1

INTRODUCTION OF THE INCOME SUPPORT SUPPLEMENT (ISS) PAYABLE TO WAR WIDOWS AND WIDOWERS

Introduction

The purpose of this Departmental Instruction is to provide policy and procedural guidelines relating to the new Income Support Supplement payable to war widows and widowers from 30 March 1995.

Background

2.As part of the May 1994 Budget, the Government announced the introduction of a new Veterans' Affairs income support payment, the Income Support Supplement (ISS).

3.The ISS replaces the ceiling rate income support age, carer, wife and disability support pensions, currently paid to war widow(er)s by Social Security.

4.War widow(er)s who are veterans with qualifying service, will continue to be eligible for the ceiling rate of service pension (section 45 refers).  As part of this exercise, the assessment of service pension for this group will be automated.

Effective Dates

5.The commencement date of the new legislation introduced in respect of the ISS is 20 March 1995.

6.ISS will be payable from 30 March 1995, being the first Veterans' Affairs payday after the effective date.

7.War widows who are transferring from Social Security on the 30 March 1995 will receive their last Social Security pension payment on 23 March 1995.

Target Population

8.Of 60,875 war widow(er)s who were receiving a Social Security pension in March 1995, 54,385 were transferred to the ISS in a bulk automatic exercise.

9.It is anticipated that a further 4000 will transfer across manually.

10.All future war widows who satisfy the eligibility criteria, will receive ISS.  It is expected that approximately 790

new grants of ISS will occur quarterly.  This represents 69% of total war widow(er) pension grants.

Purpose

11.The Income Support Branch within DVA aims to allow veterans and their dependants to enjoy a standard of living that is at least equal to that provided by other Government programs.

12.Many in the ex-service community expressed concern for the welfare of surviving widows and widowers.  Before ISS, the majority of war widow(er)s were forced to seek income support from DSS when they are already suffering grief at a time of bereavement.

13.The introduction of the ISS is also consistent with the Baume Committee recommendations

to have all war widow(er) payments made by DVA.

Benefits

14.The introduction of the ISS will ensure that all war widow(er)s may remain with DVA and receive income support if they satisfy the eligibility criteria and the income and assets tests.  This will mean that no unnecessary upheaval is imposed upon them at the time of their partner's death.

15.As the ISS is replacing income support payments made by DSS, war widow(er)s will no longer have to deal with two Departments (DSS and DVA) when handling their pension matters.

16.With the introduction of the ISS, war widow(er)s with a dependent child or student who do not satisfy age, carer, wife or disability support eligibility criteria, will become eligible for income support for the first time.

Related Initiative

17.A related 1994/95 Budget initiative is the extension of the standard (single) rate service pension to widowed and non illness separated partners of veteran service pensioners.  Prior to the introduction of new legislation commencing on 20 March 1995, widowed and separated partners were only entitled to their portion of the married rate of service pension.  This initiative is the subject of a separate departmental instruction (DI B29/95 of 7 April 1995).

Legislation

18.Major changes to the Veterans' Entitlements Act 1986 have occurred as a result of the introduction of the ISS.  There are now 3 parts relating specifically to income support payments:

• Part III, sections 36 to 45 cover service pension eligibility and entitlement matters;

• Part IIIA, sections 45A to 45ZJ cover ISS eligibility and entitlement matters; and

• Part IIIB, sections 46 to 59L refers to matters generic to both service pension and the ISS, such as income and assets, PLS, Hardship etc.  It should be noted that a new definition has been added to ss5Q(1) to define "pension" as including ISS

  [3]

  Refer to section 43 of the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994.

  [3] (go back)
  .

19.On 30 June 1994, the Governor General gave Royal Assent to the Veterans' Affairs (Budget 1994-95 Measures) Legislation Amendment Act 1994.  This Act introduced the major legislative changes necessary to implement the ISS.

20.Clause 2(5) of that Act provided a commencement date of 20 March 1995.  Due to the tight time frame for introduction of the initial Act, further changes were deferred and introduced in the Veterans' Affairs (Budget 1994-95 Measures) Legislation Amendment Act (No. 2) 1994 that received Royal Assent on

16 December 1994.

21.The legislative changes introduced in the first Act are included in the September 1994 unofficial reprint of the VEA.  The changes are located in the notes at the end of the old Part III pages 699 to 737.

22.The second Act introduced further amendments such as compensatory recovery definitions (s5N), restrictions on dual pensions under sections 39C and 45D, eligibility for Carer ISS, order of reduction for income tax purposes under s45V etc.

23.It is important to note that some of the legislative amendments introduced in the second Act have altered the legislative reference points.  Until such time as the VEA has been updated to incorporate the additional changes, it is important that the second Act is referred to when making references to the ISS legislation.  Attachment A provides a summary of the No.2 Act Schedules that amend the legislative reference points.

Eligibility Criteria

24.ISS is payable to Australian war widow(er)s who satisfy the income and assets tests.  A war widow(er) must also be an Australian resident and in Australia at the time of application

.  (S)he must also:

• be of ISS qualifying age (ie.55 years

  [5]

  Subject to Age Equalisation initiative

  [5] (go back)
  for females and 60 years for males);  or

• meet the definition of permanently incapacitated under ss45A(3) of the VEA;  or

• be a Carer of a severely handicapped service pensioner, DSS pensioner or ISS recipient;  or

• have a dependent child or student;  or

• be remarried to (or living in a marriage-like relationship with) a DVA or DSS income support pensioner.

25.A war widow(er) cannot receive a service or a Social Security pension and ISS at the same time (s45D VEA refers).

Loss of Eligibility for ISS

26.Subject to the income and assets tests ISS will generally be payable to an ISS recipient who meets the above eligibility criteria at the time that a claim is made.

27.Once granted, basic ISS eligibility cannot be lost unless fraud has occurred.  The only exception to this rule relates to Carer ISS.

28.If ISS is granted on the grounds that a war widow(er) is a carer of a severely handicapped pensioner, and then consequently ceases to care for that severely handicapped pensioner, ISS eligibility will be lost.

29.Where a war widow(er) was granted ISS on the grounds of having dependent child or student, ISS eligibility will not be lost once the child or student ceases to be dependent on the war widow(er).

30.If a war widow(er) who was granted ISS on the grounds of invalidity regains their health (or reaches ISS pension age), the associated tax exempt status will be lost.   However, ISS eligibility will not be lost.

31.Although generally ISS eligibility cannot be lost, payability can be lost if income and assets are in excess of the allowable limits.

32.Should loss of payability occur, ISS can be restored once income and assets reduce below the allowable limits.

Income and Assets Limits

33.ISS is subject to income and assets tests.  The assets test is the same as for other income support pensioners.  The income test for ISS differs from the service pension income tests.  A new definition under s5H, 'adjusted income' relating

specifically to the ISS was introduced.  Adjusted income includes war widow(er) pension (WWP) and any disability pension received as income.

34.Like other income support pensions, the rate of ISS is subject to the CPI.  As at 30 March 1995, ISS is payable if income and assets are below the following levels.

Income Test (per fortnight)

Married$1,244.00

Single$   742.20

Assets Test

Homeowner — Non Homeowner

Married $345,000.00$427,000.00

Single$223,750.00$305,750.00

35.It should be noted that the income and assets levels at which ISS ceases to be payable are lower than for other income support pensioners.  This is because Pharmaceutical Allowance is paid in respect of WWP rather than ISS eligibility.

Definition of a war widow(er)

36.The definition of a war widow or widower is detailed in s5E of the VEA.  To qualify for ISS a person must be an Australian war widow(er) who receives a compensatory pension, paid under Part II or IV of the VEA, in respect of the death of an Australian veteran or mariner, where death was due to illness or incapacity resulting from war or defence service, or service as a member of a Peacekeeping force.

37.This definition includes Australian war widow(er)s who have been granted a war widow(er) pension under the VEA whose war widow(er) pension rate is limited as a result of dual compensation.

38.Although a war widow/er is defined in s5E of the VEA as including persons who receive pensions under the law of a foreign country, the ISS is not payable to widow(er)s in receipt of an overseas WWP (or lump sum equivalent), unless that person also has dual eligibility for an Australian WWP paid under Part II or IV of the VEA.

Residency/Portability

[6]

Please note the residency rules for ISS recipients are similar to those applying to other income support pensioners including service pensioners.

[6] (go back)

39.A war widow(er) must be an Australian resident and physically present in Australia on the date ISS is claimed.

40.The only exception to this rule applies to Australian war widow(er)s residing overseas, who were granted ISS as part of the bulk DSS transfer exercise (ss.45M(2) VEA refers).  The rationale for this exception is that this group had already satisfied the residency requirements for DSS pension.

41.The definition of an Australian resident can be found under s.5G of the VEA.  For the purposes of ISS, an Australian resident also includes a person who is resident in the external territories, including Norfolk Island, Christmas Island and Cocos (Keeling) Islands.

42.It is important to note that, under s58M of the VEA, where a client recently lived overseas and lodges a claim within 12 months of their return to Australia, ISS may be lost if they return overseas before they have been in Australia for 12 months.  The Repatriation Commission has the power to ignore this rule if the reason for the client returning overseas, before 12 months elapsed, could not have been reasonably foreseen.

43.Subject to paragraph 42 above, ISS is generally not affected by the fact that a person leaves Australia.  While the person is outside Australia, rent assistance, remote area allowance, pharmaceutical allowance and ISS Carer pension (if absence is for more than 42 days in a calendar year) are not payable nor should the ISS recipient be issued with a Pensioner Concession Card.

Department of Social Security Payments

44.From 20 March 1995, sections 47, 103, 151, 202 and 418 of the Social Security Act were amended to ensure that DSS income support pension will no longer be payable to war widow(er)s if they are eligible for an ISS.  The exception to this rule are those saved under ss45E(2) VEA.

45.Under s45E, savings provisions allow certain war widow(er)s to continue to receive their DSS payments indefinitely (until death) or until such time as they elect to receive ISS.  They are war widow(er)s who were in receipt of or were granted (but had not started to receive) DSS income support pension prior to 20 March 1995, and who elected not to transfer to the ISS.

46.It is important to note that from 20 March 1995, transfer back to DSS is only permitted in extenuating circumstances (ss.45E(3) VEA refers).  These circumstances may include:

• non receipt of advice concerning the transfer to ISS (issued on 11 November 1994); or

• inability to comprehend the advice due to ill health, etc.

ISS Action on Grant of War Widow(er) Pension

47.At the time of grant of WWP, a war widow(er) may be:

• receiving service pension (SP);

• receiving a Social Security pension;  or

• not receiving income support pension.

Service Pension in payment

48.In cases where SP is in payment immediately before grant of WWP, s45N of the VEA allows for automatic grant of ISS without lodgement of a formal application, subject to the income and assets tests.

49.It should be noted that automatic grant of ISS can only be made to war widows(ers) who:

• are aged 55* years (female) or 60 years (male); or

• are the partner of an income support pensioner; or

• have dependent children.

*This age will increase progressively in line with age equalisation.  The first change to the age limit is scheduled to occur on 1 July 1995, when the age for female ISS and female veteran service pensioners will be increased to 55 years and 6 months.

50.If the war widow(er) does not meet one of the above criteria, investigation will be necessary to establish whether the war widow(er) meets either the incapacitated or carer criteria.

