DATE OF ISSUE: 27 DECEMBER 1990

AMENDMENTS TO INCOME TESTING OF SUPERANNUATION PENSIONS AND INCOME/ASSET TESTING OF IMMEDIATE ANNUITIES UNDER THE VEA - POLICY UPDATE

INTRODUCTION

The purpose of this instruction is to address policy issues which have arisen during the implementation of the above changes, and to amend Departmental Instruction B21/90 [3] where required.

RELEVANT NUMBER

2.The relevant number is the length of time in years that the annuity or the superannuation pension will be payable.  Annuities may be for a fixed term (eg 15 years), for life or in some cases for both, whilst superannuation pensions are for life.

3.Where payments are for life the Australian Taxation Office (ATO) calculates the relevant number using Australian Life Expectancy Tables.

4.Where the payee is married, and it is clear that the superannuation or annuity payments will revert to the surviving spouse after death of the payee, the greater of the two life expectancies is treated by ATO as the relevant number (Taxation Ruling No.  IT 2157, paragraph 27 refers).

5.In most cases the superannuation fund or life office will be able to provide the relevant number.  However, where this information has not been provided, but all other information is available (i.e.  the UPP amount, date of commencement of pension etc) DVA will calculate the relevant number in the same manner as ATO, using Life Tables as per the Australian Master Tax Guide (Attachment A refers).

Using the life tables

Step 1 -Determine the date the superannuation pension commenced, and choose the relevant set of tables.

Step 2 -Calculate person's age in whole years at the time the superannuation pension commenced.

Step 3 -Go down the first column until you find the person's age at the time the superannuation pension became payable.

Step 4 -Move across to the column covering the date on which the person's superannuation pension commenced.  This will show two life expectation factors, one for males the other for females.

Step 5 -Select the appropriate life expectation factor having regard to the person's sex.  This is the Relevant Number.

REMEMBER for a married couple use the life expectancy of the person who is likely to live the longest - e.g if a veteran commences to receive a superannuation pension at age 60 and his wife is 55, use 55 (female) as the age factor.

6.Some annuities may have a fixed term and be also payable for life or lives.  In this case, the greatest number of the one or more life expectancies, and the fixed term is to be used as the relevant number.

ACTION UPON DEATH

7.Paragraph 39 of B21/90 [3] stated that the deductible amount (DA) applicable prior to death will be transferred to the surviving spouse.  This needs to be clarified as follows.

8.Consistent with ATO's approach, the deductible amount will be transferred only for superannuation pensions or immediate annuities which became payable on/or after 1 July 1983.

10.This is because, superannuation pensions and immediate annuities which became payable prior to 1 July 1983, were subject to Sec 26AA of the Assessment Act which is summarised in the Australian Master Tax Guide as follows -

"contributions towards a pension by any person other than the recipient are not to be taken into account in calculating its undeducted purchase price." (paras 11-290 refer).

11.As the survivor would not have contributed to the scheme or annuity, he/she is not entitled to the deduction.

12.Conversely, superannuation pensions and immediate annuities purchased on or after 1 July 1989 are subject to Sec 27H which states -

"any contributions for which no deduction was allowable may be included in the undeducted purchase price even if not made by the taxpayer.  This means that if the purchased annuity is derived successively by two or more persons, the allowance for the undeducted purchase price will not be lost on the death of the person who made the contributions or paid the purchase price " (paras 11-300 refer).

Joint Annuities

13.In the case of joint annuities, ATO calculates the DA as follows - total annuity x the person's relevant share (eg each partner's share may be 50%).              Where the annuity is transferred to the surving partner upon death, his or her share is 100%.  The Departments of Veterans' Affairs and Social Security (DSS) will be following the same approach - ie DA will be re-calculated using joint NAPP.  In other words, the DA which will be applied to the survivor, will be the combined DA applicable prior to death.

ENTRY FEES

14.Entry fees paid in respect of an immediate annuity will be included in the purchase price for NAPP purposes (ie in the calculation of DA).  This is consistent with the approach taken by ATO and DSS.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

ATTACHMENT A

LIFE EXPECTANCY TABLES

1946 - 48 Tables for super/annuity commencing on or prior to 30/6/58

AGE — MALE — FEMALE — AGE — MALE — FEMALE

55 — 18.84 — 22.04 — 66 — 11.68 — 13.74

56 — 18.11 — 21.24 — 67 — 11.12 — 13.06

57 — 17.40 — 20.44 — 68 — 10.58 — 12.40

58 — 16.71 — 19.65 — 69 — 10.06 — 11.76

59 — 16.02 — 18.88 — 70 — 9.55 — 11.14

60 — 15.36 — 18.11 — 71 — 9.05 — 10.53

61 — 14.70 — 17.35 — 72 — 8.57 — 9.95

62 — 14.06 — 16.61 — 73 — 8.10 — 9.39

63 — 13.44 — 15.87 — 74 — 7.66 — 8.85

64 — 12.84 — 15.15 — 75 — 7.23 — 8.32

65 — 12.25 — 14.44

1953 - 55 Tables for super/annuity commencing 1/7/58 to 19/4/72

55 — 19.00 — 22.81 — 66 — 11.74 — 14.31

56 — 18.26 — 21.99 — 67 — 11.18 — 13.61

57 — 17.54 — 21.18 — 68 — 10.63 — 12.93

58 — 16.84 — 20.37 — 69 — 10.10 — 12.27

59 — 16.15 — 19.57 — 70 — 9.59 — 11.62

60 — 15.47 — 18.78 — 71 — 9.11 — 11.00

61 — 14.81 — 18.01 — 72 — 8.63 — 10.39

62 — 14.17 — 17.24 — 73 — 8.17 — 9.80

63 — 13.54 — 16.49 — 74 — 7.74 — 9.23

64 — 12.93 — 15.75 — 75 — 7.33 — 8.69

65 — 12.33 — 15.02

1960 - 62 Tables for super/annuity commencing 20/4/72 to 26/5/75.

55 — 19.18 — 23.63 — 66 — 11.90 — 14.95

56 — 18.43 — 22.79 — 67 — 11.34 — 14.24

57 — 17.70 — 21.96 — 68 — 10.80 — 13.54

58 — 16.90 — 21.13 — 69 — 10.28 — 12.86

59 — 16.90 — 20.32 — 70 — 9.77 — 12.19

60 — 15.60 — 19.51 — 71 — 9.27 — 11.54

61 — 14.94 — 18.27 — 72 — 8.80 — 10.92

62 — 14.29 — 17.94 — 73 — 8.34 — 10.31

63 — 13.67 — 17.17 — 74 — 7.90 — 9.72

64 — 13.06 — 16.42 — 75 — 7.47 — 9.16

65 — 12.47 — 15.68

1965 - 67 Tables for super/annuity commencing 27/5/75 to 30/6/83

AGE — MALE — FEMALE — AGE — MALE — FEMALE

55 — 18.83 — 23.58 — 66 — 11.60 — 14.97

56 — 18.08 — 22.75 — 67 — 11.05 — 14.26

57 — 17.35 — 21.93 — 68 — 10.52 — 13.56

58 — 16.64 — 21.12 — 69 — 10.01 — 12.89

59 — 15.95 — 20.31 — 70 — 9.52 — 12.23

60 — 15.27 — 19.52 — 71 — 9.05 — 11.59

61 — 14.61 — 18.73 — 72 — 8.59 — 10.97

62 — 13.97 — 17.95 — 73 — 8.15 — 10.37

63 — 13.35 — 17.19 — 74 — 7.73 — 9.78

64 — 12.74 — 16.43 — 75 — 7.33 — 9.22

65 — 12.16 — 15.70

1975 - 77 Tables for super/annuity commencing 1/7/83 to 31/8/88

30 — 42.18 — 48.26 — 53 — 21.62 — 26.91

31 — 41.24 — 47.29 — 54 — 20.83 — 26.04

32 — 40.29 — 46.62 — 55 — 20.06 — 25.19

33 — 39.35 — 45.35 — 56 — 19.30 — 24.34

34 — 38.40 — 44.39 — 57 — 18.55 — 23.51

35 — 37.46 — 43.43 — 58 — 17.82 — 22.68

36 — 36.52 — 42.47 — 59 — 17.10 — 21.85

37 — 35.59 — 41.51 — 60 — 16.40 — 21.04

38 — 34.66 — 40.56 — 61 — 15.71 — 20.24

39 — 33.73 — 39.61 — 62 — 15.04 — 19.45

40 — 32.81 — 38.67 — 63 — 14.39 — 18.66

41 — 31.90 — 37.73 — 64 — 13.75 — 17.89

42 — 30.99 — 36.79 — 65 — 13.13 — 17.13

43 — 30.09 — 35.87 — 66 — 12.53 — 16.38

44 — 29.20 — 34.94 — 67 — 11.95 — 15.65

45 — 28.32 — 34.04 — 68 — 11.38 — 14.93

46 — 27.44 — 33.11 — 69 — 10.84 — 14.22

47 — 26.58 — 32.31 — 70 — 10.31 — 13.52

48 — 25.73 — 31.31 — 71 — 9.79 — 12.84

49 — 24.88 — 30.42 — 72 — 9.30 — 12.18

50 — 24.05 — 29.53 — 73 — 8.82 — 11.53

51 — 23.23 — 28.65 — 74 — 8.35 — 10.90

52 — 22.42 — 27.77 — 75 — 7.91 — 10.29

1980 - 82 Tables for super/annuity commencing on or after 1/9/88

AGE — MALE — FEMALE — AGE — MALE — FEMALE

30 — 43.51 — 49.67 — 53 — 22.63 — 28.02

31 — 42.56 — 48.70 — 54 — 21.82 — 27.14

32 — 41.61 — 47.72 — 55 — 21.02 — 26.27

33 — 40.67 — 46.75 — 56 — 20.24 — 25.40

34 — 39.72 — 45.78 — 57 — 19.47 — 24.55

35 — 38.77 — 44.81 — 58 — 18.71 — 23.70

36 — 37.82 — 43.84 — 59 — 17.96 — 22.85

37 — 36.88 — 42.88 — 60 — 17.23 — 22.02

38 — 35.94 — 41.91 — 61 — 16.52 — 21.20

39 — 35.00 — 40.95 — 62 — 15.81 — 20.38

40 — 34.07 — 40.00 — 63 — 15.13 — 19.58

41 — 33.14 — 39.05 — 64 — 14.46 — 18.78

42 — 32.20 — 38.10 — 65 — 13.80 — 18.00

43 — 31.30 — 37.16 — 66 — 13.17 — 17.22

44 — 30.39 — 36.22 — 67 — 12.55 — 16.46

45 — 29.49 — 35.28 — 68 — 11.95 — 15.72

46 — 28.60 — 34.36 — 69 — 11.37 — 14.98

47 — 27.71 — 33.43 — 70 — 10.81 — 14.26

48 — 26.84 — 32.52 — 71 — 10.27 — 13.56

49 — 25.98 — 31.66 — 72 — 9.75 — 12.87

50 — 25.12 — 30.70 — 73 — 9.25 — 12.19

51 — 24.28 — 29.80 — 74 — 8.77 — 11.53

52 — 23.45 — 28.91 — 75 — 8.31 — 10.89

DATE OF ISSUE:14 DECEMBER 1990

VETERANS' CHILDREN EDUCATION SCHEME (VCES) INCREASE IN RATES FOR 1991

The rates of education allowance and the formula for income testing of allowances payable under the VCES have been approved for 1991.

The Education Allowances for 1991 are set out in Attachment A.  These have been aligned with the corresponding rates under the Assistance to Isolated Children (AIC) Scheme and AUSTUDY.

The level of allowable personal income for students over 16 years has increased from $3,000 in 1990 to $4,000 for 1991.  As before, income above this level will result in a reduction in Education Allowance payable of $1 for each $2 earned.  Details are in Attachment B.

PHARMACEUTICAL SUPPLEMENT

VCES students who are eligible for DTEC (Dependant Treatment Entitlement Card), and as a result for Pharmaceutical Supplement, will have an additional payment of $5 per fortnight from 1 November 1990.

This payment is not an increase to VCES rates and will be indexed annually in September to align with the indexation of the patient contribution fee for pharmaceuticals.

These approved rates and formula will apply to all eligible students for the calendar year commencing 1 January 1991.

If you have any queries, please do not hesitate to contact Georgina Denney on (06) 289 6451.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS PROGRAM

DECEMBER 1990

DATE OF ISSUE:  16 DECEMBER 1990

STATUTORY PENSION INCREASES EDUCATION ALLOWANCE AND ORPHAN'S PENSION FROM 10 JANUARY 1991 - ADP PROCEDURES

Introduction

1.The rates of the allowances paid to children in the Veterans' Children Education Scheme (VCES) have been reviewed and adjusted to bring them into alignment with rates in the AUSTUDY or ABSEC schemes.  The annual indexation increase in Orphans Pensions, and the VCES adjustment will be effective from 10 January 1991.

2.The new rates for Orphans Pensions will be:

Double Orphan rate$103.00 per fortnight

Single Orphan rate$ 51.50 per fortnight

3.Children paid under their own suffix without an adult also in payment are outside the scope of PIPS and  can't be increased in the same manner as other Pensions.

4.A separate instruction has been prepared for the APC and Guardian's Allowance increase from the same effective date.

5.Processing will be divided into cases updated automatically, and cases requiring manual action.

6.Replacement ADP Pension Payments Code Book and Rates Charts will be produced and distributed separately.

PROCESSING

Automatic Cases

7.Where possible, rates will be increased automatically by program RSPYAL05.

Manual Cases

8.Manual cases will be listed on action schedules with all PMF segments shown at pre-increase rates.  Manual action will comprise entering the new rate in the "new fortnightly" column and where necessary, amending the pension category and/or code of the relevant segment.

