Amends DI No.

C08/2005

Manual File No

06/2579

Replaces DI No.

C15/2007 & C29/2000

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 & disability pensions for those in receipt of all income paid in Pounds Sterling:

• war disablement pensions (British DP, including 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 = A$2.3175 to one Pound Sterling equals A$2.3889 (ie $A1 = £0.4186).

This rate reflects the average of the “on demand airmail buying rate” for the two weeks to 24 August 2007.

Date of Effect

28 August 2007

Effective from 28 August 2007 the current exchange rate will change.  On pension payday 13 September 2007 pensioners 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 Monday 27 August 2007.

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 pension 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 CMS/PIPS cases will be created automatically for action.  Any cases processed through PIPS should be reassessed with effect from 28 August 2007 for payday 13 September 2007.

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 pensioners who are in receipt of ISS, age pension (AP) or service pension with rent assistance (SPRA); and, who also receive disability (war) pension direct from Britain should have that disability pension converted to $A using this exchange rate.  ISS, AP and SPRA should be recalculated by doing a PIPS assessment.  These cases can be extracted through 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 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 doing 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 C22/2005 issued by Veterans' Compensation.

Amendments to Advices

The Payment Information Attachment has been re-instated for all automatic advices produced following the British Pension and Comsuper & DFRDB processing.  Feedback had been received from pensioners advising that the presentation of their payment information in the sentence format was confusing and difficult to understand.  The return of the Payment Information Attachment will now make it easier for pensioners to see their fortnightly payment information and assist in reducing client confusion.

The advice letter will contain a paragraph within the body of the advice advising clients as follows:

Payment Information

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

The Payment Information Attachment will be generated as an attachment providing clients with their fortnightly payment information.

Printing & Lodgement of  Letters

SALMAT will print, envelope and lodge the advice letters with Australia Post by 6 September 2007.

An advice letter will only be produced for cases where there is a variation in payment.  The letters will be two pages and include the new exchange rate, amount of income and 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.  Age pensioners will receive separate advices.

Tasmanian Overseas Clients

Tasmanian clients who have an overseas postal address will have the full overseas address printed on their advice letters.  The advice letters will be printed, enveloped and sent from the mailing house.

Streamed  Advices

The following will be streamed for printing by IBM GSA and sent by courier to each location:

• overseas cases for all locations apart from Tasmania;
• group destination cases;
• treatment changes and clients affected by period of grace provisions; and
• any advice letter with a payment information attachment (reduction to nil cases and future actions resulting in variations over several paydays).

Contact officer

The contact officer for this exercise is Sarah Paras:   x16534.

From

To

$ in £

£ in $

28 August 2007

0.4186

2.3889

3 July 2007

27 August 2007

0.4315

2.3175

27 March 07

2 July 2007

0.4164

2.4015

10 October 06

26 March 07

0.4047

2.4710

11 April 06

9 October 06

0.4170

2.3981

30 August 05

10 April 06

0.4277

2.3381

2 August 05

29 August 05

0.4398

2.2738

21 June 05

1 August 05

0.4263

2.3458

1 February 05

20 June 05

0.4126

2.4237

4 January 05

31 January 05

0.4004

2.4975

23 November 04

3 January 05

0.4202

2.3798

12 October 04

22 November 04

0.4065

2.4600

20 July 04

11 October 04

0.3938

2.5394

6 July 04

19 July 04

0.3828

2.6123

25 May 04

5 July 04

0.3961

2.5246

2 March 04

24 May 04

0.4200

2.3810

25 November 03

1 March 04

0.4308

2.3213

2 September 03

24 November 03

0.4168

2.3992

27 May 03

1 September 03

0.4064

2.4606

29 April 03

26 May 03

0.3929

2.5452

04 March 03

28 April 03

0.3816

2.6205

03 September 02

03 March 03

0.3620

2.7624