DATE OF ISSUE: 10 April 1990
BRITISH RETIREMENT INCOME (BRI) - EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING
The Veteran's Entitlements Act has been amended by the insertion of a new Division 1AA regulating the Conversion of Foreign Currency. The new legislation takes effect from the pension payday 19 April 1990. Processing for the variation of pension rates has been completed.
Effective Date
2.On payday 19 April 1990 the current exchange rate will change from 1 Pound Sterling equals $A2.22 to 1 Pound Sterling equals $A2.13, being the average of the "on demand airmail buying rate" for the month of March.
New Arrangements
3.The new legislation specifies the following:
.Variations will take place on the Statutory Increase dates and the mid points between them unless — There has been a 10% change in the rate over 10 working days. Then we have six weeks to apply the variation;
.The rate used will be the average of the "on demand airmail buying rate" for the calendar month after the last increase;
.Commission will stipulate to which foreign currencies the new Division will apply. Pounds Sterling is the only currency on the list at this time.
4.The dates for the first 13 scheduled exercises are shown at Attachment A. It is important to know that the rate we calculate will be different from the rate DSS will calculate in six of the thirteen exercises, including the current exercise. The DVA rate is more generous than the DSS rate so there should be little impact at your office.
Time Table
5.The various computer runs necessary for this exercise have been made on 5 April 1990.
Automatic Superannuation Processing
6.The programs for adjusting the exchange rate to be applied to BRI cases have been re-written to allow more flexibility and ease of use. Cases with actions in "IN" or "RI" status have not been processed.
7.The amount recorded as super type 08 or 09 will be varied by applying a conversion factor which is calculated as follows:
new exchange rate=$2.13=0.9595
old exchange rate$2.22
8.The amount in $A of income recorded as super-type 08 or 09 will be multiplied by the conversion factor to give the new rate of super. Pension will then be reassessed accordingly.
Regulation 45A Procedures
9.The Assistant Secretary of both Benefits Planning and Management and Corporate Development Branches at Central Office will test the programs used and attest to the correctness of the new exchange rate. Certificates in the terms of Finance Regulation 45A will be forwarded to the "Authorising Officer" in your Finance Branch.
Advices
10.The usual pension payment computer advice letters will be automatically produced for all cases where a variation in pension occurs. The variation advice reason will be "Exchange Rate and General Increase". The advices will be forwarded direct to your Branch from the NCC with the usual daily outputs.
Other Foreign Currencies
11.Other foreign currencies will be added to the list for automatic notional exchange rate variation in the near future. However, until that time income in those currencies should be processed in-line with existing procedures using the exchange rates published daily. If appropriate, the income is to be recorded on the specific super code for the currency.
Contact Officer
11.The contact officer at Central Office for this exercise will be Ric Moore who can be contacted on telephone (06) 282-5494.
JIM DALTON
ASSISTANT SECRETARY
BENEFITS PLANNING & MANAGEMENT
ATTACHMENT "A"
THE DATES ON WHICH THE FOREIGN CURRENCY EXCHANGE RATE IS TO BE VARIED.
THE AVERAGE EXCHANGE — IS USED TO VARY — ON PAYDAY:
RATE FOR:THE PENSION
MARCH 1990 — 19 APRIL 1990 *
MAY 1990 — 2 JULY 1990
AUGUST 1990 — 20 SEPTEMBER 1990
OCTOBER 1990 — 27 DECEMBER 1990
JANUARY 1991 — 21 MARCH 1991 *
APRIL 1991 — 27 JUNE 1991
JULY 1991 — 3 OCTOBER 1991 *
NOVEMBER 1991 — 9 JANUARY 1992 *
FEBRUARY 1992 — 2 APRIL 1992
MAY 1992 — 9 JULY 1992 *
AUGUST 1992 — 1 OCTOBER 1992
OCTOBER 1992 — 7 JANUARY 1993
FEBRUARY 1993 — 1 APRIL 1993 *
APRIL 1993 — 8 JULY 1993
* Dates when the DSS rate will differ from the DVA rate.