9.Any cases with pension codes which became invalid following the Pension Payments conversion run (24-25 November) will require manual action to eliminate the joint/miscellaneous codes involved.

10.Care must be taken when performing output examining checks, to ensure that the Education Allowance increase transaction has not deleted a one-time adjustment, applied to the Payment Master File between the commencement of pay-period 40 and the manual update.

Suspensions

11.  Should any records contain a suspension (category 71) action will be required as follows after the runs on 15-16 December:

.Increase the suspension component to the new rate and continue EA, if this has already been increased by the automatic runs.

.Increase the suspension component and EA if this has not been increased by the automatic runs.

Punching of Transactions from Action Schedules

Pay Period

12.The pay period of the effective date (40) should be entered for both cheque and direct credit payees.  The day within pay period field may be left blank.

Keyfast Batch Description

13.Manual transactions should be transmitted under the usual Pension Payment KEYFAST Code of $PENSIO by cutoff for payday 10 January 1991.

Parameter Cards

14.Listings of the parameter cards used in processing these increases are attached.  These listings should be checked by an officer of your Branch to ensure that they are correct before processing commences.

NCC Implications

15.This exercise is scheduled for 15/16 December 1990 in conjunction with the Statutory Pension Increase - Additional Pension for Children and Guardians Allowance exercise.  Any automatic advice produced will be a "short" advice.  Benefits Applications Section will provide direct to the NCC the schedule for these exercises.

Contact Officer

16.  Should you have any difficulties with the exercise or find any discrepancies in the parameter cards please notify GLENYS BULTERS, telephone (06) 289 6019.  The after hours contact officer is KEN STEWART telephone (06) 282 4794.

JIM DALTON

ASSISTANT SECRETARY

PLANNING AND MANAGEMENT

DATE OF ISSUE:  05 DECEMBER 1990

STATUTORY PENSION INCREASES:  ADDITIONAL PENSION FOR CHILDREN AND GUARDIANS ALLOWANCE FROM 10 JANUARY 1991 - ADP PROCEDURES

INTRODUCTION

1.Additional Pension for Children (APC) and Guardians Allowance (GA) are indexed and increased from the first payday of each year.  The rate of APC is linked to the rate of Family Allowance and to the maximum married service pension rate.  The next increase will be effective from 10 January 1991.

2.The rate of the allowances paid to children in the Veterans' Children Education Scheme (VCES) and Orphan's Pensions have also been reviewed.  A separate instruction relating to procedures to effect these increases has been prepared and will be published separately.

3.The trial assessment module with the new rates will be available from Monday, 10 December 1990.  The new rates of APC and GA will be:

Additional Pension for Children

each child under 13 yrs$48.30 increased to $53.00

each child aged 13-15 yrs$70.50 increased to $77.30

each non-prescribed child$34.00 (no change)

Guardian's Allowance$25.80 increased to $27.80

GENERAL OPERATIONAL OUTLINE

4.The processing for pension rate changes will be divided into cases which will be processed automatically, and cases requiring manual action.

5.Replacement ADP Pension Payments Code Book and Rates Charts will be produced and distributed separately.

SPECIAL FEATURES AND SUGGESTIONS

PMF Update/On-line System

6.Processing will be undertaken over the weekend 15-16 December.  THE LATEST AVAILABLE PMF UPDATE WILL BE FRIDAY 14 December, at 5 PM SYDNEY TIME (for WA only 7 PM).  The Pension Processing system (PIPS) and the Pension Payment update facility will not be available during the weekend.

Pre Increase Action

7.It is suggested that the following steps be taken (IN RELATION TO THE CASES AFFECTED BY THE CHANGE) to increase the number of cases that are increased automatically

.Minimise the number of cases in "frozen" status (SB or PY status).

.Arrange an early cut-off (say one week) for processing of cases requiring MS submissions to allow time for those cases to be received and actioned by Pension Payments.

.Resolve any SP Compare reconciliation edits.

.Arrange a cut-off date one or two days before automatic processing commences for final auto matic authorities to Pension Payments.

Limitation Cases

8.Cases for which limitations are in force will have the pension increased automatically, but the limitation amount will not be adjusted.  Identification of limitation cases and adjustment to the limitation amount must be arranged locally.

Miscellaneous/Joint Cases

9.Any cases where a miscellaneous or joint pension code remains (ie this has not been removed following the PPSR Phase 1 conversion) will not be actioned automatically.  These cases will be listed for manual action.  The manual action must involve removal of the miscellaneous or joint code, and separation of any joint payment, in addition to the SI action.

PENSION RATE CHANGES - PENSION PROCESSING

Processing of automatic cases - 15-16 December 1990

10.Program APPBAL will generate Pension Payment transactions updating the rates of service pension and allowances for "selected" cases recorded on the CDB with an automatic method of assessment by:

.Obtaining personal assessment information from the CDB.

.Reassessing the service pension and APC using the new APC and GA rates and elements of assessment.

.Generating transactions for update of the PMF in respect of rate variations.  APPBAL does not update the effective date, so that on display of the case, the previous effective date will be shown (ie not 10 January 1991).

Outputs From Program APPBAL

11.A schedule of cases processed automatically will be produced.  Other cases which cannot be processed automatically (and which are affected) will be reported on schedules for manual action.  The manual schedules will give the reason each case is listed for manual action.

12.Other schedules which may be produced (if any relevant cases occur) are:

.Last SI not processed.

.Old SI process codes deleted.

.Manual arrears cases.

.Data base errors detected.

.Transaction generation error schedule.

Processing of Manual Cases: 17 December to cut-off for payday 10 January 1991.

13.The processing of manual cases should be done in the above period.  Cases are to be processed on a PIPS action record, using the new APC/GA rates and a D2650 or a D408 or other coding sheet produced to effect the PMF variation.  If manual coding is done on an action schedule (rather than a D408/coding sheet), the consecutive number for the PIPS action should be noted on the schedule.

Frozen Actions

14.When cases in 'PY' or 'SB' status are encountered by APPBAL, update is prohibited because the record is 'frozen'.  These cases need to be 'unfrozen' and re-processed as follows:

.Return case to 'RI' status (by using 'Cancel Determi nation' and 'Cancel Submission' as appropriate).

.Re-process case using the SI as the last variation (if effective date is prior to the SI date enter arrears line for effective date).

.Submit to 'MS' or 'DA' as appropriate and prepare D408 in 'MS' cases.

.Determine case as per normal.

PMF/CDB incompatible cases

15.Cases will need to be investigated to determine the cause of the discrepancy, then the CDB or PMF corrected as necessary before the SI action can be processed.

Manual Methods of Assessment

16.Cases need to be manually re-assessed and processed through the system as normal.  Where a case involves a suspension or a manual DP component, it should be processed through an MS submission and a D408 raised to record the manual coding.

Cases Suspended on the PMF

17.Where a service pension, "Other" or Total suspension occurs on the PMF, the SP rate and suspension rate should be re-assessed, the case processed through an 'MS' submission and the rates varied as necessary.  This schedule is produced in 'PMF transaction' format and should be used to code the adjustments.  The schedules should be endorsed with the 'MS' consecutive number generated by the system, and be signed by the Delegate - this obviates the need to prepare a D408 for these cases.

INFORMATION/SUPPLEMENTARY PROCESSING SCHEDULES

18.A number of conditions may exist on the CDB which require additional investigation beyond the normal SI processing.  The cases listed will already have been processed or will appear for manual action on the schedules.  The conditions are detailed below:

Last SI Not Processed

19.The case should have been processed in a previous A/L but was not.  The last SI date on the CDB can be used to determine the last successful SI processed.

Old SI Process Codes Deleted

20.Before any SI processing takes place, any old SI process code (S183) and super or delete fringe benefit codes will be deleted.  Action on these will depend on the reason the old process exists, but most will not require any corrective action.

Manual Arrears Cases

21.Cases where the current effective date is in advance of the pension increase date.  These cases need to be examined to ensure that any adjustment for the period between the increase date and the current effective date is made.

Data Base Error Detected

22.These cases will 'fail' update processing, and should be referred immediately to ADP for action.

Transaction Generation Errors

23.The equivalent of Interface errors in normal daily production.  Corrective action is the same as for Interface errors.

Note: The cases listed above will only be those cases affected by the APC/GA changes and not all cases on the system.

24.Service pension cases submitted to 'MS' should be transmitted to the computer centre via the normal pension payment daily stream with KEYFAST code $PENSIO.

NCC Implications

25.Cut off for Payday 39 (27 December 1990) is 14 December 1990.  This exercise is scheduled for 15/16 December 1990 as part of the normal fortnightly reassessment program $PPBFORT.  The automatic advice produced will be a "short" advice.  Benefits Applications Section will provide direct to the NCC the schedule for this exercise.

Contact Officers

26.The contact officer for this exercise is GLENYS BULTERS telephone (06) 289 6019.  The after hours contact officer is KEN STEWART telephone (06) 282 4794.

JIM DALTON

ASSISTANT SECRETARY

PLANNING & MANAGEMENT

DATE OF ISSUE:  19 NOVEMBER 1990

BRITISH RETIREMENT INCOME (BRI) EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING

Introduction

1.We recently issued Departmental Instruction B41/90 [8] in which we advised the new notional exchange rate for British Retirement Income would be $2.4081 effective from payday 38 (13 December 1990).  Processing of this exercise is scheduled for Thursday, 22 November 1990.

2.To bring our notional exchange rate in line with the Department of Social Security's rate, we have decided to change our rate to One Pound Sterling equals $A2.4010 being the "on demand airmail buying rate" for the month of October 1990.

Automatic Superannuation Processing

3.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=$2.4010=1.0617

old exchange rate=$2.2615

4.The amount in $A of income recorded as British Retirement Income superannuation type 08 or 09 will be multiplied by the conversion factor to give the new rate of superannuation.  The Pension amount will then be reassessed accordingly.

NOTE:  Please refer to Departmental Instruction B41/90 [8] for aNy other information required in relation to this processing.

Contact Officer

5.The contact officer at Central Office for this exercise will be GLENYS BULTERS telephone (06) 289 6019.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

DATE OF ISSUE:  13 NOVEMBER 1990

PAYMENT OF GARP FORM FEES

1.The Repatriation Commission has recently approved an increase in the GARP form fee from $6.00 to $6.60.  The increase will take account of comparable increases in Medical Benefits Schedule items since July 1988.

2.The increased cost for GARP forms should be met within the current allocation for Medical Examinations.

3.The consultation component of the GARP fee is unchanged and is to continue to be paid at the current Medical Benefits Schedule fee according to whether it was a standard, long or prolonged consultation.

4.This Departmental Instruction is to take effect from 15 November 1990.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

DATE OF ISSUE: 14 NOVEMBER 1990

FUNERAL BONDS - EXEMPTION UNDER INCOME AND ASSETS TEST

INTRODUCTION

The purpose of this instruction is to advise of an interim policy to be applied when assessing the impact of Funeral Bonds under the income and assets tests pending formal legislative amendments.

BACKGROUND

2.Current legislation limits exemption under the assets test to pre-paid funerals s50(1)(a)(viii).  Due to a range of new products coming onto the market, the Department of Social Security (DSS) has sought to extend the exemption to certain of these products under both the income and asset test.

3.We understand that DSS amending legislation will now be put forward in the Autumn 1991 sittings.  The Repatriation Commission has recently approved similar amendments for the VEA for the same sitting.

4.The Department of Social Security has authorised its staff to exempt certain products that fit a specified criteria.  To ensure that veterans are not disadvantaged DVA will apply the same exemptions as DSS.

CHANGES

5.The criteria to be applied to exemptions are:

.Contributions for any one person must not exceed $5,000 in total.  A married couple with a joint bond can contribute $5,000 jointly.  If individual bonds are purchased, then $5,000 each can be contributed.

.Thebond must be in the name of the individuals and must be clearly identified on the contract as being for the sole purpose of paying for the funeral costs.

.The bond must not be able to be surrendered or transferred by the person during his or her lifetime.

6.It will be necessary for IPO's to liaise with DSS to ensure a consistent approach is maintained.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

DATE OF ISSUE:  09 NOVEMBER 1990

BRITISH RETIREMENT INCOME (BRI) EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING

Introduction

In line with the amendments to the Veteran's Entitlements Act Division 1AA concerning the regulating of Foreign Currency, a variation to pension rates is to be implemented.  The Legislation also states the currency rate will be expressed to four decimal places.  However on the pensioner advices the currency rate will be expressed in dollars and cents.  No rounding to the nearest cent will take place.

Effective Date

2.On payday 13 December 1990 the current exchange rate will change from 1 Pound Sterling equals $A2.615 to 1 Pound Sterling equals $A2.4081, being the average of the "on demand airmail buying rate" for the month of October1990.

Timetable

3.The various computer runs necessary for this exercise have been included in the fortnightly processing scheduled for Thursday 22 November 1990.

Automatic Superannuation Processing

4.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=$2.4081              =              1.0648 old exchange rate

$2.2615

5.The amount in $A of income recorded as British Retirement Income 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.

Manual Listings

6.Cases with actions in "SB" or "PY" status will not be processed.  These cases will be listed on the manual case listing for follow up action, and CMS/PIPS cases will be created automatically for Branch Office procesing.

Regulation 45A Procedures

7.The Assistant Secretary of both Benefits Planning and Management and Corporate Development Branches at Central Office will attest to the correctness of the new exchange rate and the programs used to conduct the exercise.  Certificates in the terms of Finance Regulation 45A will be forwarded to the "Authorising Officer" in your Finance Branch.

Output

8.The pensioner advice letters together with the schedule which identifies cases with fringe benefit changes will be forwarded direct to your Branch from the NCC with the usual daily outputs.