Automatic Grant of ISS

51.No further ISS investigation is necessary

once a WWP grant has been determined and it is clear that the war widow(er):

i)  meets one of the criteria that will provide automatic ISS eligibility (see paragraph 49);  and

ii)  is receiving SP.

52.Subject to local arrangements, Compensation section should, in the same action:

• grant the WWP; and

• if the war widow(er) is receiving SP, cancel that pension; and

• grant ISS.

53.Examiners should ensure that the PP.PA screen details are changed to suppress SP payment and enter personal assessment details onto PP.PI (the personal assessment screen for ISS recipients).

54.The arrears screen should include details of grant of WWP and cancellation of SP from the same effective date, but please note that ISS can only be granted from

30 March 1995 at the earliest.  See Attachment B for examples of the calculation of arrears adjustments.

55.If the WWP and ISS grant and cancellation of SP are done as one action it will not be necessary to hold arrears to recover overpayment of SP.  The arrears of WWP and if necessary ISS, will be automatically used to recover retrospective cancellation of SP.

56.Please note, in some rare cases where maximum rent assistance was payable, the WWP arrears may not be sufficient to recover any overpayment of income support pension and allowances.  This should only occur in cases where the date grant of WWP is earlier than 30 March 1995 (but see also paragraph 81 below for cases where DSS pension was previously payable).

57.As part of the WWP grant action, an advice will be produced on CCPS.  These advices have been amended to include information regarding ISS.  An advice will also be produced on the Payment Advice System (PAS) advising of grant of ISS and cancellation of SP.

Income and Assets in Excess

58.It should be noted, in a small number of cases, ISS will not be payable due to income or assets in excess.  This is because WWP and any DP received, are regarded as income and the levels at which ISS cease are lower than other income support payments.  The lower pension cut out points that apply to ISS are because PA (paid in respect of WWP) is not included in the calculation.

59.The trial screen PP.TR will indicate whether income or assets are in excess.  If either are in excess it is advisable to back out of ISS grant, i.e. delete information on PP.PI.  This will ensure that any PAS advice produced will only mention cancellation of SP.  As the CCPS advice gives information about ISS, the war widow(er) will be aware of ISS availability and if (s)he believes that (s)he is entitled, can lodge a claim for ISS.

60.The ISS grant can be backdated (see ss45C(2) of the VEA) if:

• the claim is successful;  and

• was lodged within 3 months of notification;  and

• the war widow(er) had made an informal claim for ISS on a D2663 (see paragraphs 70-72).

The date of effect of the grant is the latter of:

• date of grant of WWP; or

• date of cancellation of SP; or

• 30 March 1995.

61.If ISS is payable, a transport concession card (TC1) is not required as the war widow(er) will continue to be entitled to a pensioner concession card (PCC).

Non-automatic Grant of ISS

62.In cases where service pension was in payment but it is not clear whether the war widow(er) satisfies the eligibility criteria, the case will require further investigation.  If the investigation indicates that the war widow(er) is eligible for ISS, a D529 (claim for ISS) should be issued.

63.So that there is no delay in grant of war widow(er) pension, Compensation section should grant the WWP and if SP is in payment, cancel that pension as per current procedures.

64.Arrears of WWP will continue to be used to recover retrospective cancellation of service pension.  As previously indicated (paragraph 56) there may be a shortfall where maximum rent assistance was payable.  Where this occurs a warning flag should be placed on the file so that the shortfall can be recovered from any arrears of ISS.

65.It should be noted that even where ISS is granted, there may still be a shortfall between the arrears payable and the amount of other pension/allowance overpayment to be recovered.  This may occur where the effective date for WWP is prior to 30 March 1995.  The SP and any SP related RA must be cancelled from date of grant of WWP but ISS can only be granted from 30 March 1995 at the earliest.  Existing overpayment recovery procedures will have to be applied if this situation arises.

66.Once the WWP grant action is completed an advice will be produced through CCPS.  This will contain ISS information.

67.Depending on State Office local procedures, some additional form of contact should be made with the war widow(er) regarding ISS.  This could be via phone, or by enclosing an ISS preliminary details form (D530) or a basic ISS claim form (D529).

68.If possible, it is desirable to issue the claim form (D529 and relevant modules) with the advice of grant of WWP, however this should not hold up the advice of grant of WWP.  It is important to advise the war widow(er) that the form should be completed and lodged as soon as possible.  Where an informal claim has already been lodged, the war widow(er) has 3 months to complete and return the formal claim for ISS in order to receive ISS from the earliest possible date.  The 3 months commences from the date that advice of grant of war widow pension was issued.

69.Please note that TC1s will no longer be issued to war widows(ers) who qualify for ISS.  War widows(ers) formerly receiving SP or a DSS pension should continue to hold their PCCs pending grant of ISS.

70.Once the ISS claim form is received, question 29 of the war widow(er) claim form (D2663) should be checked to see if an informal claim for ISS was made.  If a "Y" was entered on question 29, this will be regarded as an informal claim and allow ISS to be backdated to the latter of:

• date of grant of WWP;

• date widowed partner SP* commenced; or

• 30 March 1995.

*Please note, the rate of widowed and separated partner SP will be increased to the standard (single) rate from 30 March 1995.

71.If the claimant said “No” to question 29 of the D2663, ISS can only be granted from the pay day following receipt of their claim for ISS or 30 March 1995 whichever is the earlier.

72.Please note, in cases where a war widow(er) claimed WWP on an older version of the D2663 it should be assumed that they would have lodged an informal claim for ISS if given the opportunity.  This means that a claim lodged on an old D2663 form is automatically treated as an informal claim.

73.The newly amended D2663 has been available since December 1994.  The national average time taken to process non-automatic WWP claims is 102 days, therefore the majority of new grants that come through should be based on a newly amended D2663 claim form.

74.New Claims examiner should check that there is no overpayment of SP or allowances still to be recovered.

75.For all cases involving retrospective cancellation of SP and grant of ISS, examiners should generally base calculations of ISS on the income and assets currently held in the SP assessment to determine current rate of ISS payable.  The file and the system should also be examined for any changes to income and assets or other circumstances that have affected the rate of SP from date of retrospective grant of ISS,  including reassessments from PIRs, DIRs, DIAs and global reassessments such as MIs, Shares, BRIs etc.  Please note that WWP and any DP must be included as income in any retrospective grant of ISS.

DSS pension in payment

76.Similar arrangements to those that already exist should occur where DSS pension is in payment.  The fact that the war widow(er) receives a Social Security pension is indicative of ISS eligibility.  However, a formal claim for ISS (D530 plus other relevant modules) must be lodged in order to obtain up to date income and assets information.

77.Sections 47, 103, 151, 202 and 418 of the SSA were amended to exclude war widows(ers) who are entitled to receive ISS from receiving a Social Security pension.

78.The only exceptions to this rule are those war widows(ers) receiving both a DSS pension and WWP prior to 20 March 1995 who chose to stay with DSS.

79.Date of cancellation of DSS pension is the latter of:

• grant of war widow(er) pension;

• grant of standard rate DSS pension;

• 30 March 1995.

80.Where the effective date for grant of WWP is pre 30 March 1995, DSS pension should be retrospectively reassessed, based on the ceiling rate rules, from the appropriate date (see paragraph 79) to 29 March 1995.  Then from 30 March 1995 the DSS pension should be reduced to nil.

81.Arrears of WWP should be held to recover retrospective cancellation of DSS pension.  If the WWP arrears do not cover the total amount overpaid, arrears of ISS will also have to be utilised.

82.Similar action as mentioned earlier (see paragraphs 67-68) should occur regarding the issue of ISS application forms.

83.Once the application form is received, it is imperative that grant action is taken as quickly as possible, particularly in those cases where an allowance was previously paid in addition to the basic income support pension.

No Income Support Received

84.On receipt of a claim for WWP (D2663), Compensation officers should note whether the applicant has made an informal claim for ISS or not.  If they have claimed ISS, it may add to our client service to advise the applicant of the eligibility criteria and the income and asset cut off points for ISS.  If the applicant appears to satisfy the criteria and cut off points for ISS, they may be eligible for a Social Security pension in the meantime.

85.If an applicant does qualify for a Social Security pension in the interim they should be advised to notify Veterans' Affairs if that DSS claim is successful.

86.If it is unclear whether a DSS pension is in payment, the examiner should try to contact the war widow(er) or DSS to ascertain if a DSS pension is being paid.  Arrears of WWP may have to be held pending clearance procedures.

87.Where no income support pension was in payment before the WWP determination, WWP should be granted immediately and the case referred to the Income Support area to arrange client contact and dispatch of claim forms where appropriate.

88.Once the ISS claim is received, New Grant officers should check question 29 of D2663 (see paragraphs 70-71 above) for informal claim indicator.

89.The income and asset details provided on the claim form should be used to calculate the current rate of ISS.  In cases where a retrospective grant is required it may also be necessary to obtain income tax returns or other financial information to determine the rate of retrospective payments.

90.Please note, war widows(ers) who do not receive a service or Social Security pension and who reside overseas, should not be sent an ISS claim form (D529) as they do not meet the residential requirements.

Forms

91.A new claim package was created specifically for the ISS.  The list of forms in the package are set out at Attachment C.

Ceiling Rate

92.From 1 November 1986, a "ceiling" or limit was placed on the basic rate of income support pension payable to war widow(er)s. The ceiling rate is also referred to as the "frozen" rate.

93.The ceiling rate for most war widow(er)s is $120.10 a fortnight.  However, if the war widow(er) has been in receipt of income support continuously from prior to

1 November 1986, the rate of income support pension paid immediately prior to

1 November 1986 is the ceiling rate (point 45X-A4 of the VEA refers).

94.Subject to the income and assets tests, a war widow(er), receiving ISS may be paid at a rate lower than the ceiling rate.  The basic rate of ISS, however, can never exceed the ceiling rate.  In other words, the ceiling rate cannot be increased or reduced, but the rate of ISS can be reduced or increased (up to the ceiling rate), depending on the amount of income and assets.

95.Where rent assistance is payable, the total of the basic ISS and rent assistance cannot exceed the ceiling rate.

96.Remote area allowance and child related payments, including child related rent assistance are paid in addition to the basic ceiling rate.

Calculation of the Rate of ISS

Definitions

97."Actual" rate of ISS is the amount of ISS that is actually paid to the war widow(er).  It is the lower of the "provisional" (or "basic") rate and the ceiling rate.

98.“Basic” rate of ISS is the amount of ISS calculated based on the income and assets tests.  This is then compared to the ceiling rate.  The lower of the basic and ceiling rate is payable.

99.The "actual" rate of ISS payable is calculated in the same way that the ceiling rate SP is calculated.  The "actual" rate of ISS payable is the lower of the basic rate and the ceiling rate.

100.The rate of ISS payable will be calculated automatically on the system.  New rate calculators for ISS have been included in the VEA.

101.Please note that Pharmaceutical Allowance is excluded from the calculation as it is already paid in respect of WWP.

102.The "Ready Reckoner" charts at Attachment D provide a convenient way of determining how much ISS is payable to a war widow(er) based on marital status, income and assets, and whether the war widow(er) is a homeowner or non-homeowner.

103.As a general rule, the ISS calculation occurs as shown below:

Step 1.Basic Rate + Rent Assistance (non-child related).

Step 2.Apply the adjusted income and the assets tests.

Step 3.Compare the lower of the rates under the adjusted income and assets tests (basic) to the ceiling rate.

