centrelink Processing

DVA will be suppressing all Centrelink daily DFISA variation advices with an effective date of 4 November 2013, which are transmitted to DVA following the Centrelink processing run.  All other advices will print as part of the normal processing, including Centrelink DFISA cancellation and grant advices.

Blind Clients will not receive an advice

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 when a Blind client on income support is also in payment of rent assistance (RA).  The RA is subject to the income and assets tests, and as such the deeming rate change 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.

Single & Joint Addressed Letters

All service pension and income support supplement recipient couples will receive a joint advice, provided the pensioner addresses are identical.  This includes illness separated couples.  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 same postal address recorded, a joint advice will be produced.

Important to note: Staff are reminded when granting Age Pension or for those clients in a joint assessment who 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 batch 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, providing the advice default request has been set in CO.CO.

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 accuracy, and reconciled against the reports received in each location to ensure they reflect the correct treatment paragraphs before they are mailed to the clients.

Tasmanian Clients with Overseas Postal Address

Advice letters for Tasmanian Office clients with an overseas postal address will be printed and posted from the Mailing House.

Streamed Advices

Several categories of advices are streamed out to print at location printers, 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 — VSSOPR06

TAS — VTSOPR03

WA — VWSOPR01

VIC — VVSOPR02

NSW — N607P

QLD — VQSOPR01

These advices, in particular treatment eligibility change advices, should be checked for accuracy, 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.

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.

Income Support  Contact Officers

A contact person from each location 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 November 2013 Deeming Rate Change advices mailout to staff.

The Income Support (IS) contacts for the November 2013 Deeming Rate Change processing exercise are listed below:

NSW:Genia Sacharczuk / Steven Weston

VIC:Greg Heitsch

QLD:Sharon Golden / Stephen Hamill

SA:Maria Nasilowski

WA:Michelle Pauly / Margarete Mumme

TAS:Daimeon Horne

Cards & Advices Team Contact Details

Any queries regarding this mailout should be referred to:

Ganes Jagadeeswaran

(02) 9213 7310 or speed dial 27310

ganes.jagadeeswaran@dva.gov.au

Advice Samples

Details of the proposed content of the November 2013 Deeming Rate Change letters are included in Attachment A.

• Example 1A: SP Increase, with deemed financial assets.
• Example 2A: Age Pension Increase, DFISA varied, with deemed financial assets.

Letter Variables

Please note, in the enclosed examples:

• Mail Return Address, Facsimile Number, 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.