Contact Officer

11.  The contact officer at Central Office for this exercise will be GLENYS BULTERS telephone (06) 289 6019.

DAVID HOLLAWAY

ACTING ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

DATE OF ISSUE:  01 NOVEMBER 1990

PHARMACEUTICAL SUPPLEMENTS

Introduction

The purpose of this instruction is to advise of changes to Pharmaceutical Benefits and to introduce the new pharmaceutical supplement.  These changes are contained in the Social Welfare (Pharmaceutical Benefits) Amendment Bill 1990, which has not yet received Royal Assent.

Background

2.Currently, those pensioners that hold the following cards are entitled to free pharmaceuticals listed under the Pharmaceutical Benefits Scheme (National Health List):

.Service Pension Benefits Card (SPBC)

.Dependant Treatment Entitlement Card (DTEC)

.Pensioner Health Benefits Card (PHB)

3.Pensioners in receipt of a Specific Treatment Entitlement Card (STEC) receive pharmaceuticals related to their accepted disabilities free of charge under the Repatriation Pharmaceutical Benefits Scheme (RPBS).

4.Pensioners in receipt of a Personal Treatment Entitlement Card (PTEC) receive all pharmaceuticals (listed under the National Health Scheme) through the RPBS free of charge.

5.Pensioners in receipt of a Pharmaceutical Benefits Concession Card (PBC) must pay $2.50 per prescription item under the Pharmaceutical Benefits Scheme.

Changes

6.As a result of the changes to the Pharmaceutical Benefits Scheme, (which were developed by the Departments of Community Services and Health, Social Security and Veterans' Affairs) from 1 November 1990, there will be a basic charge of $2.50 for each prescription item.  This will be charged to all service pensioners who use their SPBC or PHB card and to all War Widows and orphans who use their DTEC to obtain pharmaceuticals, as well as to service pensioners who currently pay $2.50 (PBC holders).

7.Pensioners using their STEC and PTEC to obtain pharmaceuticals will still receive these free of charge if obtained under the RPBS.

Pharmaceutical Supplement

8.Commencing on payday 1 November 1990 an allowance, to be known as a Pharmaceutical Supplement, will be paid to:

.Service pensioners who are not a "prescribed person", ie.  who are in receipt of fringe benefits (s.82 of VEA refers);

.War widows (s.86(1) and (2) of VEA refers);

.Orphans (s.86(3) of VEA refers).

9.The pharmaceutical supplement will be paid at the following rates:

.married service pension couple$2.50 pf each

.standard rate veteran$5.00 pf

.unmarried person, eg. wife-widow, separated

or divorced spouse$5.00 pf

.war widow$5.00 pf

.orphan$5.00 pf

.war widow remarried to a service

pension veteran who has fringe$7.50 pf  benefits

($5.00 to her $2.50 to him)

.married service pension couple assessed as

separated medically$5.00 pf each

.war widow with orphan children$5.00 pf + extra

$5.00 for each orphan child

Post 21 March 1991

10.From payday 21 March 1991, the pharmaceutical supplement will be called the pharmaceutical allowance.  It will be paid at the same rates as the supplement and will be indexed.  The first indexation of the allowance will be at the same time as the September Statutory increase.  In addition the payment will be extended to include those service pensioners who were not eligible to receive the supplement.

Safety Net

11.During the period from 1 November 1990 to 31 December 1991 (a period of 14 months), the maximum that any one pensioner or family unit will have to pay for pharmaceuticals is $150 - or the equivalent of 60 prescription items.  Therefore, the 61st and subsequent prescription items will be issued free of charge.

12.In the following calendar year, ie. from 1 January 1992 till 31 December 1992, the maximum amount that any one family unit will have to pay is $130.  This is the equivalent of 52 prescription items, therefore the 53rd and subsequent items will be issued free of charge.

"Chronically ill"

13.This term is a loose expression which has been used to categorise a section of the pensioner population that may require large quantities of pharmaceuticals at one time.  It is intended to assist these people to meet such costs by allowing their pharmaceutical allowance to be paid in advance in the form of several small lump sums instead of a fortnightly amount.

14.The legislation refers to these pensioners as "Advance Pensioner A" and "Advance Pensioner B".

"Advance Pensioner A" - Initial Advance

15.Any pensioner who is an eligible pensioner, ie. a service pensioner in receipt of maximum rate SP or a war widow, as at 1 November 1990, will receive their pharmaceutical supplement in the form of a lump sum.

16.The initial lump sum advance payable on 1 November 1990 will be $25 or $50 (whichever applies), covering the period 10 paydays from 1 November 1990 to and including payday 7 March 1991.  This is equivalent to 10 payments at $2.50 or $5.00 (paragraph 10 of this instruction refers).

"Advance Pensioner A - Further Advances

17.A pensioner may apply to receive a further advance supplement of $17.50 or $35 (depending upon the rate applicable, ie.  single or married rate as per paragraph 10 in this instruction).  To be eligible, the "Advance Pensioner A" must have:

.purchased a minimum of 20 pharmaceutical items (equivalent of one per week) for him/herself, spouse,  or dependants during the period 1 November 1990 to 21 March 1991;

.liquid assets of no more than $1000; and

.income, apart from pension, of no more than  $20 per fortnight.

18.If the "Advance Pensioner A" has purchased a minimum of 14 prescription items for him/herself, spouse, or dependants within 3 months of having applied for the advance mentioned in paragraph 17 and still meets the same income and asset criteria, then the pensioner can apply for a further advance pharmaceutical supplement of $17.50 or $35.

19.Within 3 months of applying for this second $17.50 or $35 advance, if the pensioner still satisfies the criteria listed above, then the pensioner can apply for a final advance of $17.50 or $35.

20.The maximum amount that may be paid as an advance is the same as for those receiving the fortnightly pharmaceutical supplement/allowance.  This actually totals $155 (single) instead of $150 (being the safety net amount).  This is because the safety net limit was set by the Department of Social Security, but DVA has one more payday during the period from 1 November 1990 to 31 December 1991.

21.Comparison of supplement received fortnightly and supplement received in advance is:

FORTNIGHTLY.

- Period 1.11.90 to and including payday 7.03.91 = 10 paydays @ $5.00 pf

$ 50

- Period 21.03.91 to and including payday 26.12.91 = 21 paydays @ $5.00 pf              $105

TOTAL SUPPLEMENT$155

ADVANCE

- Initial advance$50

- Subsequent advances $35

$35

$35

TOTAL SUPPLEMENT$155

"Advance Pensioner B" - Initial Advance"

22.An "Advance Pensioner B" is a pensioner who becomes eligible for fringe benefits, or is granted a service pension (with fringe benefits), a war widows' pension, or an orphan's pension after 1 November 1990, but before 1 January 1992.  This class of pensioner is not entitled to receive the initial $25 or $50 lump sum pharmaceutical supplement.

23.This pensioner can apply for an advance pharmaceutical supplement of $17.50 or $35.00 (depending on the applicable rate) if he or she has paid for a minimum of 14 prescription items during the 3 months immediately prior to the day on which he or she became an eligible pensioner

"Advance Pensioner B" - Further Advances

24.The criteria for this category of pensioner to receive further advances is exactly the same as for "Advance Pensioner A".  The only difference is in the amount of each advance that the "Advance Pensioner B" can receive.  The initial advance is $17.50 or $35, with a maximum of two subsequent advances of the same amount and a final advance of $22.50 or $45, a total maximum of $150, as opposed to the maximum of $155 paid to "Advance Pensioner A".  This is due to the fact that these pensioners were not eligible on 1 November 1990, but rather, at the earliest from the payday following.  Of course this maximum reduces the later the pensioner becomes eligible e.g. if a single pensioner becomes eligible on payday 24 January 1991, then an initial advance of $35 could be paid, followed by further advances of $35, $35 and $15.

25.Those pensioners classified as "Advance Pensioner A" and "B" are the only ones who may receive their pharmaceutical supplement in the form of a lump sum and only when requested (apart from the initial advance paid to "Advance Pensioner A").  Orphans, and service pensioners who receive pension at less than the maximum rate, but who are eligible for fringe benefits, will be paid their pharmaceutical supplement fortnightly.

Fortnightly Pharmaceutical Supplement, OR Advance Supplement

26.The fortnightly pharmaceutical supplement is not payable during any period covered by a lump sum advance pharmaceutical supplement.  For example:

Single veteran is granted maximum rate service pension payday 29 November 1990 and on that date is paid an advance of $35.  ($35 divided by $5.00 pf = 7 paydays)

This advance therefore covers the period from 29.11.90 to and including payday 21.02.91, during which time, a fortnightly pharmaceutical supplement is not to be paid.

Pensioner close to Safety Net amount

27.Where a pensioner qualifies to receive an advance pharmaceutical supplement, but the amount of the supplement is greater than the amount the pensioner must pay for pharmaceuticals before reaching the safety net limit (ie. no longer having to pay for pharmaceuticals), then the full advance will not be paid.

EXAMPLE:

Single veteran has already purchased, since 1.11.90, a total of 50 prescription items, which cost him $125.

The veteran advises the Department that he requires a further advance as he has "purchased" another 14 prescription items and he satisfies the income and asset criteria.

The veteran will not receive the full $35 advance.  Instead, this will be reduced by the number of prescriptions the veteran would have received free of charge:

maximum annual supplement/allowance$155.00

less amount spent to date$125.00

Available advance$ 30.00

Therefore, the $35 advance is reduced by $5, so only $30 is paid to the veteran as his advance pharmaceutical supplement.

Maximum Benefit

28.The total amount to be paid to an advance pensioner by way of both advance and fortnightly pharmaceutical supplements, before 1 January 1992, is not to exceed $155 if single, or $77.50 if married (paragraph 10 in this instruction refers).

29.Where there is a change in marital status, the amount of advance pharmaceutical supplement to be paid will be the rate applicable at the time of claiming the advance.

30.Any fortnightly pharmaceutical supplement will be altered on the same payday as the pension rate and assessment change.  If an advance at the higher rate when the assessment changes (ie the pensioner gets married just after receiving a $35.00 advance) the "overpayment" is not recoverable.  The married rate pension would be reduced by $2.50 per fortnight for seven paydays.

Other Procedures

31.Procedures will be developed in conjunction with the Pharmacy Guild in relation to the documentation and recording of how many prescription items are purchased by pensioners.  These will be finalised before implementation on 1 November 1990 and staff will be advised in a Departmental Instruction.  This Departmental Instruction will also set out the detailed procedures required by Branch Office staff once the policy is implemented.

Advices

32.All pensioners including disability pensioners will receive a letter from the Department advising of these new arrangements and how they affect different groups of pensioners.  These letters are being developed in conjunction with the Health Program and the majority should be received by the pensioners in the week ending 26 October 1990.  Branch Office staff will be given examples of the letters to assist when answering queries from pensioners and for use in new grants and fringe benefit 'ons'.  In addition, suitable automatic payment advices are also being developed.

Legislation

33.The relevant legislation was passed in the House of Representatives on 20 September 1990, although the Bills will require some minor interpretative changes, which will be made in a subsequent amending Bill.  The Bills passed through the Senate on 18 October 1990 and should receive Royal Assent in early November.

Systems

34.The payment run for the lump sum advances to maximum rate service pensioners and war widows, and the fortnightly supplement to less than maximum rate service pensioners with fringe benefits, and orphans was conducted on the 18 & 19 October 1990.  The initial lump sum advances are identified on the Client Record Summary (CR) screen, a new field of PHARM ALLOW ELIG: has been created and a YES in the response field indicates that the lump sum has been paid.  The fortnightly supplement payments will be identified by the 65 category code on the PMF.  In addition, each state will be sent a payment schedule to assist with enquiries.  An example of the schedule format is at Attachment A.

35.Any new grants or fringe benefit 'ons' from the 15 October 1990 will require manual coding on a General Purpose Coding Sheet (D5534).  The Category Code will be 65, pension codes will be as follows;

CLIENTPAYMENT CODEAMOUNT

* Single — 2900$5.00

Married — 2901$2.50

Joint Married — 2902$5.00

Joint — 2903 — less than or

equal to $10.00

Joint Child — 2904 — less than or

equal to $50.00

* single payment code can be used in married assessments  where the single rate of supplement is being  paid ie; separated medical and service pension  wife widows.

Replacement code book pages will be issued in conjunction with the implementation of Phase 1 of the Pension Payments Rationalisation in November 1990.

35.Where a pensioner has been in receipt of pharmaceutical supplement and pension has been cancelled, the case is to be processed as follows:

(a)if the action being processed is deleting the Payment Master File (PMF) record completely (transfer out of death), the 65 category code will be deleted by the automatic transaction,

(b)if the transaction is not deleting the full PMF record (eg; sp is being cancelled and DP is continuing)  a manual coding sheet must be prepared to remove the 65 category code.

A manual coding sheet must also be prepared to remove the pharmaceutical supplement category from the PMF if an action is processed to remove fringe benefit eligibility for a service pensioner.

36.Phase 2 of the pharmaceutical systems changes will be operational on Monday, 5 November 1990, at the latest.  Phase 2 will include new screens to record the payment of advances and detail the limitation of the fortnightly supplement when an advance has been paid.

37.Phase 3 of the systems changes will be operational before 21 March 1991 and will cover the ongoing payment of the supplement (the General Pension Increase).

38.A Departmental Instruction covering Phase 2, the operation of the pharmaceutical system, access to the system and coding will be issued as soon as development and testing have been completed.  This will be prior to 1 November 1990.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR BENEFITS

DATE OF ISSUE:  23 OCTOBER 1990

PRINTING AND DESPATCH OF BULK ISSUE 1991 PENSIONER CONCESSION  CARDS AND TELEPHONE RENTAL CONCESSION VOUCHERS ADP PROCEDURES

1.0INTRODUCTION

1.1 — The printing of bulk issues of 1991 Pensioner Health Benefits (PHB)/Transport Concession (TC1) cards, Pharmaceutical Benefits Concession (PBC) cards, and Telephone Rental Concession (TRC) vouchers will start on the weekend 10/11 November 1990 and should be completed by Friday 16 November 1990.  Current planning calls for material to be despatched to clients by the end of November.