Step 4.Pay the lower of the basic and the ceiling rate.

Step 5.Add child related payments - (if Rent Assistance payable for children, omit Rent Assistance from 1st step).

Step 6.Apply maintenance income test, if applicable.

Step 7.Add Remote Area Allowance (if any).

Dual Compensation calculations

104.Where the war widow pension is reduced due to dual compensation paid under Part II or IV of the VEA only go as far as working out the person's ceiling rate and then add the following steps after Step 3.

105.This additional step is to apply a formula:

FPR-CRR

where:

FPR (full pension rate ie WWP+DA) is the amount per annum that would have been the annual rate of pension if it had not been reduced;  and

CRR (compensation reduced rate) is the annual rate of pension payable to the person after the pension has been reduced.

• Add the amount of the reduction (=FPR-CRR) to the person's ceiling rate.  The result is called the adjusted ceiling rate.

• Compare the adjusted ceiling rate to the adjusted income and assets rates and pay the lower rate.  This rate is known as the provisional rate.

106.Generally the assessment of ISS, including cases where the Australian WWP is limited by another pension paid on a periodical (e.g. fortnightly) basis under the dual compensation provisions, will be automatic.  Where Australian WWP is limited due to a lump sum, the case will have to be assessed manually and recorded on PP.MR.  At this stage only 2 cases of this nature have been identified nationally.

Assessment

107.Although the basic rate of ISS is fixed at the ceiling rate, generally $120.10 per fortnight, assessment may be calculated at the married or single rate depending on the person's domestic status.

108.If a war widow(er) is re-married (or living in a marriage-like relationship), ISS is calculated based on the combined income and assets of both partners.  The partnered ordinary income free area and assets value limit also apply.  It should be noted that if an ISS recipient is the partner of a veteran service pensioner, any WWP and DP is regarded as income for ISS purposes but not for service pension purposes.  This action can be done automatically.

109.It should be noted that manual assessment is necessary where an ISS recipient is married to a veteran receiving disability pension.

110.The manual assessment will be triggered by recording a "Y" indicator on the field "partner paid DVA/DP" on PP.PI.

111.For other examples of married assessments please refer to the system information at Attachment E.

112.The standard rate ordinary income free area and assets value limit will apply when calculating the basic rate of ISS for ISS recipients who are single.  Generally these cases will be automatically assessed.

Half Payment on transfer from DSS

113.Social Security and Veterans' Affairs pensions are paid on alternate Thursdays. To avoid dual payments to those transferring back to Veterans' Affairs, new half pay rules were introduced from 20 March 1995.  These rules affect both service pension (refer amendments to section 41 and 42 of the VEA) and ISS (new subsections 45X(3) and 45Y(3) of the VEA).

114.For the first ISS payday, where DSS pension was payable in the previous week, the basic rate of ISS and any non child related rent assistance will be paid at half the rate normally payable per fortnight.

115.All child related payments and remote area allowance transferred across should be paid in full from the first pay day.

116.To ensure that a half payment occurs automatically for the first pay day following transfer the case should be classified on the Claims Management System CM.CP screen as DSS Transfer In (process code 32).

Rent Assistance

117.The combined amount of non child related rent assistance (RA) and ISS cannot exceed the individual's ceiling.  However, the level of income and assets at which ISS ceases to be payable is higher than for non RA recipients.

118.As at 30 March 1995, these cut out points are:

Income Test (per fortnight)

Married$1376.40

Single$  882.60

Assets Test

Homeowner — Non Homeowner

Married $367,250.00$449,250.00

Single$247,250.00$329,250.00

119.Because WWP and any DP paid is already regarded as income, the RA special DP income test that applies to service pensioners does not apply to ISS recipients (however see Blinded assessments below).

Child-related payments

120.Child related payments including Basic Family Payments (BFP)

and Additional Family Payments (AFP) are payable to ISS recipients.  Please note however, that AFP and BFP can only be paid to one person except where shared care arrangements apply (refer DI, B04/94 of 3 February 1994).

121.AFPs may include include dependent child add on, guardian allowance, rent assistance and remote area allowance.

122.The rate calculators applying to ISS child related payments differ significantly from service pension rate calculators.

123.For ISS purposes, the income and assets tests are applied prior to the calculation of child related payments.  Once the basic rate of ISS has been determined, the child-related payments are calculated based on the maintenance income tests.

124.In other words, AFP is paid in addition to the basic rate of ISS payable.

125.Disability pension should not be taken into account when calculating the rate of RA payable to ISS recipients with dependent children.

126.AFP will not be affected by the half-pay arrangement for DSS transferees, now or in the future.

Single Orphan's pension

127.Single orphan's pension is payable to the dependent child of a deceased veteran.  Single orphan's pension will not affect the continuation of income support child related payments.  It should be noted however, if the dependent child is a student child any VCES education allowance is regarded as a prescribed payment.  A “Y” indicator must therefore be entered in the prescribed payment field on the dependent child's personal assessment screen (PP.PA).

Maintenance Income

[9]

For more detailed information, please refer to DI B30/94.

[9] (go back)

128.Since 1 January 1993, maintenance income, (regardless of whether it is paid in respect of children or not), no longer affects the basic rate of SP or DSS income support.  From 30 March 1995, this rule will also apply to the ISS.

129.Maintenance income affects ISS child-related payments however (Module H, points 45Y-H1 to H9 refers).

130.The following steps apply:

• Work out the person's annual rate of maintenance income.  Please note, maintenance income for a child who is not a dependent child of the person should be disregarded.

• Work out the person's rate of maintenance free area (point 45Y-H8 refers).

• If the person's maintenance income exceeds the maintenance income free area the person's maintenance income excess is nil.

• If the person's maintenance income exceeds the person's maintenance income free area, this amount is the person's maintenance income excess.

• Apply the following formula to this excess:

maintenance income excess

       2

• The result is deducted from the child related payments.  Please note, the amount to be deducted cannot exceed the total of the dependent child add-ons payable.

131.Special rules apply where special maintenance income in excess of the ceiling applicable to the person is payable (refer points 45Y-H5 to H7).

132.It is important to note that where a war widow(er) satisfies the basic eligibility for ISS but does not have payability because of income or assets in excess, child related payments are payable unless:

• the child or student ceases to be a dependent of the war widow(er); or

• payability is lost as a result of the maintenance income test.

133.Further legislative amendments are planned which will address this situation.

Remote Area Allowance (RAA)

134.RAA is a non-indexed allowance paid automatically to income support pensioners who live in specific, very remote areas.  The allowance is paid to help offset higher living costs.  These areas are listed in the Income Tax Assessment Act and in ss5Q(1) VEA.

135.RAA (if any) is paid in addition to the actual rate of ISS.  It is added after the income and assets tests have been applied.

136.RAA is an all or nothing payment.  In order to receive RAA, a war widow(er) must be receiving a minimum of $1.00 of basic ISS.

137.RAA is not subject to the half-pay rules but is paid in full from the first pay-day following transfer from Social Security.

Pharmaceutical Allowance and Telephone Allowance

138.These allowances are paid in respect of WWP not ISS.

Blinded Pensioners

139.The ceiling rate rules apply to blinded ISS recipients.  However, ISS paid to blinded pensioners is income and assets tests free.

140.Non-child related rent assistance (RA) is paid up to the ceiling rate, not in addition to it.  Like all RA, RA payable to blinded pensioners is non-taxable.  Similar to the basic ISS payment, RA payable to a blinded ISS recipients is not subject to the income or assets tests.

141.1995 Pensioner Concession Cards (PCC) for blinded pensioners will have "BLINDED" recorded on the card.  From 1996, PCCs will also have tactile grooves in the card for the benefit of blinded pensioners.

DSS Transfer Activity

142.As part of the ISS implementation, a bulk mailout exercise to all war widows and widowers (other than veterans and carers already receiving service pension), was conducted.  Two letters were issued:

• Letter A went to all war widows and widowers who were receiving an income support pension from DSS.  This group was invited to forego their DSS pension and transfer to Veterans' Affairs ISS; and

• Letter B went to all war widows and widowers who were not receiving any income support pension, unless they were residing overseas.  Overseas war widows and widowers who do not meet the residency requirements are not eligible for ISS and therefore no invitation to claim ISS was provided to this group.

143.Generally, where a war widow elected to transfer across to ISS from a DSS pension, this was done automatically.

144.Due to privacy restrictions however, the details provided were minimal.  Only the total income and assets held by Social Security was provided.  These totals were recorded on PP.OA under the income asset type DS with a literal as DSS transfer ISS.

145.A full list of the type of client data transferred across for ISS purposes is at Attachment F.

146.For legal and other reasons some cases could not be transferred across automatically.  These included:

• cases where either the DSS or WWP was paid to a trustee or agent (known as nominee or warrantee at DSS) and special register.

• cases involving children.

Order of Reduction for taxation purposes

147.Revised s45V of the VEA (see the 1994 No. 2 Act) outlines the order of reduction for income tax purposes.

148.The order of reduction does not include Pharmaceutical Allowance (PA), as it is paid in respect of WWP eligibility and not in respect of ISS or ceiling rate SP eligibility.

149.The order of reduction for ISS will be as follows:

(1)Basic ISS is to be reduced first; then

(2)Non-child related RA.

150.Please see point at paragraph 128 above regarding child related payments.

Remote area allowance is not included in the order of reduction as it is an all or nothing payment.  If ISS is not payable RAA is automatically cancelled.

Review activity

151.Cases where total income and asset amounts were transferred across from DSS as part of the bulk automatic exercise will require a full data collection if a review is initiated.  This includes pensioner initiated reviews (PIR).

152.As part of the review, the amount recorded on PP.OA as DSS transfer data must be deleted.  Unless this action is taken, it will not be possible to submit the case.

153.Once a case has been submitted, a warning flag will appear on PP.DE before the case is determined.

154.Unless the war widow is on the ceiling rate and is likely to continue on the ceiling rate, failure to do a full data collection will result in incorrect calculation of pension for this group.  It would also create confusing income and asset information in the advice generated resulting in the possibility of further PIR activity.

155.On 17 October 1994, it was agreed that Departmental review activity on ISS cases would be restricted as much as possible in the first 12 months.  Certain groups of ISS recipients must be reviewed immediately however.  These include:

• ISS recipients who have remarried.  This is necessary in case of death (for bereavement payment purposes);

• BRI recipients who do not meet the DSS ten year residency requirements;

• Those with direct deductions such as tax deductions;

• Hardship/PLS cases.

156.Schedules have been provided to the State ISS contact officers (see Attachment G) to co-ordinate this review activity.

157.Subject to pensioner initiated action, review of assets tested cases are to be deferred until 1996.  Review of other cases should be deferred for at least 6 months.

Overpayments

158.It should be noted that until such time as a full data collection has been undertaken on a case, overpayments of ISS should not be raised on cases that were automatically transferred across from Social Security using limited income and asset data.  Any overpayment raised can only be backdated to the payday following full reassessment of the case based on a full data collection.  The only exception to this rule is where the pension has been obtained through fraudulent

activity.

