B45/1995 CALCULATION OF INCOME

DATE OF ISSUE: 14 JULY 1995

CALCULATION OF INCOME

INTRODUCTION

The purpose of this instruction is to clarify policy and provide procedural guide-lines for the calculation of income for service pension assessment and overpayment purposes.

BACKGROUND

2.The need for clarification of existing policy/procedures has been highlighted by the introduction of Prosecution activity which has identified inconsistencies in the way income is assessed for service pension purposes and the way it is assessed for overpayment purposes; and in the apparent lack of uniformity in the calculation of income across the State Offices.

GENERAL PRINCIPLES

3.An overpayment occurs when the amount of service pension paid exceeds the actual entitlement due.  The overpayment only exists where pension entitlement was exceeded as a result of -

• the client's failure to fulfil his/her obligations (failure to notify); or

• misrepresentation by the client - eg false statement of earnings; or

• where loss of eligibility had occurred -eg divorce.

4.The amount overpaid is calculated as follows:

amount of pension paid  minus  actual  pension due

equals

TOTAL OVERPAID AMOUNT

5.When calculating the overpaid amount, the only factor which should be investigated is the reason for the overpayment - ie the notifiable event.  All other income/assets should not be investigated.  If however, during the course of the investigation other discrepancies in income and/or assets come to light, these should be taken into consideration in the overall overpayment calculation.

For example, veteran and spouse have a number of investments which produce a total fortnightly income of $100.  They fail to notify the Department that the spouse commenced part time employment with gross earnings of $500 per fortnight.

When calculating the actual entitlement rate, fluctuations in earnings will be taken into account, whilst investment income will continue to be maintained at $100 per fortnight (or whatever rate had been previously held), unless it becomes apparent that investment income had been reduced during the period of the overpayment.

6.Earnings credit should be considered in all cases of employment - ie did the person accrue an earnings credit prior to commencing employment.  Where an earnings credit exists, and earnings received exhaust the earnings credit in a particular fortnight, the reduction in service pension would occur from that fortnight.

For example -

Earnings for the fortnight ending 5/1/95               =               $200

Earnings credit balance                                                              =                   $50

Excess earnings to be held as income in the

assessment of service pension on 5/1/95                            =         $150

(For further information on earnings credit please refer to the relevant chapter in the GOSP).

ISSUES

7.Broadly speaking  guide-lines and policy/procedures need to address the following issues : -

• the methodology to be used in determining the rate of income for service pension assessments

• the methodology to be used in determining the rate of income for overpayment purposes where the obligations -

  • have been met  by the client

  • have not been met by the client

• advising and pensioner obligations -

  • ensuring that clients are provided with clear instructions as to their obligations

  • ensuring that these obligations can be met

• the review strategy to be applied in various employment situations

EFFECTIVE DATES

8.The effective date for a retrospective assessment will depend on whether or not the client had complied with notification provisions under the act, and if the overpayment occurred as a result of a "loss of basic eligibility" or a "change in payability" (ie the rate payable).

9.Sections 56 and 56A of the VEA contain the provisions for automatic termination of service pension where loss of basic eligibility has occurred.

Where the service pensioner has been served with a notice under s54 of the VEA, and a notifiable event has occurred which render him/her ineligible for the pension, and

• the client has complied with s54 notification obligations - service pension is cancelled from the end of the notification period; or

• the client  has not complied with s54 notification obligations - service pension is cancelled from day after the event*

10.Automatic reduction of service pension (ie change in payability) is contained in section 56B of the VEA.   Where a recipient has been served with a notice under s54 of the VEA, and a notifiable event has occurred which causes the person's rate of pension to be reduced and the client  has not complied with s54 notification obligations - service pension is reduced from day after the event*.  (Where the client  has complied with s54 notification obligations, service pension is reduced from current reduction date, or date of determination, and no overpayment exists).

* It should be noted that part pay periods ceased to be payable after 28 December 1989.

INCOME TYPES

11.The following types of income will be addressed in this instruction

i.full and part time employment

ii.casual employment - regular/irregular

iii.contract workers

iv.self employed

v.rental income - full/part time

vi.family trusts/private companies

Full time employment

Calculation of earnings - notification received

12.Client notifies the Department of the commencement of employment and estimated gross earnings.  The effect of these earnings on service pension entitlement will depend on whether or not the client has an earnings credit.