1.2 — Branch Offices have agreed that:

bulk issues of material will be amalgamated for each household and despatched centrally,

and that the centralised mailing part of the project will be managed by the PD&I Section of Income Support Branch, Central Office.

1.3 — There has been a considerable amount of work done through the year to rectify problems that have plagued these issues in previous years.  In particular, the "Bulk Card and TRC Voucher Issue" process has been reworked and we are confident that the earlier problems have been eliminated.  These improvements should reduce the number of enquiries normally received after bulk issues.

1.4Health NumberThis year the Health Number usually printed on the PHB and PBC will be replaced by our file number only.  This means that the file number will appear twice on each card, so that Pharmacists are not confused.  Pharmacists are to use the DVA file number for transactions to the Health Insurance Commission.  This change has been requested by the Health Insurance Commission.

2.0PRINTING OF CARDS AND SCHEDULES

2.1 — The National Computer Centre (NCC) will start to print concession cards and schedules of listings over the weekend 10-11 November 1990 and the schedules should arrive in Branch Offices on Monday 12 November 1990.  However, processing for the new Pharmaceutical Supplement may take place on this weekend also.  This may delay printing of the reports and schedules.  Printed concession cards will be sent directly to the selected mailing house for despatch to pensioners.

2.2 — The following listings for concession cards will be produced in alphabetical order and, where appropriate, with a composite split (headings on reports will be descriptive):

2.2.1 — PHB/TC1 cards issued;

2.2.2 — PBC/VA1 cards issued;

2.2.3 — beneficiaries who receive PHB cards and who have been included with your State run but are paid by another State (the paying State will be indicated by N, V, Q, S, W or T)

2.2.4 — beneficiaries who do not receive any card, together with a brief explanation of why they did not receive a card (e.g. too many characters in the address).

2.3 — There will be no listings of TRC vouchers issued as the on-line inquiry screen (TC.IQ) will give the necessary details.

2.4 — TRC vouchers will be printed separately by a printing/mailing house.  TRC vouchers will be despatched directly to pensioners.

2.5 — Concession cards are now issued to the address maintained in the CDB.  For example, a NSW postcode will produce a NSW PHB card regardless of the paying State.  For this reason the need to make a manual issue of cards in border town cases should not occur.

Note:As you are aware, some of the information contained in the CBD is  incorrect  (e.g. incorrect address or beneficiary has died) .  We expect that some cards or vouchers will be returned to the Department for this reason.  It is important that where this occurs we should endeavour to rectify the error.  When the correct information has been collected, would you please arrange for the CDB to be updated as soon as possible.

2.6 — From 12 November 1990, the NCC will print all daily automatic issues on 1991 concession cards.  Pensioners becoming eligible for fringe benefits from 12 November 1990 will require 1990 concession cards to be issued manually over the period to 31 December 1990.

Note:  1990 PHB cards do not reflect (in the fine print on the back) the new Pharmaceutical Benefits Scheme changes.  This is not expected to generate many enquiries.

2.7 — Clients becoming eligible for the Telephone Rental Concession in the period to December do not need a TRC voucher for that period.  A 1991 voucher can be used when paying a 1990 account.  In this case, the client will have received vouchers for 1992 before the fourth account is due late in 1991.

3.0BLANK CONCESSION CARDS FOR MANUAL ISSUE

3.1 — Branch Offices can obtain a supply of blank concession cards from the NCC early in December 1990 for manual issues.  The consecutive numbers of blank cards received from the NCC are to be recorded and subsequent manual issues recorded.

4.0SPECIAL REGISTER AND OVERSEAS CASES

4.1 — Concession cards for Special Registers will be reclaimed by the NCC after printing and sent to relevant Branch Offices for despatch.

4.2 — Concession cards for clients handled by a Trust Office will be reclaimed by the NCC after printing and sent to relevant Branch Offices for despatch to Trust Offices.

4.3 — Pensioners living or travelling overseas are not entitled to pensioner health benefits or pharmaceutical benefits and are not to be issued with either concession card while outside Australia.  Pensioners living overseas who return to Australia are entitled to benefits for which they qualify and the appropriate card is to be issued manually.  Pensioners travelling overseas for a short holiday are not required to return concession cards.

5.0DATE OF EFFECT ON AUTOMATICALLY GENERATED CARDS

5.1 — The date of effect, 1 January 1991, will be printed only on cards produced automatically at the time of bulk issue, the date will be shown as 01/01/91.  Cards issued manually at the time of the bulk issue are also to show the date of effect as 01/01/91.  The TRC voucher does not carry an effective date.

6.0FREE RAIL TRAVEL VOUCHERS - NEW SOUTH WALES AND QUEENSLAND PENSIONERS

6.1 — Free rail travel vouchers are now sent by this Department to pensioners living in NEW SOUTH WALES and QUEENSLAND, the vouchers form part of the composite PHB/TC1 card.

6.2 — Where a pensioner is granted or becomes eligible for "Fringe Benefits" subsequent to bulk issue, a complete set of cards, including the rail vouchers, is to be issued.

6.3 — If a NEW SOUTH WALES pensioner seeks a replacement issue of either the PHB or the TC1 component of the concession card, replacement rail vouchers will be issued up to 28 February 1991.  From 1 March 1991 replacement cards generated by the ADP on-line system will have the rail voucher component over-printed with the word "CANCELLED".  All "CANCELLED" rail vouchers are to be detached from the set and are not to be issued to the pensioner.  In these circumstances the client is to be directed to the State Rail Authority for issue of replacement vouchers.

6.4 — If a QUEENSLAND pensioner seeks a replacement issue of either the PHB or TC1 component of the concession card, replacement rail vouchers ARE to be issued.

6.5 — New grants, reviews and/or transfers-in with entitlement to fringe benefits will NOT have the rail voucher component cancelled by the ADP system as pensioners are entitled to the free vouchers in these circumstances.  In any case where the pensioner is known to have transferred-in or has been granted fringe benefits more than once in a year, more than two travel vouchers should not be issued.

7.0DESPATCH OF BULK ISSUES OF CONCESSION CARDS AND TRC VOUCHERS (including War Widow's Travel Cards N, V, S)

7.1 — The despatch of bulk issues of 1991 concession cards and TRC vouchers will be managed by Central Office.

7.2 — Contact officers for this part of the exercise are Ces White on (06) 289 6684 or Jonathan Levy on (06) 289 6426.

8.0ADP SYSTEM PROBLEMS AND CONTACT OFFICERS

8.1 — Notification of major ADP system problems should be made as an OIM system request providing specific details of the cases involved.

8.2 — Any other immediate problems should be notified by telephone to Glenys Bulters (06) 289 6019.

JIM DALTON

ASSISTANT SECRETARY

PLANNING & MANAGEMENT

DATE OF ISSUE:  21 SEPTEMBER 1990

VRB DORMANT REGISTER

The Veterans' Review Board has established a Dormant Register as part of its administrative screening process that it started in February 1990 to improve its handling of applications.

2.The Dormant Register is intended to save VRB resources on applications which are not being actively pursued by the applicants.  The Registrar of the VRB can lapse applications and transfer them to the Dormant Register.  The Board will take no further action on these cases.  For a case to be removed from the Dormant Register an applicant would need to lodge a written request to the Registrar setting out reasons for possible re-instatement and evidence that the application is ready for immediate hearing.  The Principal Registrar will decide whether an application is to be removed from the Register.

3.The VRB will advise the Department if an application has been placed on the Dormant Register and if an application has been removed from the Register.  A letter is sent by the Registrar to the applicant when a case is put on the Register (copy attached).  The Registrar will also advise an applicant of the outcome of a request for re-instatement of an application.

4.The operation of the Dormant Register has implications for the recording of VRB cases on the Claims Management System.  The following procedures are to be adopted when a case is placed on the Dormant Register.

Case Placed on Register

(1)VRB advises Branch Office and applicant.

(2)Branch Office staff to set attribute (030) "DORMANT REGISTER" on VRB Case on CMS and note the inside file cover (M or C) with a label "VRB Dormant Register Case".

(3)VRB case to be withdrawn from CMS.

(4)File to be put away.

Case Reinstated (i.e. removed from Register)

(1)VRB advises Branch Office and applicant.

(2)Branch Office registers a new CMS case for the VRB application with case and claim receipt date as the date of the Principal Registrar's decision to remove the case from the Register (which will be notified to the Branch Office).

(3)"Dormant Register" label is removed from inside file cover.

(4)Application to proceed, but no new section 137 report to be prepared.  Case to go into VRB Decision stage.

5.It is expected that there will be few cases put on the Register and, of these, only a small percentage will be reinstated.

6.It is possible that an applicant lodges a claim for the same disability/death which is the subject of the application which was transferred to the Dormant Register.  Branch Office staff need to be careful to ensure that these claims are identified before investigation is started.  Team Leaders/Vetting Officers need to check for this prospect by reference to the label on the file cover or the attribute on CMS.  If a primary level claim has already been registered and classified, it should be withdrawn on CMS.  The applicant should be advised that the new claim is invalid and to contact the VRB concerning the application on the Dormant Register.

7.VRB assessment cases on the Dormant Register have not been finally determined for the purposes of sub-section 15(5) of the Veterans' Entitlements Act.  Accordingly, an application lodged for an increase in pension would not be a valid application if the applicant still has an assessment case on the Dormant Register.  In these circumstances, once again, the applicant should be informed that the application for increase is invalid and to contact the VRB.

8.Similarly, any new application to the VRB received by the Department in respect of a matter covered by a VRB application placed on the Register is invalid and the applicant should be referred to the VRB Registrar.

9.Staff should also be aware that legislation will be introduced to Parliament as announced in the Budget to allow the VRB to "strike out" an application after two years where the applicant is not taking steps to pursue the application to finality.  Instructions on this will be issued at an appropriate time.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

DATE OF ISSUE:  16 OCTOBER 1990

AMNESTY - APPLICATION OF AMNESTY PROVISIONS

This Departmental Instruction has been prepared in response to questions about the legal status of the Amnesty which was in force between 23 August and 2 October 1990, following the announcement on Budget Night.  DVA was not included in the Budget Night Announcement, however the PM approved DVA inclusion on 22/8/90.

2.Legislation was prepared and is contained in the Social Security & Veterans' Affairs Legislation Amendment Bill No 2 (1990).  This Bill has been passed by the House of Representatives and is due to go to the Senate on 10/10/90.  At this stage the earliest date for Royal Assent is 22/10/90.  This Bill will become law on the day of Royal Assent.

3.Processing of applications for amnesty should be undertaken as follows:

a)Pension should be reduced/cancelled from the current reduction day;

b)Pensioner should be advised that pension has been reduced/cancelled, based on the advice received, from payday "date".  New income/asset details and pension rate should be included in the Advice.

4.As there is no legal basis at this time for a delegate to determine that "a person is not indebted to the Commonwealth" if their case fits the provisions of the amnesty, no reference should be made either to amnesty or overpayment in the advice to the pensioner.

5.All cases which require a decision under amnesty should have their pension reduced from the current reduction date and a record should be made of name and file number for all cases.

6.Once the Bill receives Royal Assent, files can be noted where Amnesty applies, and any cases where amnesty is rejected can be processed in the normal way.  There is no requirement for delegation under the Amnesty Section in the legislation. Delegates are required to establish the facts and then grant or reject the case based on the facts as presented.

7.Please note that details of the number of applications received, number of applications accepted and rejected, and average dollar reductions per fortnight, are required for all cases decided under Amnesty.

Felicity Barr

A/g National Program Director (Benefits)

October 1990

DATE OF ISSUE: 06 SEPTEMBER 1990

AMNESTY - FAILURE TO ADVISE CHANGED CIRCUMSTANCES

Overview of the Amnesty

The Government has decided to introduce an extended program of computer data matching to detect cases in which persons, who are receiving income support payments, have not disclosed circumstances that are relevant to determining their eligibility or entitlement.

2.Before this is undertaken, it has been decided to give all current Veterans' Affairs clients who have failed to advise changes in their circumstances affecting eligibility or entitlement the opportunity to set the record straight without penalty.  They will be allowed to do this under an Amnesty which will run from 22 August to 2 October 1990.

3.The Amnesty will be authorised by legislation which will provide that a person who advises the Department of a change in circumstances between 22 August and 2 October 1990 and meets the specified criteria will not be liable to repay any overpayment or to be prosecuted for any offence.  It will not be necessary to calculate, raise, or waive an overpayment because there will be no overpayment under the law.

4.The pension being paid to a person will be cancelled or adjusted as necessary.

Eligibility for the Amnesty

5.The Amnesty may apply to people who are being paid a pension by the Department of Veterans' Affairs and who believe they may no longer be entitled to some or all of that payment because they have not told the Department of a change in their circumstances that could reduce their rate of payment or remove their entitlement altogether.  Such people might be:

.someone who starts a full or part-time job and does not tell the Department:

.a single pensioner who begins to live with a partner and does not tell the Department;

.a person in receipt of remote area allowance who moves out  of the remote area and does not tell the Department;

.a person in receipt of rent assistance who ceases to pay rent and does not tell the Department;

.a person in receipt of additional pension for children in relation to a full-time student 16 or over who does not tell the Department when the student commences work;

.a person in receipt of additional pension for children who does not advise the Department of the death of a child;

.a married couple receiving a pension who are separated by ill-health and who are re-united and do not tell the Department;

.a person who receives a pension and gains income and/or assets from sources other than employment (e.g. a lottery, raffle, etc.) and does not tell the Department;

.a married couple in receipt of a pension who divorce and do not tell the Department;

.a person who is in receipt of a Carer's pension and no longer provides, or is required to provide, constant care and attention to a veteran and fails to notify the Department; and

.a child over the age of 16 yearsa in receipt of an allowance under the Veteran's Children Education Scheme (VCES) who receives income without advising the Department.