System Changes

159.Set out in Attachment E is the system information relating to ISS processing.  The on-line changes are relatively simple and include:

• additional case classification and attributes on the CMS including a classification type that calculates and generates a half pay paragraph from PAS on transfer from DSS;

• a new personal assessment screen, PP.PI for ISS recipients;

• a new field type DS with a literal of DSS Transfer ISS on PP.OA to store total income and assets transferred across as part of the bulk exercise;

• a new field for recording the ceiling rate on PA for female veterans and PI for

non veteran war widow(er)s;

• the ability to identify and assess WWP and DP as income for ISS purposes;

• changes to the general inquiry system to incorporate ISS information;

• changes to the payment advices system and CCPS advices;

• changes to the death processing system to allow the calculation of bereavement payments and advices taking into account ISS;

• PCC card entitlement;  and

• tax recording system changes.

160.In addition, service pension payable to war widows and widowers who are a veteran in their own right will be automated as part of this exercise.  This aspect is scheduled to occur as soon as possible following the major system changes associated with the ISS introduction.

Comparable Foreign Pensions (CFP)

161.If a war widow(er) is in receipt of ISS, he/she is required by law to take action to receive a CFP.  For further information please refer to the relevant Departmental Instruction

.

Compensation Initiative

[12]

For more detailed information, please refer to DI B05/95.

[12] (go back)

162.As part of the 1994/95 Budget, the Government announced a change to the treatment of compensation for ISS and SP purposes.  These changes were implemented on 1 January 1995 and will bring DVA in line with DSS.

163.Only clients under pension age are to be affected.  Pension age is defined in subsections 5Q(1) and 45A(2) of the VEA for SP and ISS, respectively.  The following ISS clients may be affected by the proposal:

War widow(er)s under ISS qualifying age, with ISS granted by DVA from 20 March 1995.  This includes ISS recipients who were previously receiving a compensation affected payment from DSS.

164.Recipients of a new grant of ISS will be affected if they:

• receive periodic payments of compensation;  or

• commence receiving periodic payments of compensation on or after 1 January 1995;  and/or

• have a lump sum payment of compensation settled after 1 January 1995.

It is important to note that the earliest possible date that compensation payments can affect ISS is 30 March 1995.

165.It should be noted that compensatory payments made by DVA, such as DP and WWP, are not affected by these changes.  They continue to be exempt under the income and assets tests.

166.There are two major changes to the way compensation has been treated since

1 January 1995:

• periodic payments of compensation will reduce ISS and SP by $1 for every $1 of compensation received; and

• receipt of a lump sum payment of compensation will result in a preclusion period during which pension is not to be paid.

167.It should be noted that:

• certain payments, such as child related payments (which include rent assistance and remote area allowance, where appropriate), will be exempt from the provisions;  and

• assessment of compensation under these provisions, is dependent upon when the person becomes entitled to the compensation and when the person became eligible for ISS.

168.For the purposes of this proposal, compensation is defined as money paid to a client, usually as a result of:

• work-related injury or illness;

• injuries received in a car accident;  or

• injuries received because of the negligence or fault of another person.

169.Compensation may be received in the form of periodic and/or lump sum payments.

Education Entry Payment (EdEP)

[13]

Please refer to DI B61/94 for further information on the Education Entry Payment

[13] (go back)

170.To ensure that EdEP has not already been paid by DSS for the same period, it will be necessary to liaise with DSS.

Income and Assets Tests

171.The ISS is income and assets tested.  The tests applicable are similar to the income and assets tests that apply to Social Security pensioners.  Section 5H of the VEA has been amended by the following insertion that defines 'adjusted income' in relation to a person claiming or entitled to income support supplement, as the sum of:

(a)the person's ordinary income (also defined in s.5H, see page 23 of the reprint of the VEA dated 20 September 1994);

(b)any instalment of DP payable to the person;

(c)any instalment of pension payable to the person under ss30(1), i.e. WWP;  and

(d)any instalment of pension that is payable to the person under the law of a foreign country and is, in the opinion of the Commission, similar in character to the pension referred to in paragraph (c).

172.For ISS purposes, points (b) to (d) above override the reference to WWP and DP as excluded amounts under the ss5H(8).  Other excluded amounts listed under ss5H(8) are exempt income for ISS purposes.

Superannuation Funds

173.Under paragraph 5H(8)(i) and ss52(1)(f), superannuation funds, deferred annuities and approved deposit funds are exempt until the person reaches pension age.

174.For ISS purposes, pension age is 55 years for females and 60 years for males.  Subsection 45A(2) provides the qualifying age for ISS recipients.  The use of the term qualifying age was used to differentiate between income support pensions and the income support supplement.  In the Veterans' Affairs Legislative Amendment Act

(No. 2) 1994, that received Royal Assent on 8 December 1994

, the definition of qualifying age for ISS recipients was aligned with the definition of pension age in the VEA.

175.Although the provisions dealing with superannuation fund exemptions refer to pension age rather than qualifying age, ISS recipients are covered by virtue of the changes made to the definition of qualifying age mentioned in paragraph 174.

176.Like DSS income support payments, WWP is considered as income under the ISS income test.  Any DP received is also considered to be income.

Adequate Means of Support

177.For ISS purposes, Adequate Means of Support (AMS) pension is exempt income under the income test.  AMS pension remains an excluded amount under paragraph 5H(8)(c) VEA.

178.Social Security regards AMS (other than child related AMS) paid to a war widow(er)s as income.  Three war widows were identified nationally who receive AMS in their own right.  If any of these three were transferred across at a rate below the ceiling rate, they will receive an increase in ISS.  One war widow is receiving AMS under the old reg 32 rules at the rate of $237.50 per fortnight.  It is not to her advantage to transfer to the ISS where the ceiling would apply.

British Retirement pension rules

179.DSS currently have different rules applying to the assessment of British Retirement Income (BRI) pensions where the 10 year residency rules have not been met.  At DSS, any amount of BRI is directly deducted (dollar for dollar) from the maximum pension rate before the income and assets tests are applied.  Depending on the amount of BRI received, this may result in a lower rate of pension payable by DSS than is payable by DVA ISS.  Normal income rules apply (i.e. ISS is withdrawn at the rate of 50 cents for every dollar of income in excess of the ordinary income free area).

Assets Test

180.The assets test for ISS recipients will not differ from the existing assets test that applies to service and DSS pensioners.  But please note that the cut off points at which ISS ceases to be payable are lower than for SP or DSS pensions not paid to war widows(er)s

.

181.The "Ready Reckoner" at Attachment D will give you a guide to the rate of ISS payable with differing amounts of income and assets.

Earnings Credit

182.War widow(er)s who have accrued an earnings credit prior to receiving ISS are allowed to keep the credit until it is used up.  However, no further earnings credit is accruable to war widow(er)s in receipt of ISS.

183.It should be noted that the definition of pension year is the same for ISS recipients as other income support pension recipients.  The definition has not changed.

Death Processing System

184.With the introduction of ISS the death processing system has been modified to:

• cancel SP automatically & pay bereavement payment to widow(er)s from the payday after a veteran's death in cases where it is clear that the war widow(er) is eligible;

• automatically grant ISS where automatic grant of WWP occurs, if they meet eligibility criteria;

• recalculate to standard rate of ISS, where the ISS recipient was remarried and the partner dies (or vice versa if ISS recipient dies and partner is a service pensioner);

• if in receipt of single ISS, cancel ISS automatically from the 2nd payday after death (WWP cancelled 1st payday after death);

• where no SP is in payment and WWP is granted automatically, the bereavement advice will tell the war widow(er) about ISS and invite her/him to apply;

• when a war widow(er) dies, delete data collection details.

185.Where an ISS recipient is married to another income support recipient and the non war widow(er) partner dies the bereavement calculations will be manual. The partnered flag on the PP.PI screen will generate a manual action. See explanation of bereavement calculation rules below.

Bereavement Payment (BP) Calculation

[16]

See attachment H for manual bereavement payment calculation proforma.

[16] (go back)

186.From 20 March 1995, where a war widow(er) is married to another pensioner, and is eligible for either ISS or frozen rate SP, bereavement payments (BP) will be automatically calculated by the DPS and paid.

187.BP paid to all income support recipients

, (including frozen rate service pensioners who have remarried), is calculated based on the actual rate of pension received.

188.BP for ISS recipients who have remarried will be based on the basic rate of ISS, i.e. the rate that would be payable if the ceiling rate rules did not apply.

189.This means the ISS BP is higher than the BP payable to a frozen rate service pensioner (i.e. a war widow(er) who is also a veteran in her/his own right).

190.It should be noted that BP of WWP is not payable.  WWP is cancelled from the pay-day after death.

191.The formula for calculating the ISS bereavement payment is as follows:

ISS BP={(basic married rate + actual pension paid to partner)-basic standard rate} x 7

192.Section 45ZE of the VEA explains that the ceiling rate should not be applied for ISS bereavement payment purposes.  Bereavement payment is worked out based on the amount that would have been payable under the income and assets tests only.  Please note that WWP and any DP must be counted as income in the calculation.

193.The majority of cases will be calculated automatically by DPS.  Cases involving manual rates will have to be calculated manually, however.  Attachment H provides an example of how to calculate the ISS bereavement payment, using the basic ISS rate rules.

194.The lump sum calculators for bereavement payments are contained in sections 45ZB and 45ZD and, where bereavement is payable in respect of the death of a child, section 45ZI VEA.

195.The calculation of ISS bereavement payments where a child has died are worked out as if the child had not died and the child were disregarded in calculating the person's adjusted income free area and maintenance income free area.  Child related BP will generally be calculated automatically through DPS.

Step 1Work out the total ISS payable if the child had not died but disregarding the child for determining the person's adjusted income free area and maintenance free area.  This is known as the continued rate.

Step 2Work out the new rate of ISS payable.

Step 3Take the new rate away from the continued rate.  The result is the deceased child component.

Step 4Multiply the component by the number of paydays in the bereavement lump sum period.

Taxation Implications

196.ISS is taxable unless paid on the grounds of invalidity.  If paid on the grounds of invalidity, ISS is tax exempt until the individual reaches DSS

pension age.  Unless ISS is tax exempt, ISS recipients will be issued with a group certificate for ISS payments.

197.If an ISS recipient is classified as an invalid, and subsequently loses permanent incapacity status (and is under DSS pension age) ISS would no longer be regarded as non-taxable.  The Tax Recording System (TRS) will automatically determine changes to taxable status for these cases.

198.The TRS will also allow tax instalments to be deducted from ISS where required.

199.In the case of transferees from DSS to ISS, two group certificates will be issued for the 1994/95 financial year:

• one by DSS from 1 July 1994 (or from when payment started, if later) up to and including 29 March 1995;  and

• one by DVA from 30 March 1995 to and including 30 June 1995.

200.The Income Tax Assessment Act 1936 (ITAA), is being amended to ensure that ISS invalidity is an exempt pension until the recipient reaches DSS pension age.

201.The ITAA is also being amended to ensure that, where an ISS recipient has a partner receiving an income support pension paid on the grounds of invalidity (by either DSS or DVA), and both the ISS recipient and the partner are under pension age, both the ISS and invalidity payments are exempt until pension age.

Tax File Numbers

202.The majority of war widow(er)s should already have a tax file number (TFN) recorded, unless they have been exempted from doing so

.  Those who do not have an exemption and who receive the ISS, will be required to provide a TFN.  Examiners should take appropriate follow up action to obtain a tax file number, where necessary.

Advices

Daily Advices

203.Daily advices for ISS will be produced automatically on PAS, in the same way as SP advices are generated.  Daily advices will be sent whenever a grant or review of ISS occurs.