13.Under the earnings credit scheme earnings are excluded from the income test until the total amount of earnings exceed the accrued earnings credit.

The maximum amount of earnings credit accruable to a single pensioner is $1,000.  Couples are able to accrue and utilise their combined earnings credit to a maximum of $2,000.  (Note, an earnings credit can only accrue when a person is in receipt of the maximum rate of service pension).

14.Once a person who has accrued a credit commences remunerative work and the person's fortnightly income exceeds the income free area (IFA):

.no further credit accrues (until income again falls below the IFA);

.the amount of the person's earnings is deducted from the person's credit; and

.pension continues at the same rate until the credit is used up.

15.Once the earnings credit has been used up, actual gross earnings (or the client's estimate) - ie before tax or personal deductions -are held in the service pension assessment from the payday in which the earnings credit was exhausted.  Note, salary or wages includes overtime, penalty rates, incentive payments and other employment related payments.  Review initially after 3 months.  Thereafter, is earnings remain consistent, review annually - ie total 12 monthly earnings averaged out over 26 fortnights and held for the next 12 months.

16.Income tax returns (ITRs) plus Notice of Assessment; or information from an employer should be obtained to verify the current level of earnings.

Retrospective calculation of earnings - notification not received

17.Gross fortnightly earnings  (ie before tax or personal deductions) are held in the assessment from the day after earnings commenced*, (or on the payday in which an earnings credit was exhausted).  The fortnightly rate is calculated based on actual earnings received as per income tax returns or payslips provided by the employer.  Note, salary or wages includes overtime, penalty rates, incentive payments and other employment related payments.  If earnings are based on tax returns, the annual amount received will need to be converted to a fortnightly amount (ie divide total by 26).

Advice requirements

18.The re-assessment advice must clearly show the fortnightly rate of earnings currently being held, the method of calculation and the gross fortnightly amount actually earned.

Notification requirements

19.Client is required to notify the Department if gross earnings increase.

Part time employment

20.The rules governing full time employment would also apply to part time employment.

Casual employment (regular)

Calculation of earnings - notification received

21.As per full-time earnings - ie held on an ongoing basis.  Notification is received of commencing casual employment.  Service pension is re-assessed from the next current reduction date [CRD], (or on the payday in which an

earnings credit was exhausted), holding estimated gross earnings on a fortnightly basis for a period of 3 months.  At the end of this period, pay-slips should be requested to confirm earnings.  If actual earnings have varied, service pension should be re-assessed from the next CRD, holding an average fortnightly rate which has been calculated as follows - total amount earned in the period divided by the number of fortnights in the period.  For the first year review on a regular basis every 3 months.  Thereafter, if earnings remain constant, review annually.  Confirmation of earnings should be sought directly from the employer.

Retrospective calculation of earnings - notification not received

22.Re-assess service pension from the day after commencement of employment, (or from the payday in which an earnings credit was exhausted), holding averaged fortnightly gross earnings on an ongoing basis (as per paragraph 18).

Advice requirements

23.The re-assessment advice must clearly show the fortnightly rate of earnings currently being held, the method of calculation and the gross fortnightly amount actually earned (a sample is at Attachment B).

Notification requirements

24.Client is required to notify the Department if gross earnings increase.

Casual employment (regular - with breaks)

Calculation of earnings - notification received

25.Notification is received of commencing casual employment.  Re-assess service pension holding estimated fortnightly earnings from the next CRD,(or on  the payday in which an earnings credit was exhausted).  Review after 3 months.  If actual earnings have varied, service pension should be re-assessed from the next CRD, holding an average fortnightly rate which has been calculated as follows - total amount earned in the previous 3 monthly period divided by the number of fortnights in the period.  This is regardless of any breaks in employment which may have occurred during the 3 monthly period.  The new average fortnightly earnings are then held for the ensuing 3 months, until the next review.

For example

• estimated fortnightly earnings on 1/1/95 equal $120

• hold for 3 months, review on 1/4/95

• advice actual earnings from 5/1/95 to and including 30/3/95 total $800

• $800 divided by 7 (being number of paydays in the period) equals $114.30 pf

26.For the first year review on a regular basis every 3 months.  Thereafter, if earnings remain constant, review every 12 months using income tax returns (ITRs), group certificates, or pay-slips.

