Purpose of Instruction

The purpose of this Departmental Instruction is to provide information about the Pounds Sterling exchange rate variation exercise.

Introduction

Following the recent variation in UK – Australian exchange rates, DVA will apply a new exchange rate for the assessment of the rate of income support payments and disability pensions for those in receipt of all income paid in Pounds Sterling:

·         war disablement pensions (British Disability Pension (DP), including Empire Air Training Scheme (EATS) and Composite

·         social security pensions

·         official public service pensions

·         armed forces superannuation pensions

·         British other income (all other British income)

New Exchange Rate

The exchange rate used to convert Pounds Sterling to Australian Dollars for income support assessment purposes has changed:

  -  from one Pound Sterling equals A$1.6697

  -  to one Pound Sterling equals A$1.7173 (i.e. A$1 = £0.5823)

This rate reflects the average of the “on demand airmail buying rate” for the two weeks to 4 October 2019.

Date of Effect and Payday

Effective from 8 October 2019 the current exchange rate will change.  On pension payday 24 October 2019 recipients with relevant British income will receive a full instalment at the new assessed rate.

Automatic Processing

Processing to implement the new exchange rate is scheduled for the evening of Tuesday, 8 October 2019.

Amounts recorded as foreign super type non-government British other income (07), British Social Security Pension (08) or British Official Public Service/Forces Pension (09) will be varied by applying the exchange rate to the Pounds Sterling amount recorded, to determine the new rate of payment in Australian dollars. The income support payment will then be reassessed automatically.

Manual Cases

Cases with actions in submission or determined status will not be processed automatically and will be frozen. These cases will be listed on the manual listing for follow up action, and Claims Management System (CMS)/Pension Information Processing System (PIPS) cases will be created automatically for action.  Any cases processed through PIPS should be reassessed with effect from 8 October 2019 for payday 24 October 2019.

Non-Government British Other Income (07)

Previously non-government British other income (07) was refreshed every six months in March and September with other foreign currencies (GROOVER).  As a result of a review of British pensions approved by the Repatriation Commission all sterling payments, including British other income (07) are adjusted in uniform exchange rate variations.

British DP Cases

Income Support recipients who are in receipt of Income Support Supplement (ISS), age pension (AP), service pension with rent assistance (SPRA), or veteran payment with rent assistance (VPRA); and, who also receive disability (war) pension direct from Britain should have that disability pension converted to Australian dollars using this exchange rate.  ISS, AP, SPRA and VPRA should be recalculated by doing a PIPS assessment.  These cases can be extracted through Adhoc Information System (AIS) by each location.

Note: If DP has already been assessed as income in determining hardship cases it should not also be assessed as income for Rent Assistance (RA).

EATS and Composite Cases

EATS and Composite cases are subject to the daily exchange rate variation of plus or minus 2.5%.

These cases can be extracted through AIS by each location and recalculated by processing a PIPS assessment.  Attachment A shows the amount per fortnight in Australian dollars to be applied for the varying United Kingdom amounts.

For further details refer to Departmental Instruction DI 22/2005 issued by Veterans’ Compensation.

Printing & Lodgement of Letters

Letters will be printed and lodged with Australia Post by our contracted mail house.  All letters will be posted by Wednesday, 16 October 2019.

An advice letter will only be produced for cases where there is a variation in payment.  The letters will be four pages and include the new exchange rate, the amount of income and the new ongoing pension amount.  Joint letters will be produced where both members of a couple are in receipt of pension from the British government and their pension varies.  Partnered age pensioners will receive separate advices.

Estimated Advice Numbers

The estimated number of advices to be produced is 2,500 based on the previous British Retirement Income (BRI) advices mailout.

Overseas Clients

Advices for all clients with an overseas postal address will be printed, enveloped and sent from the mail house.

Streamed Advices

The advices of the following types of cases will be streamed for printing to local printers at each state location:

·         reduction to nil cases

·         treatment changes as a result of the reassessment

The nominated local printers are:

NSW           VNSOPR13

QLD/VIC     VBRIPR15

SA/WA        VSSOPR02

TAS            VTSOPR03

Contact officer

The contact officer for this exercise is Ganes Jagadeeswaran (ext. 412310).