204.Information contained in the daily advices will not differ greatly from that contained in SP daily advices.  Information will include the reason for the advice, payment details, income and asset details, and client obligations.  If a more complete list of the information to be included in the daily advices is required, please refer to Central Office minute dated 28 October 1994, entitled "Daily Advice Changes Required for Income Support Supplement".  This minute was supplied to all State Contact Officers.

Quarterly Advices

205.War widow(er)s are already part of the Quarterly Advice process.  The major change for ISS recipients will be the inclusion of obligation paragraphs in the advice.

206.A "one off" implementation advice (based on the normal quarterly advice) was sent to new ISS recipients on 25 March 1995.  This advice included payment details, advice of the half pay arrangement, date of grant, right of review, obligations and any other benefits available.  An example of the one-off advice is at Attachment I.

Bereavement Advices

207.Bereavement advices will be produced automatically on the system for ISS cases.

208.Automatic bereavement advice amendments have been made for cases where the ISS recipient is the surviving partner.

209.The bereavement advices will also provide details where automatic grant of WWP occurs and ISS may be payable.  This will include advice regarding the ISS and the availability of an ISS claim form.  This paragraph would be used in cases where no SP was in payment before the death of the veteran.

Standard Letters

210.State Offices should note that standard PC based letters should be modified to suit advice of New Claim rejections for ISS claimants.  The letters should note that the WWP and any DP received is income for ISS purposes.

Fringe Benefits

211.ISS recipients will be issued with a Pensioner Concession Card (PCC) annually.  The PCC provides pensioners with a range of Commonwealth, State and Local Government benefits and concessions.  These concessions vary from State to State.

212.War widow(er)s who transfer from DSS will be issued with a new DVA PCC on transfer.  The date of grant of pension recorded on the PCC for DSS transferees will be either

:

• 1 April 1993

  [21]

  DI B15/93 refers.

  [21] (go back)
  , if pension was granted before this date; or

• the actual date of grant of DSS pension, if pension was granted on or after 1 April 1993.

213.The date of grant recorded on the PCC for ISS recipients, who were not previously in receipt of DSS income support, will be the date of grant of ISS (or SP if in receipt of SP immediately prior to grant of ISS).

214.The purpose of the ISS is to ensure that ISS recipients receive at least the equal of the rates of pension and benefits payable to war widow(er)s who receive income support from DSS.  Unless excluded under the definition of "dependant" contained in section 4 of the National Health Act 1953, the name of a non-pensioner partner of an ISS recipient can be recorded on the PCC as the dependant of the ISS recipient.

215.If an ISS recipient requests that the name of their non pensioner partner be recorded on their PCC this will have to be done manually by State Office staff.

Travel Vouchers

216.The travel vouchers received by transferees from DSS, for use in 1995, will continue to be valid for the full year.  The vouchers can be used at any time throughout 1995.  New grants of ISS will receive travel vouchers on grant (if none have been issued by DVA or DSS).  From 1996 ISS recipients will receive both their PCC and travel vouchers from DVA.

Transport Concession Cards (TC1)

217.From 1995, Transport Concession Cards (TC1s) are only issued to war widow(er)s who are not eligible for a PCC (i.e. they do not receive any income support).  Not all Australian States issue war widow(er)s with a TC1.

Treatment Eligibility

218.War widows' and widowers' entitlement to treatment will not alter with the introduction of the ISS.

Carer

219.ISS paid on the grounds of caring for a severely handicapped pensioner, unlike carer service pension, can be processed automatically.  In order to pay ISS on carer grounds it is necessary to record “CA” in the Class field on PP.IS.

War Widow(er) Veterans on Ceiling Rate SP

220.As a result of systems changes made for the ISS project, those war widow(er)s who were veterans receiving ceiling rate SP under manual method of assessment (MOA) 64 will be assessed automatically.  This action will be taken shortly after the ISS has been introduced.  The automatic code is MOA 16.

Contact Officers

221.All State Offices have a contact officer (please refer to Attachment G) who holds substantial policy, procedural and system related information (see Attachment J) relating to the Income Support Supplement.  Should your local contact officer be unable to assist you in your inquiries, please contact the Policy Development and Implementation contact officers:

• Project Manager, Oona O'Beirne, on (02) 213 7771;  or

• Project Officer, Fiona Thompson, on (02) 213 7770.

DAVID MACKRELL

DIVISION HEAD

COMPENSATION

DI ATTACHMENTS TABLE OF CONTENTS

Attachment A — Legislative References contained in Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act (No. 2) 1994

Attachment B — Examples of arrears adjustment calculation where non-automatic grant of WWP occurs

Attachment C — Income Support Supplement Claim and Review Forms

Attachment D — Ready Reckoner Charts

Attachment E — System Rules

Attachment F — Data items transferred across from DSS in the Bulk Transfer exercise

Attachment G — State Contact Officers

Attachment H — Bereavement Payment examples

Attachment I — ISS advice issued to transferees in Bulk Automatic Transfer Exercise

Attachment J — Procedural Guidelines relating to the implementation of ISS

ATTACHMENT A

Legislative References contained in Veterans' Affairs (1994-95

Budget Measures) Legislation Amendment Act (No. 2) 1994

REF	Commencement Date
2(3)	Div 3 &7 of Part 2 commencement date on 20 March 1995
	Division 3-Income Support Supplement
13	Amends S 5NB, VEA Definitions of compensation recovery
39C	Amends S 39C, VEA re:  Restrictions on dual pensions to include ISS
15	Inserts S 45AB, VEA ISS payable on the grounds of being a Carer of a severely handicapped pensioner
16	Amends S 45B, VEA ISS may not be payable due to receipt of compensation.
17	Amends S 45D, VEA by insertion of carer service pension in ss45D(1)(ba)
18	Amends S 45V, VEA Re:  Application of income and assets test reductions for income tax purposes so that RAA is not included in order of reduction rules.  RAA is only payable if some ISS is payable (i.e. it is an all or nothing payment).
19	Amends S 45X Module A, VEA (where no dependent children) to take into account Part II or IV dual compensation rules.
20	Amends S 45Y Module A, VEA (where dependent child or children) to take into account Part II or IV dual compensation rules.
21	Amends S 45ZE, VEA to reflect dual compensation rules when calculating bereavement payments
22	Provides minor technical amendments to S 59A, VEA to previously included ISS indexation rules division (see p. 739 & 745 of VEA September 1994 reprint)
23	Amends S 56H, VEA re: date of effect of adverse determination addition of ISS after pension
24	Amends S 59M, VEA to add ISS to Part IIIC Compensation Recovery general effect rules.
25	Amends S 118AA, VEA by the addition of ISS to Education Entry payment rules.
26	S 45A, B, C D, VEA further amended and Creation of a new Part relating to ISS - 45ZK, 45ZL, 45ZM and 45ZN respectively.  Refer to Schedule 3 of VA(1994-95 Budget Measures)Legislation Amendment Bill (No. 2) 1994
	Schedules
Schedule 1 & 2	Substitution of new rate calculator Modules B and C relating to ISS and including new Module for Blind ISS and Module G relating to Remote Area Allowance assessments.
Schedule 3	Range of Minor changes to making reference to account new Parts IIIA, IIIB of VEA
Schedule 4	Consequential amendments to other Acts relating to Income Support Supplement including changes to Disability Services Act 1986, National Health Act 1953, Veterans' Affairs Legislation Amendment Act 1982, Veterans' Entitlements (Rewrite) Transition Act 1991

*Section 9 of the Veterans' Affairs Legislation Amendment Act (No. 2) 1994 (Royal Assent 8 December 1994) amends the definition of qualifying age for Income Support Supplement recipients contained in s45A of the VEA so that it is directly linked to pension age under s5QA and is also covered under the age equalisation legislation.

ATTACHMENT B

ARREARS ADJUSTMENT CALCULATIONS WHERE NON-AUTOMATIC GRANT OF WAR WIDOW(ER) PENSION OCCURS AND PERSON IS RECEIVING SERVICE PENSION

Example

• On 18 July 1995, a 69 year old widowed partner is receiving the maximum standard rate of SP, $326.10 per fortnight. She is also receiving $6.89 per fortnight dependant DP.  The widowed partner is not a veteran with qualifying service.  Prior to the veteran's death, both partners were receiving the maximum partnered rate of service pension.  The widowed partner has no other income.

• The widowed partner is granted WWP effective the pay day following the veteran's death.  In this case, the veteran died on 1 April 1995.  The dependant DP and SP must be cancelled. At the same time ISS should be granted.

• ISS is payable from the latter of:

-Date of grant of WWP;

-Date standard rate SP was payable;  or

-30 March 1995.

• In this case ISS is payable from 13 April 1995.  Apart from the newly granted WWP, the widowed partner has no other income.  ISS is payable at the ceiling rate of $120.10 per fortnight.

• Adjustment to bereavement payments will also be necessary to counter the retrospective cancellation of SP.  The calculation of BP adjustment is as follows:

Step 1

Received per fortnightAmount payable

$$

272.00 partner — 272.00 partner

272.00 veteran272.00 veteran

544.00 Total SP prior to Vets death 544.00 Total SP prior to Vets death

326.10 less SP to widow/er120.10 Less ISS to widow/er

217.90 BP X 7 fortnights.423.90 BP X 7 fortnights.

Step 2

Subtract amount BP paid from amount BP payable

$

423.90-

217.90

206.00 per fortnight additional bereavement adjustment X 7

B2

Please note this amount directly offsets the overpayment of SP during the BP period, that is:

$

326.10 SP paid -

120.10 ISS payable

206.10 per fortnight overpayment of SP due to grant of WWP.

• Assuming the next available pay day is 3 August 1995 arrears adjustment should be calculated as follows:

$$

WWP              0.00              350.10 — 13/04/95 — to — 02/08/95

DP              6.89              0.00              13/04/95 — to — 02/08/95

SP              326.10              0.00              13/04/95 — to — 02/08/95

ISS              0.00              120.10              13/04/95 — to — 02/08/95

BP              217.90              423.90 — 13/04/95 — to — 19/07/95

• It is important to note that any overpayment of SP for the period following the bereavement period must still be recovered from arrears of WWP.

• Although pharmaceutical allowance (PA) is not payable in respect of ISS payments, it is payable in respect of WWP at the rate of $5.20 per fortnight.  Because PA was already paid to the widow(er) at the rate of $5.20 per fortnight no arrears adjustment of PA is necessary.

Impact of child related payments on grant of WWP

• Child related payments, including DCAO, GA, child related RA and child related RAA, can be paid to both widowed SP partners and to ISS recipients.  If single orphan's pension is granted, this will not affect the continuation of income support child related payments.  If the dependent child is a student child any VCES education allowance is regarded as a prescribed payment and arrears adjustments may be necessary.

ATTACHMENT C

CLAIM FOR INCOME SUPPORT SUPPLEMENT BY A WAR WIDOW OR WIDOWER

A new claim package was created specifically for the ISS.  The forms for use in the application kit are

D2663	Question 29 of D2663 can be treated as an informal claim for ISS
D529	Claim for ISS by a war widow or widower
D530	Preliminary Details
D531	Retirement Benefits
D532	Information on your Superannuation pension
D533	Investment Form A- Shares
D534	Investment Form B
D535	Separation from Partner
D536	Real Estate
D537	Details of Business
D538	Farm/Hobby Farm
D539	Carer form
D540	Investment Form C- Bonds, Debentures and Term Deposits
D541	Compensation and Damages (for SP use also)
D542	Information on your Annuity or Allocated Pension
D543	Invalidity details
D544	Dependent student
D545	Rent
D546	Retirement Village
D547	Care Accommodation
D548	Employment Report (Continuing work)
D549	Employment Report (Ceased/Ceasing work)
D550	Earnings- Self-employed, contract, part time or casual employment

Medical Report (D2569)

A "Medical Report- Permanent Incapacity for SP Purposes" form, similar to the D2569, will be created for use in the ISS claim package.