6.Only people currently in receipt of a pension from the Department are eligible under the Amnesty.  Former clients are ineligible.  Current clients who have already been notified in writing of overpayments are ineligible in respect of those overpayments but are not disqualified from applying for the Amnesty in relation to situations that have not led to prosecution or written notification of an overpayment.  People who are being paid a pension on 22 August 1990 will be considered to be current for Amnesty purposes.

Exclusions from the Amnesty

7.In general, the Amnesty does not apply to people who are receiving more than they should because they knowingly misrepresented their circumstances when they first applied (see paragraph 11 below).  However, it will apply where the misrepresentation could have arisen as the result of a misunderstanding, for example where a pensioner claims not to have understood the types of income relevant to assessment of their entitlement.

8.Where the Department was already aware of or suspected an overpayment and the pensioner does not contact the Department during the amnesty or before we have advised him/her in writing of the overpayment the amnesty does not apply.

9.If there is any doubt as to whether an applicant misrepresented circumstances when he or she first applied (Amnesty not available) as against subsequently failing to advise a change in circumstances (Amnesty available) the applicant should be given the benefit of the doubt.

10.The Amnesty is not for people who have perpetrated fraud against the Department by claiming single or multiple payments to which they never had any entitlement.  For example:

.a person running multiple claims;

.a person in full-time employment who applies for service pension; or

.a married person living with his or her spouse who applies for single rate.

11.Also excluded are people in receipt of a pension at a rate in excess of the rate to which they are entitled and who initiated an increase in their rate by knowingly misrepresenting their circumstances either when they first applied or at a later date.  An example would be where a person has obtained additional benefit by claiming for non-existent dependent children.

12.Broadly, the following distinction applies:

.the Amnesty is for clients who allowed the Department to continue to pay them at an increased rate by passively misrepresenting their circumstances (i.e., failing to advise a change); and

.it is not for clients who themselves initiated an incorrect payment by actively misrepresenting their circumstances.

13.The Amnesty is not available where the pension was first claimed after the beginning of the Amnesty (i.e., on or after 22 August 1990) or where the change in circumstances which reduces or removes a person's entitlement took place on or after 22 August 1990.  This prevents people from deliberately taking advantage of the Amnesty to get more than their entitlement from the Department.  For example:

.a person in receipt of rent assistance who, on or after 22 August 1990, ceases to pay rent while retaining rent assistance is not eligible; and

.a pensioner who, on or after 22 August 1990, receives additional income (including wages) reducing his or her entitlement but fails to notify is not eligible.

14.Where there is doubt about the date of the event constituting a change of circumstances, the applicant should be given the benefit of the doubt (i.e., the event should be assumed to have taken place before the start of the Amnesty).

15.Persons who were officers or employees of the Departments of Social Security or Veterans' Affairs at the time they failed to advise of a relevant change of circumstances are not eligible under the Amnesty.

16.The Amnesty guidelines should be applied on the basis that the Amnesty legislation will be retrospective. In cases falling within the guidelines no action will be taken in relation to any excess payments.  WHERE THE AMNESTY GUIDELINES ARE SATISFIED IT IS NOT NECESSARY TO CALCULATE, RAISE, WRITE OFF OR WAIVE AN OVERPAYMENT AS NO OVERPAYMENT WILL EXIST UNDER THE LAW.

17.The Amnesty does not apply to claims submitted during or after the Amnesty period.

Decision Making

18.Attachment A is a check list to aid decision makers in determining whether a pensioner qualifies for the amnesty.  This check-list should only be used where a client, between 22 August 1990 and 2 October 1990, advises of a change of circumstances, or of a previously made false or misleading statement, or seeks the application of the amnesty.

Contact Officer

19.The contact officer for inquiries on this matter at Central Office is Jeanette Ricketts, Income Support, phone 06 2896440.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

ATTACHMENT A

AMNESTY DECISION MAKER'S GUIDE

QUESTION — ANSWER — DEPARTMENTAL

(APPLICANT(YES/NO)INSTRUCTION

CIRCUMSTANCES)REFERENCE

1.Was the claim made — YES/no — Para 13

before 22/8/90?

2.Was there a genuine — YES/no — Paras 7,12

entitlement when the claim

was made?

3.Was the applicant — YES/no — Para 6

"current" on 22/8/90?

4.Did the event/change of — YES/no — Para 13

circumstances take place

before 22/8/90?

5.Did the applicantyes/NO — Paras 12-14

actively misrepresent

his/her circumstances to

increase the rate of payment?

6.Was the applicant ayes/NO — Para 15

DVA/DSS officer when the

event/change of circumstances

occurred?

7.Has the applicant beenyes/NO — Para 8

advised in writing of

prosecution or an overpayment?

8.Were there multipleyes/NO — Para 10

claims other than those

allowed by law?

Answer all the questions by circling YES or NO in the answer column.  If all the answers in capitals are circled (ie the YES answers to questions 1-4 and the NO answers to questions 5-8) then the applicant is eligible for the amnesty.  If any of the answers in small typeface is circled the applicant is ineligible.

DATE OF ISSUE:  5 SEPTEMBER 1990

NON WITHDRAWABLE FARROW CORPORATION BUILDING SOCIETY SHARES

The purpose of this instruction is to advise the current application of Commission policy in relation to the  valuation of investment products where trading has been suspended.

2.The policy on asset test valuations normally refers to the current market value which, for managed investments, is taken as the manager's buy back price.  Where trading is suspended, and there is therefore no manager's buy back price, Commission will set a value, in conjunction with the Department of Social Security.  This value will be based on the best available advice to the Commission and Department of Social Security.  The Government appointed administrator of the Farrow Corporation has advised that it is unlikely that holders of non-withdrawable shares in the following Societies will receive  any return on their investment.

Names of non-withdrawable share holdings covered by this Instruction

Pyramid Building Society,

Geelong Building Society, and,

Country Wide Building Society.

3.It is therefore determined that nil asset value is to be applied to those shares until further notice.

Manual Reassessment

4.Those pensioners holding non-withdrawable shares in the Farrow Corporation are to be re-assessed manually with effect from the payday following notification by the pensioner with a maximum backdating of arrears payable from 28 June 1990.  No automatic update run is possible on share listings under PIPS.

5.Obligation advice letters should be sent to all clients whose service pension is re-assessed in line with this policy.Advice given to pensioners should include a request to inform the Department within fourteen days of receipt of any payout in respect of their Farrow Corporation non-withdrawable shares.

6.This instruction only applies to non-withdrawable shares.  Ordinary deposits have been guaranteed by the Victorian Government and should continue to be assessed at full value for asset test purposes.

Contact Officer

7.The contact officer at Central Office for inquiries on this matter is Nigel Parmenter, Income Support, telephone(06) 2896444.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

DATE OF ISSUE: 24 AUGUST 1990

ESTATE MORTGAGE TRUSTS RE-ASSESSMENT OF UNIT ASSET VALUES

The purpose of this instruction is to advise current Commission policy in relation to the asset valuation of investments held in Estate Mortgage Trust Funds.

2.Currently approximately 840 DVA pensioners hold investment units with Estate Mortgage.  Departmental computer records show that 64 of these pensioners are assessed under the Assets Test.

3.The policy on asset test valuations refers to the current market value which, for managed investments, is taken as the manager's buy back price.  As the manager of these funds has suspended trading there is no buy back price available.  However, these units still have a value as there is an expectation of trading resuming sometime in the future.  DSS and DVA have agreed on a unit asset value to be maintained based upon estimates provided by the Macquarie Bank.  The Macquarie Bank's values represent the most likely value achievable in 1993 and have been discounted by an inflation factor of 7% p.a. to reflect a present day value.

Names of the Trusts covered by this Instruction

4.Asset values to be applied to Estate Mortgage Funds until further notice are as follows:

ASSET VALUE PER UNIT

Estate Mortgage Income Trust No. 1 — 0.29c

Estate Mortgage Investment Trust — 0.51c

Estate Mortgage Depositors Trust No. 1 — 0.39c

Estate Mortgage Depositors Trust No. 2 — 0.47c

Estate Mortgage Depositors Trust No. 3 — 0.62c

Estate Mortgage Depositors Trust No. 4 — 0.80c

Manual Reassessment

5.Those pensioners holding these investments are to be re-assessed manually with arrears payable from 23 August 1990.No automatic update run was possible due to ADP system schedules.

6.All staff are reminded that as there is no real market for these products and that the Commission has decided that for the purpose of S55 these assets cannot be realised.  Any individual who continues to be disadvantaged by this assessment can seek relief, subject to other conditions of eligibility, under the Asset Test Hardship Provisions.  These provisions are designed specifically to assist pensioners who have valuable assets which cannot be sold or realised.  Ongoing assessment of income from these trusts should have been suspended with effect from 12 July 1990 as per DI B27/90 [19].

Pensioner Initiated Reviews

7.Pensioners who have written to the Department seeking reassessment of their service pension because of these investments should be reassessed as from the payday after receipt of the written advice, but not prior to 12 July 1990 in respect of income tested pensions and 23 August 1990 for asset tested pensions.

Contact Officer

8.The contact officer at Central Office for inquiries on this matter is Nigel Parmenter, Income Support, telephone(06) 2896444.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

(BENEFITS)

DATE OF ISSUE: 24 AUGUST 1990

FOREIGN EXCHANGE PERIODS FOR THE CALCULATION OF FOREIGN CURRENCY CONVERSION AMOUNTS - (BRI EXCHANGE RATE)

This Departmental Instruction is to correct technical errors contained in the instruction B14/90 [21] issued on 10/04/90.  B14/90 [21] relates to the exchange rate to be used for the calculation of British Retirement Income in Service Pension assessments.

2.The instruction B14/90 [21] contained a table indicating the payday on which a variation to the BRI exchange rate would take place.  The table also shows the month for which the "on demand airmail buying rate" will be averaged to determine that exchange rate.

3.The dates in that table are wrong and must be replaced with the dates contained in the attachments to this instruction.

4.The effect of these errors is that an incorrect exchange rate has been applied from an incorrect payday.  Both errors have been to the advantage of those clients affected.  The average total incorrect payment was about $4.50 and no action will be taken to adjust pensions in respect of these payments.  The period that the incorrect rate was in force was from April to June 1990.  The correct exchange rate has been in force since 12 July 1990.

5.Column A and B on the attachment are the start and end date of a "Foreign Exchange Period" referred to in the definition in Section 35 of the VEA.  Column C is the payday from which payments using the new exchange rate will commence.  Column D is the month of the year referred to in Section 35AC for the calculation of a Base Foreign Exchange Rate, ie the exchange rate to be applied from the payday in Column C.

6.The second attachment is the same information in calendar format.

7.These exercises will continue to be programmed by Central Office with a Departmental Instruction being issued each time.  The Instruction will detail the exchange rate and the date of effect.

Should you require further information the contact officer is Ric Moore (06) 289 6398.

Peter Hawker

National Program Director

Benefits Program

16 August 1990

DATE OF ISSUE:  22 AUGUST 1990

COMPUTER MATCHING - ALL AGENCY IDENTITIES/PROFILES

Introduction

The purpose of this instruction is to explain the requirement  for, and method of, collecting statistical information about Pensioner Initiated cancellations after 21 August 1990.

Background

2.The Budget announcement relating to the collection of Tax File Numbers (TFNs) for the purpose of Computer Matching - All Agency Identities/Profiles may lead to requests from  some of our pensioners to cancel pension payments.

Recording Procedures

3.In order to keep track of any such cancellations and to enable follow up action where applicable, we have created an attribute on CMS using "Pensioner Request Cancel" - attribute number 605 for these cases.  From 22 August 1990 any request by a pensioner to cancel pension payments must be registered on CMS as PIR Classification type and the attribute "Pensioner Request Cancel" set in the Registration/Classification stage.  This is not a mandatory attribute but it is essential that this attribute is set for all pensioner initiated cancellations after 21 August 1990.

Contact Officer

4.The contact officer for inquiries on this matter at Central Office is Jeanette Ricketts, Income Support, phone 06 2896440.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

DATE OF ISSUE:  16 AUGUST 1990

BRITISH RETIREMENT INCOME (BRI) EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING

In line with the amendments to the Veteran's Entitlements Act Division 1AA concerning the regulating of Foreign Currency, a variation to pension rates is to be implemented.  The Legislation also states the currency rate will be expressed to four decimal places.  However on the pensioner advices the currency rate will be expressed in dollars and cents.  No rounding to the nearest cent will take place.

Effective Date

2.On payday 20 September 1990 the current exchange rate will change from 1 Pound Sterling equals $A2.18 to 1 Pound Sterling equals $A2.2615, being the average of the "on demand airmail buying rate" for the month of July 1990.

Timetable

3.The various computer runs necessary for this exercise and the Statutory Pension Increase processing have been scheduled for the weekend of 1/2 September 1990.  These runs will be conducted AFTER the Statutory Increase processing to enable the pensioner advices to contain the correct pension rate and fringe benefit details.  THIS INSTRUCTION MUST BE READ IN CONJUNCTION WITH THE SI INSTRUCTION (B30/90).

Automatic Superannuation Processing

4.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 "SB" or "PY" status will not be processed.

5.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=$2.2615=1.0374

old exchange rate$2.18

6.The amount in $A of income recorded as British Retirement Income 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

7.The Assistant Secretary of both Benefits Planning and Management and Corporate Development Branches at Central Office will attest to the correctness of the new exchange rate and the programs used to conduct the exercise.  Certificates in the terms of Finance Regulation 45A will be forwarded to the "Authorising Officer" in your Finance Branch.