Retrospective calculation of earnings - notification not received

27.Overpayment is calculated from the day after commencement of employment (or from the payday in which an earnings credit was exhausted), and actual earnings averaged over 12 months period as follows - total 12 monthly earnings averaged out over 26 fortnights and held for the next 12 months.

Advice requirements

28.The re-assessment advice must clearly show the fortnightly rate of earnings currently being held, the method of calculation and the gross fortnightly amount actually earned (a sample is at Attachment B).

Notification requirements

29.Client will be required to notify the Department if actual gross earnings exceed the amount listed in the advice - ie the higher amount.  Therefore, in the example above, client would be required to notify the Department if gross actual earnings exceeded $120 per fortnight.

30.Client would also be required to notify if work ceases altogether, at which time service pension would be re-assessed holding NIL for earnings.  Under no circumstances is the amount of earnings averaged over a specified period to be re-calculated, even though the period over which these earnings have been averaged has been reduced.

For example

• client advises earnings from 1/1/94 to and including 31/12/94 were $3000

• averaged out over 26 pays - equals $115.4 pf

• service pension is re-assessed holding  $115.4 pf

• on 1/4/95 client advises employment ceased

• re-assess holding NIL earnings from pay-day after advice

• NO OVERPAYMENT EXISTS even though the fortnightly rate of earnings being held in the assessment was lower than the actual amount earned per fortnight.

Casual employment (irregular)

Calculation of earnings - notification received

31.Notification is received of the commencement of casual irregular employment.  Client is requested to provide an estimate of earnings, which are held in the assessment of service pension from the next CRD (or on  the payday in which an earnings credit was exhausted).

32. Review after 3 months (client will be required to provide pay-slips).  If actual earnings have varied, service pension should be re-assessed from the next CRD, holding an average fortnightly rate which has been calculated as follows - total amount earned in the previous 3 monthly period divided by the number of fortnights in the period.  The new average fortnightly earnings are then held for the ensuing 3 months, until the next review.

33.For the first year review on a regular basis every 3 months.  Thereafter, if earnings remain constant, review every 12 months using income tax returns (ITRs), group certificates, or pay-slips.

Retrospective calculation of earnings - notification not received

34.Where notification of casual irregular employment was not received, a retrospective re-assessment is undertaken.  Date of effect is the day after commencement of employment, (or from the payday in which an earnings credit was exhausted), and income is calculated as follows - actual amount earned is averaged out over period of employment.

35.Under the VEA , assessment of service pension is based on annual income.  Therefore, where the period of employment is less than twelve months, average earnings over the whole period.  However, where the period of employment is greater than twelve months, average earnings for each twelve monthly period, from date earnings commencement.

For example

i.date of commencement 1/1/93, therefore the amount earned in the period 1/1/93 -31/12/93 is converted to a fortnightly amount and held in the re-assessment;

ii.the new amount earned between 1/1/94 and 31/12/94 is converted to a fortnightly rate and held for that period etc

Advice requirements

36.The re-assessment advice must clearly show the fortnightly rate of earnings  held in the assessment and the method of calculation  (as above).

Notification requirements

37.As per notification requirements for casual regular employment.

Contract workers

Calculation of earnings- notification received

38.Contract income is held in the assessment of service pension for the period of the contract.

39. When notification is received that a client  has entered into a contractual agreement a copy of the contract must be obtained to determine the amount to be received and the period of the contract.  The total amount is then averaged out over the period of the contract and held on a fortnightly basis in the assessment of service pension from the CRD, (or on  the payday in which an earnings credit was exhausted).

Example 1

• veteran advises that he has contracted to undertake consultancy work for the period 5/1/95 to and including 13/4/95 for a total payment of $10,000

• service pension is re-assessed from 19/1/95 (being the CRD) and income at the fortnightly rate of $1,250 is held in the assessment until 13/4/95

40.The above averaging rules will apply to all contracts, including those  where payment is in the form of a lump sum payable at the end of the contract period.  Where there is no clear lump sum amount in the contract, the pensioner will be required to provide an estimate.  This is consistent with the treatment of other sources of income such as managed investments and shares, and correctly reflects current legislation.

Retrospective calculation of earnings - notification not received

41.Retrospective re-assessment is undertaken from the day after the date of the contract.  Income to be held in the re-assessment is calculated as above - ie the amount of the contract is held for the period of the contract and converted to a fortnightly rate using the following formula

• total amount of contract divided by number of fortnights in the period of the contract.