ATTACHMENT D

READY RECKONER

As at 30 March 1995

The following tables are a guide to the rate of ISS you can receive.  The fortnightly ISS shown in the tables does not include Pharmaceutical Allowance, as this is paid with your WWP.

ISS is calculated under separate Income and Assets tests.  You must use both the Income Test and the Assets Test Tables and compare the two amounts.  The test which gives the lower rate is used to work out how much pension you will get.

Once you have worked out the rate payable under the income and assets tests (see the rates on the following charts), this rate should be compared to the ceiling rate (usually $120.10 per fortnight).  The lower of these two rates is the amount of ISS payable.

For example:

Step 1: Using the Income Test table, work out the 'ISS a fortnight', based on your fortnightly income and marital circumstances.

Step 2: Then, using one of the Assets Test tables, work out the 'ISS a fortnight', based on your assets, your marital circumstances and whether you are a homeowner or non-homeowner.

Step 3: Compare the 'ISS a fortnight' amounts under Steps 1 and 2.  Then, compare the lower of those 2 amounts to the ceiling rate, (generally $120.10).

The amount of ISS payable is the lower of the ceiling rate and the rate payable under the income or assets tests.

For details of what income and assets are counted, a definition of Homeowner and how the income and assets tests work, refer to the "Income Support Supplement - An Overview" brochure.

D2

INCOME TEST TABLE

Please note, due to the ceiling rate the rate generally paid is the lower of $120.10 per fortnight or the actual rate of pension based on the income levels set out below.

Married Couple			Single War Widow or Widower
Combined Income per fortnight	Income Support Supplement $ per fortnight each	Income per fortnight		Income Support Supplement $ per fortnight
0.00	272.00	0.00		326.10
156.00	272.00	90.00		326.10
157.00	271.80	91.00		325.60
160.00	271.00	100.00		321.10
180.00	266.00	120.00		311.10
200.00	261.00	140.00		301.10
220.00	256.00	160.00		291.10
240.00	251.00	180.00		281.10
260.00	246.00	200.00		271.10
280.00	241.00	220.00		261.10
300.00	236.00	240.00		251.10
350.00	223.50	260.00		241.10
400.00	211.00	280.00		231.10
450.00	198.50	300.00		221.10
500.00	186.00	320.00		211.10
550.00	173.50	340.00		201.10
600.00	161.00	360.00		191.10
650.00	148.50	380.00		181.10
700.00	136.00	400.00		171.10
750.00	123.50	450.00		146.10
800.00	111.00	500.00		121.10
900.00	86.00	550.00		96.10
1000.00	61.00	600.00		71.10
1100.00	36.00	650.00		46.10
1200.00	11.00	700..00		21.10
1220.00	6.00	720.00		11.10
1233.60	2.60	731.80		5.20
1243.00	1.00	741.20		1.00
1244.00	0.00	742.20		0.00

D3

ASSETS TEST TABLE

Please note, due to the ceiling rate the rate generally paid is the lower of $120.10 per fortnight or the actual rate of pension based on the asset levels set out below.

HOMEOWNER

Married Couple			Single War Widow or Widower
Combined Assets $	Income Support Supplement $per fortnight each	Assets $		Income Support Supplement Pension $per fortnight
0.00	272.00	0.00		326.10
163500.00	272.00	115000.00		326.10
164500.00	270.50	115500.00		324.60
165500.00	269.00	116000.00		323.10
166500.00	267.50	116500.00		321.60
167500.00	266.00	117000.00		320.10
168500.00	264.50	117750.00		317.90
170500.00	261.50	118750.00		314.90
180500.00	246.50	120750.00		308.90
190500.00	231.50	125750.00		293.90
200500.00	216.50	130750.00		278.90
210500.00	201.50	135750.00		263.90
220500.00	186.50	140750.00		248.90
230500.00	171.50	145750.00		233.90
240500.00	156.50	150750.00		218.90
250500.00	141.50	155750.00		203.90
260500.00	126.50	160750.00		188.90
270500.00	111.50	165750.00		173.90
280500.00	96.50	170750.00		158.90
290500.00	81.50	180750.00		128.90
300500.00	66.50	190750.00		98.90
310500.00	51.50	200750.00		68.90
320500.00	36.50	210750.00		38.90
330500.00	21.50	215750.00		23.90
337000.00	11.80	218000.00		17.10
343500.00	2.60	222250.00		5.20
344000.00	1.00	223250.00		1.00
345000.00	0.00	223750.00		0.00

D4

ASSETS TEST TABLE

Please note, due to the ceiling rate the rate generally paid is the lower of $120.10 per fortnight or the actual rate of pension based on the asset levels set out below.

NON-HOMEOWNER

Married Couple			Single War Widow or Widower
Combined Assets $	Income Support Supplement $per fortnight each	Assets $		Income Support Supplement $per fortnight
0.00	272.00	0.00		326.10
245500.00	272.00	197000.00		326.10
250000.00	265.30	197250.00		325.40
250500.00	264.50	197500.00		324.60
255000.00	257.80	197750.00		323.90
255500.00	257.00	198000.00		323.10
260000.00	250.30	198250.00		322.40
260500.00	249.50	198500.00		321.60
265000.00	242.80	199250.00		319.40
270000.00	234.30	200250.00		316.40
280000.00	220.30	205250.00		301.40
290000.00	205.30	210250.00		286.40
300000.00	190.30	215250.00		271.40
310000.00	175.30	220250.00		256.40
320000.00	160.30	225250.00		241.40
330000.00	145.30	230250.00		226.40
340000.00	130.30	235250.00		211.40
350000.00	115.30	240250.00		196.40
360000.00	100.30	250250.00		166.40
370000.00	85.30	260250.00		136.40
380000.00	70.30	270250.00		106.40
390000.00	55.30	280250.00		76.40
400000.00	40.30	290250.00		46.40
410000.00	25.30	295250.00		31.40
416500.00	15.50	298500.00		21.60
417500.00	14.00	299250.00		19.40
425500.00	2.60	304250.00		5.20
426000.00	1.00	305250.00		1.00
427000.00	0.00	305750.00		0.00

ATTACHMENT E

SYSTEMS GUIDE

Prepared by Graham del Casale & Carol Walsh

CHANGES

• Permanent Incapacity classification of pension.

• PI class of SP has replaced PU.

• All current cases have been converted.

NEW SCREENS

CMS CLASSIFY PENSION (CM.CP)

• Introduction of four new classifications.

• TRANSFER IN SP/DP/ISS  used for interstate transfers.

• DSS TRANSFER IN used for transfer from DSS.

• Use of this class will generate a 1/2 fortnight arrears.

• ISS NEW CLAIM used for granting ISS benefit for existing War Widow/er

• ISS REVIEW used for reviews.

DETERMINATION (PP.DE)

The screen layout has been changed to accommodate ISS payments and updating the names of allowances.

Note: the screen may now display data on more than one page if there are several allowances involved.

Minor changes as requested by the states have been actioned.

E2

PERSONAL ASSESSMENT ISS (PP.PI)

Used to set personal details for ISS recipients and most importantly marital status.

Class OA, PI, CA (carer pension), DC (dependent children - client is under qualifying age but has dependent children) and

TX (Taxable - none of the others but DSS was paying them)

Entitlement  deceased veteran's war entitlement code.

Marital Status  The following combinations are valid.

Partnered = Y

Partner not receiving DSS or SP assessment (same as 04)

Partnered = Y

Partner at DSS = Y must also have Partners SSR No. entered.

This results in a normal married assessment.(same as 03)

Partnered = Y

Partner paid SP/ISS other file = Y.

This results in a normal married assessment. (same as 01)

Partner paid DVA DP =Y

If this indicator is combined with any other partnered situation a manual calculation of the ISS rate will be required as the partner's DP should be included in the assessment as income.  Manual Rates screen must be used to set the payment rate.

Some difficult case scenarios are attached.

CEILING RATE

Ceiling rate must be entered.

Other indicators are the same as for service pensioners RAA, SEP MED etc.

E3

REMARRIED CASES

Case No. 1

War Widow/er remarries a non income support pensioner (partner).

• You will not be able to record the partner on the CDB.

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name on PP.TE.

• The partnered flag will generate a manual case for DPS.

This case will be an automatic assessment.

Case No. 2

War Widow/er remarries a DSS client (partner).

• You will not be able to record the partner on the CDB under the war widow/er file number.

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name on PP.TE.

• You will need to set 'partner paid at DSS' and 'partners SSR no.' indicators to 'Y' on PP.PI.

• The partnered flag will generate a manual case for DPS.

This case will be an automatic assessment.

E4

Case No. 3

War Widow/er remarries a DSS client in receipt of DVA DP(partner).

• You will not be able to record the partner on the CDB under the war widow/er file number.

• The partner and (war widow/er) can be recorded under his/her own file number.

• The war widow/er can be cross referenced under the partner's file number.

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name and file number on PP.TE.

• You will need to set 'partner paid at DSS', 'partners SSR No. 'and 'partner DVA DP' to 'Y' on PP.PI

This will be a manual rates case.

The partnered flag will generate a manual case for DPS.

Case No. 4

War Widow/er remarries a DVA client in receipt of SP (partner).

• You will not be able to record the partner on the CDB under the war widow/er file number.

• The partner and (war widow/er) can be recorded under his/her own file number.

• The war widow/er can be cross referenced under the partner's file number.

• You should record the war widow/er's name and file number on the partner's PP.TE.

• You will be able to record the war widow/er in an assessment with the partner under the partner's file number.

• For these cases 'paid on other/interstate file no.' indicator must be set to 'Y' on the SPS's PP.PA screen.

E5

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name and file number on PP.TE.

• You will need to set 'partner paid SP/ISS on other file no.' to 'Y' on PP.PI.

• The partnered flag will generate a manual case for DPS if the war widow/er dies.

• The partner paid SP/ISS on other file no. will generate a manual case for DPS if the partner dies.

This case will be an automatic assessment.

Case No. 5

War Widow/er remarries a DVA client in receipt of SP and DP (partner).

• You will not be able to record the partner on the CDB under the war widow/er file number.

• The partner and (war widow/er) can be recorded under his/her own file number.

• The war widow/er can be cross-referenced under the partner's file number

  [22]

  But the partner cannot be cross referenced under the WWP number, as advised by SM&S, 16/03/95.

  [22] (go back)
  .

• You will be able to record the war widow/er in an assessment with the partner under the partner's file number.

• For these cases 'paid on other/interstate file no.' indicator must be set to 'Y' on the SPS's PP.PA screen.

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

E6

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name on PP.TE.

• You will need to set 'partner paid SP/ISS other file no.' to 'Y' and 'partner DVA DP' to ''Y' on PP.PI.

This will be a manual rates case.

The partnered flag will generate a manual case for DPS if the war widow/er dies.

The partner paid SP/ISS on other file no. will generate a manual case for DPS if the partner dies.