Schedules

8.The schedule which identifies cases with fringe benefit changes, normally produced after BRI processing, will be needed to identify cases requiring manual action.  A matrix of affected cases and the action required is included in the Statutory Increase Departmental Instruction No B30/90 [24].

Impact of Statutory Pension Increase Processing

9.It should be noted that as a result of the SI processing effective from the same payday, there could be duplication of cases where a change has occurred as a result of SI and a further change as a result of the BRI run.

Advices

10.  The advices will be forwarded direct to your Branch from the NCC with the usual daily outputs.  Culling of advices as per the matrix mentioned in paragraph 8 will need to be carried out.

Contact Officer

11.  The contact officer at Central Office for this exercise will be GLENYS BULTERS telephone (06) 289 6019.

DAVID HOLLAWAY

ACTING ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

DATE OF ISSUE: 8 AUGUST 1990

STATUTORY PENSION INCREASE 20 SEPTEMBER 1990 ADP PROCESSING

1.INTRODUCTION

1.1 — Changes for the 20 September 1990 Statutory Increase involve variations to the following pension types:

.Disability Pensions

.War Widows' pensions

.AMS Pensions under (old) Reg. 32, 34, 35AA

.Service Pensions and Allowances, the fringe benefit income limits

.British Retirement Income notional exchange rate (a separate instruction will be issued).

2.GENERAL OPERATIONAL OUTLINE

2.1 — The processing for pension rate changes will be divided into groups of those cases which will be processed automatically and those cases which will require manual action.

2.2 — The ADP and associated Branch Office processing is discussed in the following sections. A broad timetable of events and Scheduling dates are included at Attachment 1.

2.3 — For the "DISABILITY PENSION AND ALLOWANCES PROCESSING" automatic increases to pension rates will be effected where possible using programs which apply the new rates of pension and allowances to the PMF and CDB.

2.4 — For the "SERVICE PENSION PROCESSING" income/assets details and personal assessment particulars held on the CDB will be referenced for the automatic reassessment of pension and preparation of variation transactions for update of the PMF.  Changes to other elements of assessment e.g. increase in the fringe benefits limits, will also be effected automatically.

3.SPECIAL FEATURES AND SUGGESTIONS

3.1Rates Charts

The new rates charts effective 20 September 1990 will be issued shortly.  You will notice on the Service Pensions - Income Test chart that a Taxable Amount for Immediate Annuities effective from 1 July 1990 is now included.

3.2Manual DP Listings

Manual DP cases will be listed on the same weekend as the automatic disability pension and service pension updates.  Manual DP cases require processing through the on-line pension processing system (IDPS/PIPS).  This action cannot be completed until after the cut-off for payday 6 September, AND the new rates are put into production.

3.3Fringe Benefits & Treatment Entitlement Cards

Fringe benefit income limits will increase and it is expected that some pensioners will become eligible for fringe benefits.  Issue of health cards and recall of pharmaceutical cards will be processed through the normal batch system following the SI.

3.4PMF Update/On-line System

Processing will be undertaken over the weekend 1/2 September 1990.  THE LATEST AVAILABLE PMF UPDATE WILL BE FRIDAY 31 AUGUST, at 5.00pm SYDNEY TIME.  Neither the on-line Pension Processing system (IDPS/PIPS) nor the Pension Payment update facility will be available over the weekend.

3.5Pre Increase Action

It is suggested that the following steps be undertaken prior to computer runs for the SI to help processing progress as smoothly as possible:

.minimise the number of cases in "frozen" status (SB or PY status);

.arrange an early cut-off (say one week) for processing of cases requiring "MS" submissions by pension examiners to allow time for those cases to be received and actioned by Pension Payments;

.clear outstanding "MS" cases;

.resolve any SP Compare reconciliation edits;

.arrange a cut-off date one or two days before automatic processing commences for final automatic authorities to Pension Payments;

3.6Trial Assessment Facility/War Pension Code File

The new Trial Assessment facility with the new SI rates and other assessment changes will be available by 20 August 1990.  The War Pension Code File will be available with the new SI rates from 3 September 1990.

3.7Limitation Cases

Cases for which limitations are in force will have pension increased automatically, but the limitation amount will not be adjusted.  Identification of these cases and adjustment to the limitation amount must be arranged locally.

3.8Processing Problems

Should any problems arise with either the automatic processing system or the procedures outlined, they should be advised to Central Office immediately.  The contact officer at Central Office is Glenys Bulters on telephone (06) 289-6019.

3.9PNG Pension Rates (Queensland Only)

The PNG pension rates effective from 20 September are currently unavailable.  These rates will be distributed shortly.

4.PENSION RATE CHANGES - DISABILITY PENSIONS AND/OR ALLOWANCES PROCESSING

FULL RATE CODE WITH LIMITATION

4.1 — Increases to rates of disability pensions and associated allowances, as well as certain AMS pensions and war widows' pensions, will be processed in the following three stages:

.Rates of disability pensions and allowances, war widows' pensions and certain AMS pensions will be increased automatically, except where payment is recorded under a miscellaneous code.

.Cases requiring manual processing will be selected and listed.

.Cases requiring manual processing will be examined and updated through IDPS/PIPS before cut-off for payday 20 September.

4.2Action Schedules

Action schedules of DP and British SI cases requiring manual examination and variation by examiners will be produced for the following action groups:

Group ContentsReference Number

.Composite Cases — 600

.EATS Cases — 500

.Miscellaneous code disability — 400

pension.  Some of these cases

may include an SP component;

but the DP ONLY should be adjusted.

.Miscellaneous  widows'  pension — 300

.Disability pension cases with a — 200

suspension segment and AMS

cases with a suspension segment.

Some of these cases may include

an SP component, but the suspension

and/or DP segments only should be adjusted.

NOTE:A record may belong to more than one group.  Where this happens, the case will normally be listed once with the group of the the highest reference number.

4.3General Procedure for These Manual Adjustments

Action schedules will have all disability pension segments shown at pre-increase rates.  Manual action by examiners will comprise entering the new rate in the "new fortnightly" column and where necessary, amending the pension category and/or code of the relevant segment.  If any component of a DP pension segment is to be adjusted, processing through the Interim DP system (IDPS) will be required.  Processing of the case will be as follows:

.use Classification Pension (CP) to register a payment change action;

.access Assessment Control (AC) to create an action assessment.  No effective date is required for a DP only case;

.update the new disability pension details via the Disability Pension (DP) screen;

.complete Advices (AD) screen;

.submit (SU) the case to MS/5O, write the consecutive number onto the schedule and forward to the Delegate for determination.

.For AMS cases, only update of schedules is required.

4.4Keyfast Description

MS (multiple segment) and manual transactions should be transmitted to the Computer Centre in the normal pension payment daily stream i.e. keyfast description $ PENSIO, prior to the cut-off for payday 20 September.

4.5Parameter Cards

Parameter cards and rate tables have been prepared at Central Office to effect the automatic updating of "DISABILITY PENSION AND ALLOWANCES" cases and list those requiring manual action.  These cards will be input to the computer by Central Office.

5.PENSION RATE CHANGES - SERVICE PENSION PROCESSING

5.1 — The increases to service pension and allowances will be effected automatically on the PMF wherever possible by program APPBAL.  APPBAL will detect cases from the CDB and PMF which cannot be processed automatically, and produce reports and schedules to enable manual reassessment of service pension for subsequent updating of the PMF.  These reports have been improved and rationalised for this exercise.  It is hoped that they will be easier to use.  APPBAL will also generate pension payment transactions for automatically processable cases.  Cases listed for manual action will need to be processed through PIPS before cut-off for payday 20 September.

5.2Processing of automatic cases - 31 August/1 September

Program APPBAL will generate Pension Payment transactions updating the rates of service pension and allowances for cases recorded on the CDB with an automatic method of assessment by:

.obtaining income/asset details and assessment information from the CDB;

.reassessing the service pension and allowances using the new SI rates and elements of assessment; and

.generating transactions for update of the PMF in respect of rate variations, changes in payment category and/or pension code.              APPBAL does not update the effective date, so that on display of the case, the previous effective date will be shown (ie not 20 September 1990).

5.3Outputs From Programs APPBAL

The cases which cannot be processed automatically will be reported on schedules for manual action.  Manual cases are:

.Frozen actions (i.e. cases in 'PY' or 'SB' Status);

.PMF/CDB incompatible cases;

.Manual methods of assessment (excluding Working Rule B);

.Cases suspended on the PMF;

.Manual disability pension cases;

.Assessment errors.

Other schedules which may be produced are:

.Last SI not processed;

.Old SI process codes deleted;

.Manual arrears cases;

.Data base errors detected;

.Transaction generation error schedule.

5.4Processing of manual cases: 3 September to cut-off for payday 20 September 1990.

The processing of manual cases should be done in the above period and cases are to be processed through IDPS/PIPS.  Cases listed for manual action should be reassessed using the SI rates, updated through an action record, a D2650 produced, or a D408 or other coding sheet produced to effect the PMF variation.  If coding is done on an action schedule, the consecutive number for the IDPS/PIPS action should be noted on the schedule.

5.5Frozen Actions - when cases in 'PY' or 'SB' status are encountered by the SI program, update is prohibited because the record is 'frozen'.  The cases need to be 'unfrozen' and re-processed as follows:

.return case to 'RI' status (by using 'Cancel Determination' and 'Cancel Submission' as appropriate)

.re-process case using the SI as the last variation (if effective date is prior to the SI date enter arrears line for effective date)

.submit to 'MS' or 'DA' as appropriate and prepare D408 in 'MS' cases.

.determine case as per normal.

5.6PMF/CDB incompatible cases - cases will need to be investigated to determine the cause of the discrepancy, then the CDB or PMF corrected as necessary before the SI action can be processed.  The discrepancies will normally relate to people/suffixes on the CDB and PMF.

5.7Manual Methods of Assessment - cases need to be manually re-assessed and processed through the system as normal.  Where a case involves a suspension or a manual DP component, it should be processed through an MS submission and a D408 raised to record the manual coding.

5.8Cases Suspended on the PMF - where a service pension, "Other" or Total suspension occurs on the PMF, the SP rate and suspension rate should be re-assessed, the case processed through an 'MS' submission and the rates varied as necessary.  The schedule is produced in 'PMF transaction' format and should be used to code the adjustments.  The schedules should be endorsed with the 'MS' consecutive number generated by the system, and be signed by the Delegate - this obviates the need to prepare a D408 for these cases.

5.9Manual DP Recorded on the CDB - this schedule lists in 'PMF transaction' format cases with the following 'DP codes' on the CDB.

.EATS

.COMP (Composite/Proviso 'c')

.DIV 10 (Members of the Defence Force),

.MAN, MISC, CONVERSION DATA  (Note: these are no longer valid codes, but may still exist if the case has not been correctly coded following Conversion).

The DP should be examined, the new rates entered through the DPEN format, and the case submitted through 'MS'.Rates of both SP and DP should be varied on the schedule.

The schedules should be endorsed with the "MS" consecutive number generated by the system and signed by the Delegate - this obviates the need to produce a D408 for these cases.

5.10Assessment Errors - the assessment routine will produce information messages as an indication that certain action should be taken as a result of the re-assessment. These cases should be examined and modified as necessary, as well as processing the SI increase.

Note -Where "QA" data exists on a case which is processed manually, care should be taken to ensure that the assets data is recorded correctly because the "QA" data will not be copied into the action assessment.

6.INFORMATION/SUPPLEMENTARY PROCESSING SCHEDULES

6.1 — A number of conditions may exist on the CDB which require additional investigation beyond the normal SI processing.  The cases listed will already be "autoprocessed" or will appear for action on the schedules.  The conditions are detailed below:

.Last SI not processed - the case was not processed in the last SI that effected the case.  Check the case to ensure that appropriate A/L or SI action was taken.

.Old SI process codes deleted - before any SI processing takes place, any old SI process code (S183) will be deleted.  Action on these will depend on the reason the old process exists, but most will not require any corrective action.

.Manual arrears cases - cases where the current effective date is in advance of the SI date.  These cases need to be examined to ensure that any adjustment for the period between the SI date and the current effective date is made.

.Data Base Error detected - these cases will 'fail' SI processing, and should be referred immediately to ADP for action.

.Transaction Generation Errors - the equivalent of Interface errors in normal daily production.  Corrective action is the same as for Interface errors.

6.2 — Service pension cases submitted to 'MS' should be transmitted to the computer centre via the normal pension payment daily stream.

7.British Retirement Income Processing

7.1 — A separate instruction will be issued shortly advising the new notional exchange rate.

7.2 — The new Section 37AA of the Legislation requires that a BRI exercise be conducted forthe same effective date as the SI.  As the SI is combined with a BRI exercise some cases will have fringe benefit changes as a result of the SI and further changes as a result of the BRI run.  In certain circumstances, this could invalidate the automatic payment advices and inserts (PHB/PBC cards or TRC vouchers) from both the SI and BRI exercises.  The following matrix gives details on how to action the affected cases:

7.3 — Two additional schedules will be printed to assist in identifying the BRI affected cases.  These schedules will have the following information.

.Schedule A: ALL cases with Fringe Benefit Period of Grace that have British Retirement Income (BRI) before this exercise is commenced.  Details will include file number, name, address and the end date of the Period of Grace.

.Schedule B:  All BRI cases with a change in Fringe Benefits eligibility resulting from the General Service Pension increase.  Details will include file number, name, address and FB eligibility change details.

Note:The usual BRI schedule listing all fringe benefits changes will be p;rinted after both the SI and BRI runs are completed.

7.4 — The following notes will assist in identifying the affected cases as detailed in the above matrix:

Case 1(a) - Not eligible for Fringe Benefits before/after processing

This case will not appear on any schedule.

Case 1(b) - Not eligible for Fringe Benefits before, after processing is now eligible

This case will be listed on schedule B as a FB gain

Case 1(c) - Not eligible for Fringe Benefits before, after processing has FB Period of Grace.