Advice requirements

42.The re-assessment advice must clearly show the fortnightly rate of contract income held in the assessment and the method of calculation  (as above).

Notification requirements

43.Client will be required to notify the Department within 21 days of signing a contract or commencing work whichever occurs first.

Self employed

Calculation of income - notification received

44.Notification received that client  has commenced to be self-employed. Estimation of income is required.  This amount is held in the assessment of service pension from the next CRD (or on  the payday in which an earnings credit was exhausted).  Review after 3 months.  Annualize the amount earned

in the previous 3 months period, and hold average fortnightly earnings until the end of the financial year, as follows -

• estimated fortnightly earnings on 1/1/95 equal $130

• hold for 3 months, review on 1/4/95

• advice actual earnings from 1/1/95 to and including 31/3/95 total $800

• annualize - $800 multiplied by 4 equals $3200 per annum

• average out over 26 pays - ie $3200 divided by 26 equals $123.10 pf

• re-assess and hold $123.10 pf until end of financial year ..

45.At the end of the financial year ITRs are requested.  Net income is converted to a fortnightly amount (total amount divided by 26), and held in the assessment of service pension for the next financial year.

Retrospective calculation income - notification not received

46.If notification of income was not received an overpayment exists.  The date of effect is the day after work commenced, (or on  the payday in which an earnings credit was exhausted).  Income to be held is calculated as follows -

• in the 1st financial year - actual income received is converted to a fortnightly amount by dividing total amount by the number of fortnights in that period.

• for the ensuing years - as per tax returns (ie income earned in the previous financial year, is held for the ensuing financial year)

Example

• veteran commenced self-employment on 1/1/95 - no notification received

• overpayment date is 2/1/95

• actual income received from 1/1/95 to 30/6/95 is averaged out and held in the assessment for that period

• from 1/7/95 to 30/6/96  income is held as per 1994/95 ITRs etc

Advice requirements

47.Initial assessment advice must clearly show the fortnightly rate of income held and the method of calculation - ie annual amount converted to a fortnightly rate.

Notification requirements

48.Client is required to notify the Department when income ceases altogether. Following receipt of such advice, the fortnightly rate of income is deleted and service pension reassessed.

Self employed - drawing salary

Calculation of earnings - notification received

49. Notification received that client has commenced to be self-employed and is drawing a salary.  Salary would be treated in the same manner as other full time regular earnings - ie fortnightly amount held on an ongoing basis. Fortnightly earnings should be held for a 12 months period and reviewed at the end of the financial year, at the same time as business income is reviewed.

Retrospective calculation income - notification not received

50.If notification of earnings was not received an overpayment exists.  The date of effect is the day after salary commenced to be drawn, (or on  the payday in which an earnings credit was exhausted).  Earnings to be held are calculated as above.

Advice requirements

51.Initial assessment advice must clearly show the fortnightly rate of earnings held.

Notification requirements

52.Client is required to notify the Department when salary is increased or ceases altogether.  Following receipt of such advice, the fortnightly rate of earnings is updated or deleted altogether and service pension reassessed.

Rental income (full time)

Calculation of income - notification received

53.Client advises has commenced to receive rental income.  Service pension is re-assessed from the next CRD, holding 2/3 of the gross rental amount (ie 1/3 is allowed for deductions such as maintenance etc).  At the end of the financial year ITRs are requested.  Net income is converted to a fortnightly amount (total amount divided by 26), and held in the assessment of service pension for the next financial year.  Thereafter, review at the end of each financial year using ITRs and Notice of Assessment.

Retrospective calculation of income - notification not received

54.Overpayment calculated as per above - date of effect is the day after rental commenced.

Advice requirements

55.Client must be advised of the current fortnightly rate of rental income being held in the assessment of service pension, the methodology used in calculating the net amount, and the gross amount used in the calculation.

Notification requirements

56.Client must be advised that notification is required when actual gross rental - ie the amount of rental being paid - varies.

Rental income (part  time)

Calculation of income - notification received

57.Income received from properties which are rented on a part-time basis should be assessed in the same manner as full time rentals, if rental is constant - for example a holiday home which is rented every weekend.  In this instance the amount of rental  received in the first 12 months period is averaged out (total divided by 26), and the fortnightly amount held for the next 12 months, as per ITRs.