Case No. 6

War Widow/er remarries a non income support pensioner (partner) in receipt of DVA DP.

• You will not be able to record the partner on the CDB under the war widow/er file number.

• The partner and (war widow/er) can be recorded under his/her own file number.

• The war widow/er can be cross referenced under the partner's file number

  [23]

  But the partner cannot be cross referenced under the WWP number, as advised by SM&S, 16/03/95.

  [23] (go back)
  .

• You should record the war widow/er's name and file number on the partner's PP.TE.

• You will not be able to record the partner in an assessment with the war widow/er.

• Income and asset details (for both partners) will need to be recorded under SPS in his/her assessment.

• You will need to set 'partnered' indicator to 'Y' on PP.PI and record client's name on PP.TE.

• You will need to set 'partner DVA DP' indicator to 'Y' on PP.PI.

This will be a manual rates case.

E7

The partnered flag will generate a manual case for DPS.

NOTE:DP above can include WWP.  If WWP is payable for the partner then you will not be able to cross reference.

E8

OTHER ASSETS (PP.OA)

This screen will contain the automatically loaded DSS transfer Income and Asset details.

This screen will allow DSS transfer data to be entered for future DSS TRANSFER IN cases and interstate transfer TRANSFER IN SP/DP/ISS cases.

Enter TypeDS  for a DSS TRANSFER ISS recipient or

Enter TypeDT  for a DSS TRANSFER STD standard rate partner pensioner and Enter Total Income details and

Enter Total Asset details.

E9

SOME IMPORTANT INFORMATION FOR ISS PROCESSING

ISS cases automatically transferred from DSS

These cases will have asset and income totals placed on PP.OA.

Some home situation details will be placed on PP.HO.

Note : any future review of I/A details will require full data collection and deletion of old DSS transfer information on PP.OA.

You cannot have DSS transfer data and other income or asset data in the same assessment.

Note : cases recorded as partnered have been assessed as a normal married assessment however only the Partnered = Y indicator has been set.

Therefore in any review the complete marital situation will need to be ascertained and entered on PP.PI. (PP.TE may also be used if appropriate)

ISS transfer cases requiring manual State action.

Cases which did not load automatically will have a Manual Case registered.

The following screens need updating ;

PP.AC

PP.PI  add ceiling rate and marital details, and set any other relevant indicator.

PP.HO  add $0.00 asset value for home contents but enter home situation details.

PP.OA  add Type DS and enter total Asset and Income amounts provided by DSS.

Advices/arrears/submission etc as normal.

DSS Transfer In cases

Note : these cases will allow either full data collection or the addition of DSS transfer data only.

The following screens need updating ;

CM.CP

CM.UA to set attributes

PP.AC

PP.PI  add ceiling rate and marital details, and set any other relevant indicator.

(PP.TE may also be used if appropriate.)

If fully data collecting, use the data collection screens as normal.

if using DSS data only ;

PP.OA  to enter income and asset details provided by DSS.

PP.HO  to enter $0.00 contents and other home situation details.

PP.DS

Payment/advices/arrears/submission etc as normal.

E10

Note : you can not have DSS transfer data and other income or asset data in the same assessment.

Note : some current assessments of War Widows may have some old income or asset details from a previous SP assessment and if this is so Submission may tell you to fully data collect and delete OA details.

One solution is to delete action assessment on PP.AC.  Then add a new assessment, but delete the COPY /TER previous assessment indicator. (Usually defaults as 1.)

This will remove any old data from the action assessment but DP details and PY details should remain.

Transfer In SP/DP/ISS

Note : these cases will allow either full data collection or the addition of DSS transfer data only.

The following screens need updating:

CM.CP

CM.UA to set attributes

PP.AC

PP.PI  add ceiling rate and marital details, and set any other relevant indicator.

(PP.TE may also be used if appropriate)

If fully data collecting, use the data collection screens as normal.

If using DSS data only:

PP.OA  to enter DSS income and asset details.

PP.HO  to enter $0.00 contents and other home situation details

PP.DS

Payment/advices/arrears/submission etc as normal.

NOTE:  As Transfer In SP/DP has now become Transfer In SP/DP/ISS your interstate transfer clerk, will now need to make a choice between

PP.PA (SP) and PP.PI (ISS) and set SP or ISS eligibility plus any other indicators.

Note : you cannot have DSS transfer data and other income or asset data in the same assessment.

Note : some cancelled assessments may have some old income or asset details from a previous SP assessment and if this is so Submission may tell you to fully data collect and delete OA details.

One solution is to delete that assessment on PP.AC and then add a new assessment but delete the COPY /TER previous assessment indicator (usually 1).

This will remove any old data from the action assessment but DP details and PY details should remain.

E11

ISS New Grants

The following screens need updating:

CM.CP

CM.UA to set mandatory attributes

PP.AC

PP.PI  add ceiling rate and marital details, and set any other relevant indicator.

(PP.TE may also be used if appropriate)

Data collection screens as normal

Note:  because it was not possible to allow a new type of person indicator you cannot enter a partner's I/A details directly on the data collection screens.  You must enter them using the war widow/er's person indicator.

Payment/advices/arrears/submission etc as normal.

SP VETERAN WAR WIDOW/ER

Note:  changes to the Personal Assessment PP.PA screen to accommodate automatic assessment of War Widow/er SP Veterans , currently manual rates cases will hopefully be introduced before cut off for payday 73.  These cases have an Amending Legislation registration.

There are 10 cases nationally that will require a Statutory Increase.  If the new Personal Assessment is not available by cut off you can still process these cases through manual rates.

E12

NEW CMS CLASSIFICATIONS

DSS TRANSFER IN

• This classification will trigger the half payment

• Attributes of ISS

ISS NEW CLAIM

ISS REVIEW

ISS NEW CLAIM CLASSIFICATION

MANDATORY ATTRIBUTES

• Age

• Permanent Incapacity

• Carers

• Dependent Children

CMS CLASSIFICATIONS ALLOWING RETENTION OF DT OR DS ON OTHER ASSETS SCREEN

• DP cancellation

• DP data change

• DP payment change

• Transfer out

• Transfer in SP/DP/ISS

• DSS Transfer In

• Nil pension variation

• DP grant

• DP variation

PIPS SCREEN CHANGES

NEW PERSONAL ASSESSMENT SCREEN FOR ISS- PP. PI

NOTE:  PP.PA STILL USED FOR CHILDREN

ADDITION OF ISS TO THE FOLLOWING SCREENS

• Historic Dates

• Manual Rates

• Trial

• Determination

• Cancel Determination

E13

DT & DS- NEW TYPE ON OTHER ASSETS

ISS- NEW TYPE ON ARREARS

TAXATION SCREEN CHANGES

PH.IY- NEW TYPES AS FOLLOWS

• IOA — ISS OLD AGE

• IPI — ISS PERMANENTLY INCAPACITATED

• ICA — ISS CARER

• IDC — ISS DEPENDENT CHILDREN

• ITX — ISS TAXABLE

THESE TYPES WILL BE DERIVED FROM PP.PI AND USED ON OTHER TAXATION SCREENS

GENERAL TIDY UP OF TERMINOLOGY

• REMOTE LOCALITY ALLOWANCE BECOMES REMOTE AREA ALLOWANCE

• SUPPLEMENTARY ASSISTANCE BECOMES RENT ASSISTANCE

• ADDITIONAL PENSION FOR CHILDREN BECOMES DEPENDENT CHILD ADD-ON

• GUARDIANS ALLOWANCE BECOMES GUARDIAN ALLOWANCE

• PU BECOMES PI

• REG. 66 SP BECOMES FULL TREATMENT SP

• REG. 66 SP/DP BECOMES FULL TREATMENT DP/SP

PERSONAL ASSESSMENT FOR ISS SCREEN (PP.PI) MAJOR INDICATORS

• CLASS- OA, PI, DC, CA, TX

• CEILING RATE- DETERMINES MAXIMUM RATE OF PENSION PAYABLE

• PARTNERED- "Y" IF CLIENT IS MARRIED

E14

• PARTNER DVA DP- "Y" IF CLIENT'S PARTNER IS IN RECEIPT OF DVA DP INCLUDING WWP

• PARTNER PAID AT DSS- "Y" IF CLIENT'S PARTNER IS PAID BY DSS

• PARTNER PAID SP/ISS OTHER FILE NO:- "Y" IF PARTNER IS PAID SP BY DVA

PP.PI INDICATORS FOR MARRIED CASES

• PTNPTN DSSPTN DPPTN DP

• YNNN

• THEN SAME AS MOA 04 - MOA 15

• YYNN

• THEN SAME AS MOA 03 - MOA 15

• YYYN

• THEN MANUAL CASE - MOA 99

• YNNY

• THEN SAME AS MOA 01 - MOA 15

• YNYY

• THEN MANUAL CASE - MOA 99

• YNYN

• THEN MANUAL CASE MOA 99

FIRST HALF PAY FOR ALL FUTURE DSS TRANSFEREES

HALF PAYMENT

• ISS

• RENT ASSISTANCE (NO CHILDREN)

FULL PAYMENT

• DEPENDENT CHILD ADD-ON

• REMOTE AREA ALLOWANCE

PMF UPDATE

• NEGATIVE OTA WILL BE EQUAL TO

-HALF SERVICE PENSION (ISS) AND RENT ASSISTANCE

(NO CHILDREN)

-HALF THE LIMITATION AMOUNT APPLIED TO THE PMF

• HALF THE TAXATION DEDUCTION AMOUNT WILL BE APPLIED TO THE PMF

E15

• MANUAL TRANSACTION REQUIRED TO UPDATE PMF FOR PAYDAY AFTER ISS PUT INTO PAYMENT

ADVICES AND PCC ISSUE

• BULK ISSUE WITH SEPARATE MAILOUT

• ADVICE AND PCC WILL BE PRODUCED THROUGH NORMAL PIPS PROCESSING AS LONG AS:

-  DSS TRANSFER IN WITH ISS ATTRIBUTE SET

CCPS PROCESSING

• If the partner's DP is increased nothing will be triggered automatically by the system.  For these cases local procedures should take place.

• These cases will be reported as manual rates cases each AL so it may pay to look at the partner's record to see whether DP has increased

ATTACHMENT F

DATA TRANSFER ITEMS

Social Security Reference Number

Veterans' Affairs Reference Number

Name

Sex

Date of Birth

Correspondence Address

Phone details

Marital Status

Separated due to illness

Number of children

Date of Death

Reason for non transfer

Date of Grant

Basic Pension

DSS Pension Type

Ceiling Rate Applicable

Taxable and non taxable components

Pension Allowances

Tax Deductions

Review details

Rent details

Asset thresholds

Limitations/suspensions

Overpayments

PA advances

Direct Debit details

Whether Income or Asset tested

Blinded

BRI without 10 years residency

Exempt superannuation indicator

Compensation claim outstanding

Manual/High risk cases

Total Asset amount

Total Income amount

ATTACHMENT G

STATE ISS CONTACT OFFICERS

Victoria	Diane Gilbert	(03) 284 6797
Tasmania	Doug McLean	(002) 216 684
Queensland	Roslyn Scarcella	(07) 223 8442
South Australia	Angelo Corbo	(08) 213 2288
Western Australia	Des Bovell	(09) 366 8549
New South Wales	Lyn Firth	(02) 213 7172

ATTACHMENT H

ISS BEREAVEMENT PAYMENT CALCULATION EXAMPLE

EXAMPLE

An ISS recipient is remarried to a service pensioner.  Apart from WWP they have no other income.  If the service pensioner partner dies, bereavement payments would be calculated using the basic rate of ISS (that is the amount of ISS paid if a ceiling rate did not apply), rather than the actual amount received.