This case will be listed on Schedule B as a FB gain and the normal BRI Fringe Benefit Changes schedule as a FB grace on.

Case 2(a) - Fringe Benefits Period of Grace before, after processing has FB Period of Grace with the same end date.

This case will be listed on Schedule A.  Check that the system shows the "old" period of Grace end date.

Case 2(b) - Fringe Benefits Period of Grace before, after processing has Fringe Benefits with no Period of Grace.

This case will be listed on Schedule A and Schedule B as a FB grace off.

Case 2(c) - Fringe Benefits Period of Grace before, after processing has FB Period of Grace with a different end date.

This case will be listed on Schedule A, on Schedule B as a FB grace off and the normal BRI Fringe Benefit Changes schedule as a FB grace on.

Case 3(a) - Eligible for Fringe Benefits before, after processingis still eligible.

This case will not be listed on any Schedule.

Case 3(b) - Eligible for Fringe Benefits before, after processing has FB Period of Grace.

This case will be listed on the normal BRI Fringe Benefit Changes schedule as a FB grace on.

8.ADVICES

In most cases, processing BRI after the SI rune will ensure the automatic advices have the correct fringe benefit and pension details.  However, culling of the automatic advices and inserts in line with matrix outlined in paragraph 7 will be required.

DAVID HOLLAWAY

ACTING ASSISTANT SECRETARY

PLANNING & MANAGEMENT

ATTACHMENT 1

STATUTORY INCREASE - 20 SEPTEMBER 1990

TIMETABLE OF EVENTS - GENERAL

20 August 1990 — Trial assessment with the new rates will be available.

1 September 1990 — Updating of PMF for disability pension and AMS cases which               can be processed automatically.

1 September 1990 — Reassessment for all CDB records where MOA is               "automatic".

1 September 1990 — Automatic update of service pension segments on the PMF               except for those cases listed in part 5.3 of these procedures.

1 September 1990 — Production of manual schedules for disability pension and               allowances and war widows' requiring examination.

1 September 1990 — Reconciliation run on all variations to either the PMF or               CDB.

From 3 September — Examiner action on manual SP and DP schedules. to cut-off               for payday 20 September 1990.

PLEASE NOTE: BRI EXERCISE MUST BE RUN AFTER THE SI.

PROCESSING SCHEDULE

The Benefits Applications Branch will provide the NCC with a detailed processing schedule.

The Benefits contact officer (for the NCC only) is

RIC MOORE(06) 289 6398 (BH)

(06) 282 3913 (AH)

DATE OF ISSUE:  6 AUGUST 1990

COMPULSORILY PRESERVED SUPERANNUATION

PURPOSE:

1.The purpose of this instruction is to advise staff of changes in assessment procedures for superannuation benefits which are generally retained in super funds, super bonds, approved deposit funds (ADFs) or deferred annuities (DAs).

2.These products, in whole or part, may be subject to compulsorily preserved standards which restrict access to benefits until retirement after attaining 55 years of age.  For pension purposes, all amounts contained within super funds and super bonds are considered to be compulsorily preserved benefits in their entirety.  ADFs and DAs may contain preserved and non-preserved benefits.

ASSESSMENT PROCEDURES:

3.Amendments to Sections 35, 37B and 50(1)(iiic) of the VEA effective from 1 February 1990 have set new rules under the income and assets tests for the assessment of superannuation products according to the age of the person holding such products:

Income Test:From 1 February 1990 the earnings on superannuation benefits which cannot be used until retirement will be disregarded under the income test until attaining "pensionable age" which is defined in Section 35(1) of the Act as 60 years for a male veteran, 55 years for a female veteran, 65 years for any other male and 60 years for any other female. Upon attaining pensionable age, a pensioner is subject to assessment of income from any holdings of superannuation products.  The amount of the income from these products is to be assessed according to the provisions set down for managed investment products.

Assets Test:From 1 February 1990 preserved benefits will be disregarded under the assets test until the person attains pensionable age.  The preserved benefit is then assessed as an asset.

Withdrawal Before Pensionable Age:From 1 February 1990 where a person makes a withdrawal from a preserved benefit prior to pensionable age, any profit or capital growth component of that withdrawal which was earned while that person was in receipt of a pension is to be assessed as income for twelve months following the date of withdrawal.  In the case where the withdrawal was from a super fund or a super bond, the balance of moneys remaining in the product will continue to be regarded as a preserved benefit and disregarded under the income and asset tests until the pensioner attains pensionable age.  In the case of an ADF or DA, the withdrawal is generally taken to indicate retirement and the balance of the investment is no longer considered a preserved benefit.

4.These changes mean that where a service pensioner has attained pensionable age of 60 years for a male or 55 years for a female:-

.a super fund or super bond will be subject to assessment as a managed investment product; and

.the total amount of an ADF or DA will be assessed as a managed investment product.

5.In all cases, the examiner will have to verify who owns the product which is to be assessed and whether or not that pensioner is of "pensionable age".  If the pensioner is not of "pensionable age", the examiner will then have to record on file, details shown in documentary evidence received from the pensioner of any "compulsorily preserved" amounts.  All superannuation funds, bonds, ADFs and DAs will be recorded on the PIPS system as set out below.

6.Any assessable product is to be entered onto the Other Assets (OA) screen with a type of "OT" (Other).  Examiners will need to obtain the information regarding unit values, earnings rates, etc. from either the Investment Policy Officer in each State Branch or the fund manager.

7.Until system changes are made to accommodate the new policy, examiners are to enter compulsorily preserved benefits on the OA screen as type OT with an asset value of one cent, "0.01", and no income amount.  Reviews are to be entered manually for the pensioner/owner's "pensionable age" birthday.  On review, the product will be entered through the II screen as a normal managed investment.

8.A data collection exercise is currently being conducted with the objective of listing superannuation and rollover products on the managed investment database.  The products may then be viewed on II screen and it will be possible to add the products on the MI screen through that facility.

9.Inevitably some of the lesser known funds and super investments will not be found on the II screen.  The Investment Policy Officer should be consulted for advice on the action to be taken with these products.

PROCEDURES

10.The following procedures are divided into five sections:

.assessment of preserved benefits of non pensionable age pensioners;

.reassessment on implementation;

.assessment of withdrawals from preserved benefits prior to pensionable age;

.assessment at pensionable age;

.other issues.

Assessment of Preserved benefits of non-pensionable age pensioners

11.To establish whether a pensioner has a preserved benefit, the he/she should be asked to provide evidence.  In the case of an ADF or DA, the pensioner's copy of the Australian Taxation Office Rollover Payment Notification should be sought.  If this is no longer available, the pensioner should be asked to obtain documentary evidence of the preserved benefit from the rollover fund.  If the information is not provided by the pensioner, the full amount invested in the ADF or DA should be assessed under the normal investment rules for managed investments.  In the case of superannuation funds or bonds only the present capital value of the benefit need be ascertained.

12.Some ADFs and DAs may contain either preserved or non-preserved components or a mixture of both.  Only the preserved component should be assessed under these procedures.

13.Any amount identified as a preserved benefit should be disregarded for income and asset test purposes until pensionable age.  However, if a withdrawal is made prior to pensionable age the procedures outlined in paragraphs 19 to 24 apply.

14.A review should be inserted for the date when the pensioner reaches pensionable age.

Reassessments on implementation

15.Existing pensioners will be reassessed under the new rules as they come to notice.  This could be under the normal review process, or by the pensioner contacting the Department.

16.When on or before 1 May 1990 a current pensioner advises the Department of a preserved benefit, the reassessment takes effect from the most recent of the following dates:

.1 February 1990, or

.the day on which the person acquired the preserved benefit, or

.date of grant of service pension.

That is, the earliest period in respect of which arrears can be paid is 1 February 1990.

17.If a normal review conducted prior to 1 May 1990 identifies a case involving preserved benefit, arrears may be payable from 1 February 1990.

18.Client advice should be made on reassessment on implementation.

Assessment of withdrawal of preserved benefit when pensioner not of pensionable age

19.Any growth attributable to a period during which the person was in receipt of pension will be assessed as income for 12 months from the date of the withdrawal.  However those periods where the person was in receipt of pension, but which occurred prior to a continuous period of two or more years during which no pension or benefit was paid, are excluded.  Income is calculated as follows:

a)calculate start of the assessable period by disregarding periods before a two year period of non-receipt of pension/benefit from DVA or DSS (a check with DSS needs to be made);

b)obtain value of preserved benefit at start of assessable period, irrespective of whether the preserved benefit was in another fund;

c)obtain value of preserved benefit immediately prior to withdrawal;

d)calculate growth by (c-b);

e)if partial withdrawal reduces assessable growth proportionately, as follows;

Growth (d) x Amount of withdrawal

Value of Comp. Pres. Super. before withdrawal (c)

f)if there is a gap in eligibility of less than two years after the start of the assessable period, disregard growth in respect of that period;

Growth (d or e) x Period in receipt

Assessable period

g)income assessed is to be included for twelve months from the date of withdrawal.

20.An example of the calculation of income using the steps outlined in 19 above is illustrated hereunder;

Client is granted service pension (invalidity) on 1 June 1990.  He has no prior pension/benefit from DVA or from DSS.  Value of super fund preserved benefit at date of grant is $95,000.  Client withdraws $20,000 on 1 January 1991.  At time of withdrawal, value of the preserved benefit is $100,000.

Income is calculated as follows:

a)assessable growth period commences 1/6/90;

b)value of preserved benefit at start of assessable period is $95,000;

c)value of preserved benefit at withdrawal is $100,000;

d)total growth is $100,000 - $95,000 = $5,000;

e)assessable growth is [$5,000*$20,000] / $100,000 = $1,000;

f)does not apply;

g)hold income of $1,000 per annum for 12 months from 1 January 1991.

21.As outlined at Attachment A, paragraph 4, where a partial withdrawal of preserved benefit is made from a super fund, the remaining balance is maintained as a preserved benefit.

22.A review should be inserted to delete the income assessed on the anniversary of the withdrawal.  An advice letter should be sent to the pensioner.

23.As outlined at paragraph 12, where the withdrawal is "rolled over directly" into an immediate annuity, no income is assessed in respect of that withdrawal but the normal treatment for immediate annuities applies.

24.A withdrawal is regarded as directly rolled over if it is paid to the fund manager of the annuity directly by the institution operating the ADF, DA or superannuation fund.  That is, if the moneys withdrawn are held by the client at any point of time in these transactions, it is not considered a direct rollover.

Assessment at pensionable age

25.When a pensioner reaches pensionable age normal income and asset rules apply to any preserved benefit.  This means that the preserved benefit will be treated as an assessable asset.  Income test treatment will depend upon the type of investment and when it was purchased.  For instance, if the preserved benefit is taken to have commenced after 8 September 1988, income in respect of that benefit will be assessed on an ongoing basis.

26.An example of reassessment of a male veteran pensioner reaching age 60 years illustrates procedures.  He has a $60,000 capital guaranteed deferred annuity, of which $20,000 is preserved.  The deferred annuity has an earnings rate of 12.5%.  Prior to pensionable age, income of $5,000 per annum ($40,000 x 12.5%) would have been assessed.  On reaching pensionable age, income of $7,500 per annum ($60,000 x 12.5%) would be assessed.  The relevant assessable asset would increase from $40,000 to $60,000.

27.Commencement date of a preserved benefit is as follows:

.for an ADF, DA or superannuation bond - the date the investment was made.

.for a benefit retained in the original superannuation fund - the date of commencement of fund membership.

30.Where a pensioner is re-assessed on reaching pensionable age a manual advice should be issued to the pensioner.

Other issues - switching

31.As a general rule the existing policy on switching of managed investments will apply.  That is, the pensioner is considered to have realised those investments from which he/she has switched and to have invested in a new range of products to which he/she has switched.

32.Prior to pensionable age, if the benefits remain preserved after switching, no income will be assessable, in line with the policy set out above.

33.After attaining pensionable age, the commencement date of investment for the preserved benefit is taken to be the date on which the switch occurred.  Where a preserved benefit is accessed prior to pensionable age, the profit or growth component of the withdrawal is to be calculated on the basis of the earlier date for the product held before the switch was made.

34.The following example may help to clarify these switching rules:

.pensioner purchased a market linked ADF pre 9/9/88;

.on 1/6/90 pensioner switches to a different market linked ADF.  At the date of switch the pensioner is not of pensionable age;

.for the non-preserved component of the original ADF, a realisation would be deemed to have occurred.  The second ADF would be assessed on an ongoing basis;

.however, growth on the preserved component of the first ADF will not be assessed;

.on reaching pensionable age, the preserved benefit component would be regarded as having been invested on the date the switch occurred.

35.Attachment A details the legislative changes and the interpretation of those changes.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS

1 AUGUST 1990

ATTACHMENT A

LEGISLATION

1.Changes to the Veterans' Entitlements Act effective from 1 February 1990 are:

I. Section 35, Subsection (1):

-insertion under the definition of market linked investment "a superannuation benefit vested in a person held in a superannuation fund (unless a superannuation pension funded by that benefit is presently payable to that person)".

-insertion of "(including an investment in the nature of superannuation)" after "investment" in the definition of return.

-insertion of the definition of pensionable age (i.e. female veteran - 55; male veteran - 60; any other woman - 60; and, any other man - 65).

-insertion of the definition of assessable growth component (i.e. in relation to an amount of superannuation benefit, means so much (if any) of the return as is attributable to the assessable period).

-insertion of the definition of assessable period (i.e. in relation to a person, means any period during which the person received a relevant pension, except any such period occurring before a continuous period of at least two years during which the person did not receive relevant pension).

-insertion of the definition of compulsorily preserved superannuation (i.e. in relation to a person, means a superannuation benefit of a person the person's access to which is restricted by specified laws or contract).