58.Were rental is seasonal, for example a Ski Lodge which is rented for a specific period, total net rent received for the period is are averaged out over the period of rental, and held in the assessment of service pension for an ensuing period.

For example

• a ski lodge is rented for 2 months (4 pays) at a gross rental of $3,000

• net rental after expenses totals $2,000

• this is averaged out over period of rental - ie $2,000 divided by 4 pays equals $500 pf

• $500 pf is held in the assessment of service pension for the next 4 pays

Retrospective calculation of income - notification not received

59.Overpayment is calculated as above - date of effect being day after rental commenced.

Advice requirements

60.Client must be advised of the current fortnightly rate of rental income being held in the assessment of service pension, and the methodology used in calculating the net amount - ie gross rental reduced by 1/3 and averaged out over a 12 months period, or the period of rental (whichever applies).

Notification requirements

61.Client must be advised that notification is required when actual gross rental, ie the amount of rental being paid, varies.

Family trusts/private companies

Calculation of income - notification received

62. Notification received that client  has commenced to receive income from a family trust or private company.  Estimation of income is required.  This amount is held for the first fortnight and followed up at the end of that period.  If changed, rate of income amended and service pension reassessed.  No overpayment exists.   If client is unable to provide an estimation, statements of income should be requested from the client's account after 3 or 6 months.  Where information about income is not available until the end of the financial year when ITRs have been completed, the client must be made aware of the requirement to notify the Department as soon this information is to hand.

63.At the end of the financial year, ITRs are requested.  Net income is converted to a fortnightly amount (total amount divided by 26) and held in the assessment of service pension for the next financial year.

Retrospective calculation income - notification not received

64.If notification of income was not received an overpayment exists.  The date of effect is the day after the trust or company commenced to distribute income.

65.Income to be held is calculated as follows.

• in the 1st financial year - actual income received or income which is receivable *, is converted to a fortnightly amount by dividing total amount by the number of fortnights in that period

• for the ensuing years - as per tax returns (ie income earned in the previous financial year, is held for the ensuing financial year)

* Note - this covers situations where a client elects to forego income to which he/she is entitled.

Advice requirements

66.Initial assessment advice must clearly show the fortnightly rate of income held and the method of calculation - ie annual amount converted to a fortnightly rate.

Notification requirements

67.Client is required to provide full ITRs each year (both personal and trust/company, including all attachments such as profit and loss statements, balance sheets etc will be required).  Notification will also be required when income ceases altogether.  Following receipt of such advice, the fortnightly rate of income is deleted and service pension reassessed.  However, should the trust or company continue to operate, ITRs will continue to be required on a yearly basis for review of distribution of income and asset purposes.

OVERPAID ASSETS

General

68.An overpayment of assets can only exist because of failure to notify of

the acquisition of a  new asset, or the disposal of an old one.  No overpayment exists purely because the value of an existing asset has increased (unless the pensioner is income tested and current assets increase above the pensioner's prescribed assets limit).  This is in line with current legislation, and reflects the original Cabinet Decision on the introduction of the assets test, which did not allow for asset tested pensioners to be required to re-value their own assets.

New Asset Acquired - notification received

69.Client advises of a new asset.  Hold estimated value and re-assess service pension from the next CRD.  If the asset is a property (eg real estate, farm etc), were appropriate, submit immediately for valuation, and re-assess from the first CRD available after receipt of the valuation, holding the new value.  Thereafter, the property is valued in accordance with Australian Valuation Office guidelines - ie each November for application on AFA threshold adjustment date.

Example

• property acquired in October 1992 - value as per client's estimate

• re-valuation undertaken in November 1992 and service pension re-assessed from the next CRD

• new value held to and including 30/6/94; re-valuation undertaken in November 1993.

New Asset Acquired - no notification received

70.Overpayment is raised from date of acquisition.  Asset valued and amount held in the assessment of service pension until next AFA adjustment date.  Re-assessment occurs as above - ie re-valuation occurs each November, and new value held from the subsequent AFA adjustment dates.

CONTACT OFFICERS

71.The information contained in this instruction seeks to provide the policy and guide-lines on the calculation of income, and in particular income derived from earnings.  Further information about the investigation, calculation and recovery of debt is contained in the Overpayment Management Manual (OMM) which is currently being revised.  Should you have any queries specific to the items discussed above, please contact Freda Widawski on telephone (02) 2137487.