Step 1 calculate the basic partnered rate of ISS:

              $

Basic partnered rate ISS =              350.10 (income)

              175.05 (income halved)

                78.00 (less OIFA)

                97.05 (Assessable Income (AI) halved)

                48.52 (Deductible Income(DI))

              272.00 (Max Basic married rate ISS - PA not included.)

                48.52 (less DI)

              223.48* Round up to $223.50 basic rate ISS

The ISS recipient would actually be receiving $120.10 p.f. due to the ceiling.

Step 2 calculate the amount of pension the service pensioner partner was receiving immediately prior to death:

The SP partner would have been in receipt of the full maximum married rate of SP (includes PA) $274.60 p.f. because WWP is not regarded as income for SP purposes.

Step 3 calculate the basic single rate payable to the ISS recipient on the death of the SP partner:

              $

Basic STD rate ISS =              350.10 Total Income

                90.00 (less OIFA)

              260.10 (Assessable Income (AI) halved)

              130.05 (Deductible Income(DI))

              326.10 (Max basic standard rate ISS)

              130.05 (less DI)

              196.05* Round up to $196.10 p.f. basic rate ISS

Step 4 Applying the basic rates, calculate the amount of bereavement payment payable to the ISS recipient:

($223.50 + $274.60) - $196.10 = $302.00 X 7 = $2,114 bereavement payment payable

H2

Where an assets tested case arises the calculation would be:

• twice the rate paid to the deceased partner;

• less the standard basic rate that would have been paid to the ISS recipient following the application of the assets test; but

• prior to the application of the ceiling rate rules;

• multiplied by 7 fortnights.

H3

BEREAVEMENT CALCULATION PROFORMA

Manual action where Vet SP (or DSS) partner of ISS recipient dies.

Step 1	Work out total income of couple prior to death (includes WWP & DP)	Total Combined Income	$
Step 2	Halve total income of couple	Income Halved	$
Step 3	OIFA=ordinary income free area for partnered person.	OIFA	$
Step 4	Subtract partnered OIFA, step 3 from step 2 to obtain Assessable Income (AI)	Step 2-Step 3=AI	$
Step 5	Halve Assessable Income = Deductible Income (DI)	Divide Step 4 by 2 =DI	$
Step 6	Max basic partnered rate ISS (ie, if ceiling rate rule not applied & excluding PA)	Max Partnered Rate	$
Step 7	Subtract Step 5 from Step 6 = rate ISS payable if ceiling rate rule did not apply (Rounded).	Step 6 - Step 5= Max basic rate of ISS	$
Step 8	The actual rate of SP(or DSS pension) paid to the deceased partner (includes PA)	Actual SP paid to deceased	$
Step 9	Add result of step 7 and step 8 = combined rate of income support for BP purposes.	Step 7 + Step 8	$
Step 10	ISS recipient's income following partner's death (includes WWP & DP)	ISS Total Income	$
Step 11	Standard rate Ordinary Income Free Area (OIFA).	STD rate OIFA	$
Step 12	Subtract step 11 (OIFA) from step 10=Assessable Income	Step 10-Step 11=AI	$
Step 13	Halve step 12 Assessable Income = Deductible Income	Step 12 divided by 2 = DI	$
Step 14	Max basic standard rate ISS (ie ceiling rate rules not applied & excluding PA)	Max basic STD rate ISS	$
Step 15	Subtract step 13 from step 14 = rate of ISS payable before application of ceiling rate rules (Rounded)	Step 14-Step 13	$
Step 16	Subtract step 15 from step 9	Step 9 - Step 15	$
Step 17	Multiply the result of Step 16 by 7 fortnights=total BP payable.	Step 16 X 7	$

ATTACHMENT I

WAR WIDOW - Transfer to ISS

Commonwealth Department of Veterans' Affairs

BRANCH OFF ICE

Centennial Plaza

280 Elizabeth Street

Sydney NSW 2000

Postal Address:

GPO Box 3994, Sydney NSW 2001

ELSIE WARWIDOW

1 PARK LANE

Telephone:

MONOPOLY  NSW  2000

Metropolitan residents:213 7777

Country residents: 008 257251

25 March 1995

YOUR FILE NUMBER IS NX123456

Dear Mrs Warwidow

I am pleased to be able to tell you the details of your new Veterans' Affairs Income Support Supplement, from 30 March 1995.  The ISS is a welcome change for many war widow(er)s who prefer to deal with one Department for all pension matters.

Payment Details

You received your last fortnightly payment of Social Security pension on 23 March 1995.  This is for the two weeks ending 6 April 1995.  On 30 March 1995 you will receive ONE week of Income Support Supplement, plus your normal war widow/ers pension.  This is NOT a bonus.  The one week payment is necessary because Veterans' Affairs and Social Security pay their pensions on alternate Thursdays.

Then on 13 April, the pay day for Veterans' Affairs pensions, and every fortnight after that you will receive your normal full fortnightly amount made up of your ISS plus your war widow/ers pension.

You will not be financially disadvantaged by these arrangements.

In summary, on 23 March 1995 you will receive your last normal fortnightly payment of Social Security pension.  On 30 March 1995 you will receive a special one week adjustment of ISS from Veterans' Affairs and on 13 April 1995 you will receive your first normal fortnightly ISS payment.

Please note that your war widow/er pension, pharmaceutical allowance and remote area allowance (where applicable) are not affected.  You will receive your normal entitlement to these payments on 30 March 1995.

Your ongoing pension details are set out below.

PAYMENTS TO ELSIE WAR WIDOW FROM 13 APRIL 1995

	TOTAL FORTNIGHTLY PAYMENT	$&XXX.XX
	Comprising:
	-War Widow's Pension	$&XXX.XX
	-Domestic Allowance	$&XXX.XX
	-Pharmaceutical Allowance	$&XXX.XX
	-Income Support Supplement	$&XXX.XX

From 13 April 1995 this amount will be credited each fortnight to account number &ACCTNUMB., in the name of &ACCTITLE. at the &ACCTINST.

PLEASE NOTE YOUR FIRST PAYMENT OF ISS ON 30 MARCH 1995 WILL BE A HALF PAYMENT OF ($&XX.XX).

Fringe Benefits

While you were receiving a Social Security pension you had a pensioner concession card (PCC) that gave you fringe benefits.  As an ISS recipient, you will be provided with the same fringe benefits provided by Social Security.  Veterans' Affairs will provide you with a new PCC.  Until you receive the new card, you can continue to use your old Social Security PCC.

You may be asked by some service providers to produce your new Veterans' Affairs PCC with your new number when you claim concessions.

PCC holders are entitled to one issue of concession vouchers each calendar year.  As you have already received your concession vouchers from Social Security, Veterans' Affairs will not issue new vouchers for use in 1995.

In 1996 Veterans' Affairs will issue both a new PCC and vouchers to you.

Your Obligations to the Department

You will continue to have the same sort of obligations you had while you were getting a Social Security pension but now your obligations are with Veterans' Affairs.

Obligations- Financial

The amount of ISS you receive will depend on the amount of income and assets you have.  Your ISS is paid under the (income/assets) test.  You must tell the Department within 21 days if your combined income rises above ($&XXX.XX) a fortnight.  You must also tell us if the value of your assets rise above ($&XXX,XXX).

Obligations- General

You must tell us if you:

• Change your postal and/or residential address

• Leave Australia permanently

• Are granted any pension or benefit from the Department of Social Security

• Are granted any pension or benefit from an overseas authority

• Are imprisoned after conviction for an offence.

You must tell us if there is any change in your situation if any of the following circumstances apply:

• You are a homeowner/mobile homeowner/medical institution resident

• You live in a retirement village

• You have a life interest in your home

• You pay rent

• You live in a remote area and receive remote area allowance.

Obligations- Domestic Situation

You must tell us if your marital circumstances change, eg you marry or remarry or start to live in a defacto or marriage-like relationship.  If you have remarried you must tell us if you divorce or separate.

Your Right Of Review

If you do not agree with a decision affecting your rate of Income Support Supplement, you may apply to have it reviewed by a Delegate of the Repatriation Commission.  The Delegate may decide the original decision was correct, or may decide to change it.  If the decision is changed, your pension may be increased or reduced.

Any request for a review must be made in writing within three months of the day you receive this letter.  Your letter should state the specific grounds for your request for review.

Release and Use of Information

The income and asset information you give to this Department is used to work out your eligibility for pension and other benefits.  Some information that you have

supplied may be released to other agencies or bodies such as the Department of Social Security, the Australian Taxation Office, the Health Insurance Commission, various state and local government authorities and superannuation funds.

The reason for supplying information to such agencies or bodies is to verify income/asset details, matching of information, payment of accounts for treatment and to verify eligibility for rebates or concessions.

Notification Arrangements

We will write to all ISS payees in July each year.  This letter will give you details of your income and assets currently held by Veterans' Affairs and also your obligations regarding any changes to those details.  It will include your Group Certificate if your pension is regarded as taxable income.

Enclosed with this letter is a calendar which will include Veterans' Affairs Pension pay days, telephone allowance pay days and other relevant information for 1995.  The calendar will be mailed to you in December each year.

If you have any questions about any of the above matters, please contact this office at the address or telephone number shown at the top of this letter.

Yours sincerely

G K Stonehouse

Deputy Commissioner as

Delegate of the Secretary

ATTACHMENT J

PROCEDURAL INFORMATION SUPPLIED PRIOR TO THIS DI

DATE — ISSUED — DESCRIPTION

05/09/94 — QUESTIONS AND ANSWERS (Q&As)

12/09/94 — WORKLOAD AND REVIEW STRATEGY

12/09/94 — TELEPHONE/COUNTER ENQUIRY DATA COLLECTION FORM

20/10/94 — FINAL USER REQUIREMENT DOCUMENT (URD) VERSION 1.2

OCTOBER 94 — COPY OF DRAFT SYSTEM EXTERNAL SPECIFICATIONS

24/10/94 — MODULE 1 PROCEDURAL GUIDELINES

08/11/94 — SYSTEMS REQUIREMENT DEFINITION (SRD) VERSION 1.6

09/11/94 — MODULE 2 PROCEDURAL GUIDELINES

11/11/94 — MODULE 3 PROCEDURAL GUIDELINES

14/12/94 — DI B60/94 INCOME SUPPORT SUPPLEMENT CLAIM FORMS

20/12/94 — MODULE 4 PROCEDURAL GUIDELINES

19/01/95 — MODULE 5 PROCEDURAL GUIDELINES

01/03/95 — ISS (& STD RATE) SYSTEMS HANDOUT TO SSOs

09/03/95 — MODULE 6 PROCEDURAL GUIDELINES

15/03/95 — SYSTEMS GUIDE FOR STATES' INFORMATION

15/03/95 — REVISED QUESTIONS & ANSWERS

20/03/95 — COPY OF CONCESSION PROVIDER LETTER

24/03/95 — PROCEDURAL GUIDELINES FOR GRANT OF ISS WHEN NON AUTO GRANT OF WWP HAS OCCURRED