DEFENCE COMPENSATION INSTRUCTION - NO 25.
Military Compensation Scheme - Safety Rehabilitation and Compensation Act 1988
Incapacity Sampling Exercise, Including Cases With Superannuation Benefits And Recovery Of Over Payments
1.The purpose of this Instruction is to provide guidance to MCRS staff on the further conduct of the incapacity sampling exercise, including cases with superannuation benefits and the recovery of over payments.
Background
2.DCI No 24 provided guidance on the implementation of the Single Period Calculator (SPC) and its use for the initial conduct of a national sampling of ongoing incapacity cases. The purpose of the sampling was to help reduce the impact of the migration of existing cases to Military Compensation & Payments Version 1 (MCPV1), when any incorrect rates of payment would become apparent, and to help guide the MCRS strategy for dealing with the potentially large number of overpayments arising from the sampling or the migration process.
3.The sampling to date of around 45% of all ongoing cases indicates an error rate of 22% nationally. That is, nearly one in four current cases are shown to have a variation in the rate of weekly payment when compared to the rate derived from the SPC. An extrapolation of the results indicates a potential for up to 300 variations with over 100 overpayments when all cases have been sampled nationally.
4.It is seen as prudent to deal with these issues prior to the migration to MCPV1. This will reduce the disruption which would otherwise arise were the calculation of arrears, communication with clients and recovery actions on 300 odd cases be undertaken at the one time, when MCRS will be dealing with a continuum of other migration activities.
Future Conduct Of The Sampling Exercise
Action to be undertaken
5.MCRS Offices should ensure the following actions are undertaken:
a)The SPC should continue to be used to sample all remaining ongoing cases (except Reserves and over 65's) by the end of November 1997. A summary sheet of cases sampled in each office is to be forwarded by e-mail to Craig Boyd at the end of September, October and November. An example of the summary sheet is provided as Annex A.
b)Clients found to have been under or over paid are to be commenced at the correct rate at the earliest opportunity.
c)Arrears for under and over payments are to be calculated as and when found.
d)Arrears for under payments should be paid at the earliest opportunity.
e)Action to recover arrears for any over payment is to be undertaken in the normal way.
f)Further sampling or calculating of arrears for superannuation cases should be delayed until the receipt of superannuation data from Comsuper, as explained below.
6.Given the proportion of cases held by Brisbane and Sydney, assistance can be provided to those sites in completing this exercise.
7.The SPC should continue to be used to calculate all “new starters”.
Recovery Of Overpayments
8.While the sampling will reveal a significant number of over payments, the recovery of which would result in hardship to some clients, there is no compelling case why these clients should be treated differently to clients over paid in other times or in other circumstances. Accordingly, normal recovery of over payment methods are to be employed by MCRS Offices on a case by case basis.
Superannuation Benefits
9.To date sampling has been undertaken with the acceptance that superannuation amounts indicated on the clients file are correct. This course was taken since it was decided that the time required to obtain the full superannuation details of all clients should not be allowed to delay the implementation of the SPC and the initial sampling exercise. There remains, however, the possibility that unadvised reclassifications, incorrectly applied initial pension amounts and subsequent increases will have led to incorrect weekly rates being paid to some clients.
10.DMCR has decided therefore that the full superannuation details, including the current fortnightly pension amount, will be obtained directly from Comsuper for all ongoing clients currently being paid under Sections 20, 21, 21A, 131 and 132A(2).
Action to be undertaken
11.MCRS Offices should ensure the following actions are undertaken:
a)A list of all ongoing clients being paid under the superannuation sections is to be forwarded to Craig Boyd by 30 Aug 97 via e-mail. The list is to include the details shown at Annex B.
b)To avoid the necessity to revisit cases MCRS Offices should not sample further superannuation cases until such time as DMCR forwards Comsuper's response to the questions asked in Annex C. The calculation of arrears from any under or overpayments to superannuation cases already identified should also be suspended until then.
c)Once MCRS offices have received the Comsuper details a comparison should be made between those details and details used in current calculations. Differences of less than $1 per week can be considered to be rounding errors and although the client should be commenced at the correct rate it is not necessary to recalculate arrears. All other variations should be calculated in full as per the non superannuation cases.
12.MCRS staff should not make direct contact with COMSUPER on this matter.
13.Defcare intends to release another version of the SPC in late September. This release is expected to include an as yet untested history mechanism which will provide the ability to move forward and back through an interview and see data as it was previously entered. It also includes the ability to save an investigation and re-open it, and to view a history window listing all screens visited, with the ability to return to any screen. This will provide a significantly greater level of functionality for calculating extended periods of arrears.
14.MCRS offices may, depending on the total number of cases to be sampled and the extend of arrears on individual cases, choose to delay sampling and back calculating some cases until the next version of the SPC is released.
15.Any questions regarding this DCI should be directed to Mr Craig Boyd by email or phone on (06) 266 8358.
(signed)
C. Neumann
ASSCS
22 Aug 1997
Enclosures
A.SPC Sampling Summary Sheet
B.Proforma for listing clients paid under superannuation provisions
C.Example of letter to be sent by National Office to Comsuper
Annex A - Single Period Calculator - Sampling Summary Sheet
MCRS OFFICE ________________
MONTH _______________________
Annex B
MCRS Office __________________
Annex C
DEPARTMENT OF DEFENCE
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Telephone: |
(06) 288 8358 |
Military Compensation and |
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Facsimile: |
(06) 266 8624 |
Rehabilitation Service |
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NCC-B7 |
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File Reference: |
DM95.17357 |
Department of Defence |
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CANBERRA ACT 2600 |
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(DATE) |
Mr Trevor Dockett
Military Member Services
Comsuper
PO Box 22
BELCONNEN ACT 2616
Dear Trevor
SAFETY, REHABILITATION & COMPENSATION ACT 1988 (SRCA)
I refer to the meeting between Defence and Comsuper staff on 22 July 1997.
Defence has developed and is preparing for the introduction of a new software application for calculating weekly payments under the SRC Act 1988. The new system applies a consistent application of the Act's business rules including those dealing with the treatment of superannuation benefits.
As part of the process of preparing for the introduction of the system Defence is conducting an audit of all ongoing payees to ensure that all clients are receiving entitlements consistent with the Act. There are a variety of reasons why some clients may not be in receipt of the correct entitlement including Defence not being advised by the client of a reclassification of benefit, incorrect portions of initial pension amount being considered, the incorrect pro rata application of CPI in the first year and subsequent CPI increases.
To assist in the audit we are conducting Defence would appreciate your response to the questions on the following page concerning the superannuation benefits paid or payable to the clients listed in the enclosures.
If there is anything you would like to discuss, please phone me on (06) 266 8358.
Craig Boyd
Enclosure
1.Questionnaire
2.List of clients
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QUESTIONNAIRE |
COMSUPER
QUESTIONS
a.Are benefits paid under DFRDB or MSBS (If yes, specify which)?
b.What class of benefit is paid?
c.From what date was the pension granted and what was the initial rate of the pension?
d.What was the date of effect of any subsequent benefit amount of any subsequent variations? Please include all variations (including reclassification's) to benefits paid up to the current period.
e.Has a lump sum benefit been paid? If so what amount was paid and on what date?
f.Has a productivity benefit been paid or is one due to be paid? If so what amount and on what date?