DAVID MACKRELL

DIVISION HEAD

COMPENSATION

ATTACHMENT A

DEFINITIONS OF VARIOUS TYPES OF EMPLOYMENT

Full time employment

working on a regular basis, each day, for a number of days per week, (usually five), for a set number of hours per day (eg 7 to 8)

Example - a full time mechanic

Part time employment

working on a regular basis, for a number of days per week (for example 2 days) for a set number of hours per day (for example 4 to 5)

Example - administrative officer working every Monday and Tuesday, for 9 hours per day

Casual employment (regular)

similar to part time, but could be less regular, (for example 2 to 3 hours every week, but on different days).  Unlike permanent part time, salary is only for the actual hours worked and does not include sick leave or recreational leave.

Example -  cleaner working every Friday, for 2 to 3 hours

Casual employment (regular - with breaks)

as casual employment (regular) but with clear breaks

Example -  traffic warden working usually 5 days per week, 2 to 3 hours per day, but only during school term

Casual employment (irregular)

no arrangement exists for hours/days of work (for example may work 5 consecutive days, at 7 hours each day, and then not be employed for

weeks)

Example - a temporary stenographer, or a gardener who is hired intermittently

Contract workers

contracted to undertake a special task, to be completed within a specified period

Example -  a computer programmer hired to develop certain programs during a 3 monthly period

Attachment B1

SAMPLE SUGGESTED ADVICE - CASUAL EARNINGS

<e>>

<s>>

<n>>  <e>>  <e>>

<e>>

YOUR FILE NUMBER IS N <o>>

Dear <n>>

VARIATION TO YOUR PENSION AND/OR ALLOWANCE

This letter is to advise you of a change to your pension assessment.

Thank you for your letter about your <s>>, and/or <t>>.

Payment Details

The amount of pension you receive will be varied from <e>>.  Payment will be made at the rate shown below.

This amount will be credited each fortnight to account number <o>>, in the name of <e>> at the <k>>.

Your Income and Assets

Your service pension is based on your or (and your spouse's combined) income and assets as previously listed .  You presently receive a service pension under the income test.

Earnings

For service pension purposes, your gross earnings of <t>> from <r>> have been converted to a fortnightly amount of <t>> by dividing the total amount you earned in the last <s>> by the number of fortnights in that period.

Your Right of Review

If you do not agree with a decision affecting your rate of service pension, 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 decided 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.

Your Obligations to the Department

Your obligations have been explained to you in previous advices.  These obligations still apply, however, in addition you must tell the Department within 21 days if your actual gross fortnightly earnings go above the amount you previously advised - that is go above <t>>.

You are also obliged by law to tell us if your combined assets increase above <t>>.  This will ensure that your pension is paid at the correct rate.

If your (combined) income reduces any increase in pension can only be made from the first pension payday after your new details are received by us.  Therefore you should tell the Department as soon as possible if you cease work altogether.

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.

Your sincerely

<k>>

for Deputy Commissioner

Attachment B2

SAMPLE SUGGESTED ADVICE - CONTRACT WORKER

<e>>

<s>>

<n>>  <e>>  <e>>

<e>>

YOUR FILE NUMBER IS N <o>>

Dear <n>>

VARIATION TO YOUR PENSION AND/OR ALLOWANCE

This letter is to advise you of a change to your pension assessment.

Thank you for your letter about your contract income from  <r>>.

Payment Details

The amount of pension you receive will be varied from <e>>.  Payment will be made at the rate shown below.

This amount will be credited each fortnight to account number <o>>, in the name of <e>> at the <k>>.

Your Income and Assets

Your service pension is based on your or (and your spouse's combined) income and assets as previously listed .  You presently receive a service pension under the income test.

Earnings

For service pension purposes, the income of <t>>you will receive from your contractual agreement with <r>> has been converted to a fortnightly amount of <t>> by dividing the total amount of the contract by the number of fortnights in the period of the contract.  This income will form part of your service pension assessment until <e>> being the payday after your contract expires.

Your Right of Review

If you do not agree with a decision affecting your rate of service pension, 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 decided 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.

Your Obligations to the Department

Your obligations have been explained to you in previous advices.  These obligations still apply, however, in addition you must tell the Department within 21 days if the contract amount varies.

You are also obliged by law to tell us if your combined assets increase above <t>>.  This will ensure that your pension is paid at the correct rate.

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.

Your sincerely

<k>>

for Deputy Commissioner