-insertion of the definition of superannuation benefit (i.e. in relation to a person, means a benefit arising directly or indirectly from amounts contributed to a superannuation fund in respect of the person).

-insertion in the definition of income, subsection (ad), to exclude any return from a compulsorily preserved benefit prior to pensionable age

II. Section 35, Subsection (10A):

-insertion of the new subsection, "For the purposes of the definition of 'accruing return investment' in Subsection (1), a superannuation benefit vested in a person that is held in a superannuation fund is to be taken to be an investment of that person, unless a superannuation pension funded by that benefit is presently payable".

III. Section 37B:

-substitution of the Section with, "(1) Where:  (a) a person becomes entitled to receive an amount that was, until the person became so entitled, a compulsorily preserved superannuation benefit; and (b) the person has not reached pensionable age; the person is, for the purposes of this Act, to be taken to receive one fifty-second of the assessable growth component of that amount as income of the person during each week in the period twelve months starting on the day when the person becomes entitled to receive that amount.  (2) Subsection (1) does not apply to any amount received by a person by way of a superannuation pension or a payment under an immediate annuity."

IV. Section 50(1):

-insertion of a new subsection (iiic) which excludes holding of the value of any compulsorily preserved superannuation benefit under the assets test prior to pensionable age.

INTERPRETATION OF THE LEGISLATION

Prior to Pensionable Age

2.Pensionable age is defined in the legislation as female veteran - 55, male veteran - 60, any other woman - 60 and any other man - 65.  From 1 February 1990 income will not be assessed on any preserved benefit unless a withdrawal is made.  That is, prior to pensionable age, a pensioner is only considered "entitled to receive" a benefit where the product has been accessed and moneys withdrawn.

3.If a withdrawal is made, any growth attributable to a period during which the person was in receipt of pension or benefit will be assessed as income for 12 months from the date of withdrawal.  However those periods where the person was in receipt of pension, but which occurred prior to a continuous period of two or more years during which no pension or benefit was paid, are excluded.As a matter of policy, if the money is rolled over directly into an immediate annuity, the growth will not be assessed as income.  The immediate annuity will be treated in accordance with the current rules.

4.A pensioner may choose to withdraw only part of the moneys contained within a product.  In the case of a partial withdrawal from a super fund or a super bond, the balance of the investment remains a preserved benefit.  A partial withdrawal from an ADF or a DA is taken to indicate genuine retirement and the balance of the investment is no longer considered a preserved benefit.  However, in the case of an ADF or DA where the partial withdrawal has been made under the "personal hardship" condition specified under the occupational superannuation standards, then the balance of the investment is to continue to be held as a preserved benefit.

Pensionable Age

5.On the pensioner reaching pensionable age, the preserved benefit will be assessed under usual managed investment rules.  For example, if the investment was a market-linked product and commenced after 8/9/88, income would be assessed on an ongoing basis using an earnings rate applied from the date of attaining pensionable age.  That is, the product is assessed according to the provisions for managed investments from the date of attaining pensionable age and any earnings on that product which accrued before that date are not assessed as income at any stage whether or not that person had previously been receiving a pension payment.

6.In applying the provisions for managed products to preserved benefits, the commencement date of the product is taken to be the date at which the person first joined the super fund or purchased the super bond, ADF or DA.

ASSETS TEST

Prior to Pensionable Age

7.From 1 February 1990, the value of any preserved benefit will be disregarded under the Asset Test.

In the event of a partial withdrawal from a preserved benefit the balance of the investment in a super fund or a super bond will be maintained as a preserved benefit.  The balance held in an ADF or DA will no longer be considered as a preserved benefit and will be treated as an assessable asset except where the withdrawal was made under conditions of "hardship".

Pensionable Age

8.Once a pensioner attains pensionable age, the preserved benefit will be treated as an assessable asset.

DATE OF ISSUE: 25 JULY 1990

SOCIAL SECURITY AND VETERANS' AFFAIRS LEGISLATION AMENDMENT BILL 1990

Attached are amendments to the VEA and General Orders Service Pension resulting from an announcement by the Prime Minister on 4 December 1989 that payments made by the Austrian Government as compensation for Nazi persecution during World War II would not affect Australian social welfare income-tested pensions and benefits.

2.The amendment to the Legislation was effected by the Social Security and Veterans' Affairs legislation Amendment Act 1990 which received Royal Assent on 16 June 1990.

3.The date of effect of this amendment is 4 December 1989.  It is not possible to identify automatically any affected pensioners.  Therefore, care should be taken with future reviews of service pensioners who receive the relevant payment from the Austrian Government that the benefit of the exemption of this payment is applied with effect 4 December 1989.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR,

BENEFITS

27 JULY 1990

AUSTRIAN RESTITUTION PAYMENTS

1.    VEA Amendment

Sub-Section 35(1) has been amended as follows:

(a)omit "or" from item (x) of the definition of "income"' and

(b)insert after item (y) of that definition, the following word  and paragraph -

"or

(z)an amount paid by way of compensation by the Republic of Austria under the laws of that Republic relating to compensation for victims of National Socialist persecution;"

2.    Amendment to the General Orders Service Pension

Chapter 4 of the General Orders Service Pension has been amended to read:

"4.51 - AUSTRIAN RESTITUTION PAYMENTS

The Austrian Governments makes compensatory payments to  people who suffered Nazi persecution, including loss of  health, property, education and official status during World  War II.

The Australian Government considers it is inappropriate to  continue to regard these special payments as income.

Therefore, an amount paid by the way of compensation by the  Republic of Austria or by a State of that Republic relating  to the compensation of victims of National Socialist perse cution is to be exempt income under item (Z) of the defini tion of "income" in sub-section 35(1).

This amendment, which takes effect from 4 December 1989, is  a logical extension of the earlier decision to disregard as  income compensation payments for Nazi persecution made by  the Federal Republic of Germany.

A similar amendment has been made to the definition of  "income" in section 3 of the Social Security Act."

DATE OF ISSUE: O9 JULY 1990

ESTATE MORTGAGE TRUSTS SUSPENSION OF INCOME ASSESSMENT

The purpose of this instruction is to advise that until further notice no income is to be assessed against any Estate Mortgage trust fund and to outline arrangements for the suspension of assessemnt of income for veterans holding these investments.

Names of the Trusts covered by this Instruction

2.Burns Philp, trustee for the Estate Mortgage managed funds, has advised that the March distribution of income to unit holders is in doubt and any further distribution of income is uncertain.This advice applies to all of the Estate Mortgage funds, namely:

Estate Mortgage Income Trust No.  1

Estate Mortgage Investment Trust

Estate Mortgage Depositors Trust No.  1

Estate Mortgage Depositors Trust No.  2

Estate Mortgage Depositors Trust No.  3

Estate Mortgage Depositors Trust No.  4

3.Assessment of income from these trusts is to be suspended until such time that an income distribution for the trusts has been made.  Asset values for the investments are to continue to be held pending further advice from the trustee.

Pensioner Initiated Reviews

4.Pensioners who have written to the Department seeking reassessment of income from these investments should be reassessed as from the payday after receipt of the written advice.

Automatic Reassessment Run

5.Pensioners holding these investments who have been data collected onto the Managed Investments screen of the PIPS System will be reassessed via an automatic processing run to be made for payday 12 July 1990.

6.Payment advices for changes in entitlements as a result of this run will be produced automatically and will be delivered to each Branch for despatch to the pensioner.

Manual Reassessment

7.Those pensioners holding these investments who have not sought reassessment and are not yet data collected onto the Managed Investments screen will be reassessed on a case-by-case basis as they arise in process of review.  These pensioners are to be reassessed as from the same date as the automatic run and arreas are to be payable from this date, 12 July 1990.

Contact Officer

8.The contact officer at Central Office for inquiries on this matter is Chris Lee, Income Support, phone 06 289 6081.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

(BENEFITS)

DATE OF ISSUE:  04 JULY 1990

EXCHANGE RATE ADJUSTMENTS TO BRITISH DISABILITY PENSIONS PAID IN AUSTRALIA

Advice has been received from the British Department of Social Security (BDSS) to the effect that the exchange rate to be used for payment of the British component of disability pensions in Australia has been reviewed.

2.The new rate is to be put into effect on payday 9 August 1990.  The exchange rate will vary from $A2.15 to $A2.20 to one Pound Sterling (British pension rates charts are at Attachment C).  The variation applies to the Hong Kong cases and to the EATS and Composite cases.

3.There will be no cases processed automatically.  All cases will be listed for manual examination.

SERVICE PENSION CASES

4.A report will be produced of Service Pension cases with British Pension in payment to enable update of the DP amount for service pension assessment purposes.

5.Action schedules of cases requiring manual examination and variation by examiners will be produced, on 21 July 1990, in groups made up of the following:

Group Content                 Group Reference

.Composite Cases — 100

(with or without SP)

.EATS Cases — 200

(with or without SP)

.Other overseas pensions — 300

(which may be affected).

Groups 300 are to be processed via the PMF update transactions.

Groups 100 and 200 are to be processed via PIPS.

PUNCHING OF TRANSACTIONS FROM "ACTION" SCHEDULES EATS AND COMPOSITE CASES

6.Pay Period Codes

The pay period, namely 29, for the effective date (9 August 1990) should be entered.  The day within the pay period field may be left blank.

Keyfast Batch Description

The manual transactions for EATS and Composite cases should be punched using Keyfast batch description $ PENSIO by cutoff for payday 9 August 1990.

CONTROL CARDS AND COMPUTER RUNS

7.Control card formats for computer runs are at Attachment B.  The computer processing timetable is at Attachment A.  Runs according to this timetable will be scheduled by Central Office.

CASES WITH SERVICE PENSION AND OR AN AUSTRALIAN DP COMPONENT TO BE PROCESSED VIA PIPS  (Group 100, 200)

8.For all cases involving EATS, Composite or service pension, whether automatic or manual method of assessment, the new rate of British pension must be updated on the Client Data Base (CDB) via PIPS.  Due to the change in the British rate, these cases will be "MS" and determined by the delegate, or through manual authority on PIPS only.

9.It will not be necessary to prepare a D408, or equivalent in these cases; the schedule produced for dual SP/EATS/COMP cases to record the changes to the PMF may be used as an authority provided each record on that schedule is endorsed with the consecutive number automatically produced by the Pension Processing System and is signed by the delegate determining the case, prior to transmission to Pension Payments Section.  All such cases can be identified from the manual schedules listed by the ALO2, ALO3 runs (i.e., group 100, 200) and the new British rates should be deducted from the examiners' entries on those schedules.

NOTE:All entries on these schedules must be in Australian dollars.

ADVICES

10.The Advices System will generate an advice in cases where a payment variation is made.  Examiners should action cases in the following manner:

Continuation Cases

Unless the total payment varies the PIPS Advices screen should be accessed and production of an automatic advice suppressed.  The Advice Indicator on the Action Schedule should be set to "Z".

Variation Cases

Where a variation in total payment results the PIPS Advice screen should be accessed and the Suppress Income/Asset List Indicator set to "Y".  This will result in production of a variation advice with no income and asset details.  The Advice Indicator on the Action Schedule should be set to "Y".

CONTACT OFFICER

The contact officer for this exercise is:

RIC MOORE  Phone — 06 289 6214 (BH)

06 282 3913 (AH).

JIM DALTON

ASSISTANT SECRETARY

PLANNING & MANAGEMENT

ATTACHMENT A

TIMETABLE FOR BRITISH REVALUATION EFFECTIVE 9 AUGUST 1990

STAGE 121 July 1990

RUNPURPOSE

RSPYAL01 — Listing of cases requiring manual action

RSPYAL02(Z cards in CPP.BRITRVAL.CNTL(AL02RUN1)

RSPYAL03

RSPYAL04 — Composite/benefit in file no or alpha order within               composite group order required for NSW Qld (i.e.               use AL run book sort card 5).  Job NPALA23A

OUTPUTS:Listing Journal:  Schedules - use 3 part paper and double               spacing

$PPBBSPR — Report of Service Pensioners with British DP.

THE BENEFITS CONTACT OFFICER WILL BE

RIC MOORE(06) 289 6214 Bh

(06) 282 3913 Ah

DATE OF ISSUE: 26 JUNE 1990

BENEFITS ADVICES SYSTEM - PHASE 1

INTRODUCTION

This instruction is to advise of implementation of the Benefits Advices System - Phase 1.

BACKGROUND

2.Prior to implementation of this system a computer produced payment advice was sent to pensioners on the grant/variation of their pension and/or allowances.  In addition, a number of manually prepared advices were sent containing details of income and assets and a list of obligations and, where relevant, fringe benefit information.

3.The Brownlea Report, produced in mid 1988, identified a number of problems associated with these and other advices generated by this Department.  One of the many recommendations of the Report was that a `plain English' advice be produced for our pensioners.  The paragraphs for the advices to be produced by the Benefits Advices System - Phase 1 have been developed using the findings of this report as a basis and with the assistance of consultants, the State Branches of this Department and Professor Brownlea.

ADVICE CHANGES

4.The system has been designed to produce `case specific' advices.  In other words, the only information that will be contained in a pensioner's advice will be information relevant to that person's pension or benefits.  The advices will include information such as payment details, fringe benefits eligibility (including recall and issue of medical treatment cards), income and assets details, obligations and, where relevant, taxation information.

5.Obligations will also be `case specific'.  For example, if a service pensioner is receiving rent assistance, rent assistance obligations will be included in the advice.  Disability pensioners will also receive some `general obligations'.

6.Where service pension was/is in payment a General Information Sheet will also be included.  This contains information such as the maximum rates payable, the basic income/assets limits for maximum rate service pension and fringe benefits, telephone rental concession eligibility and rent assistance information.

7.Automatic advices will now also be produced for cancellations and interstate transfers.

8.The paragraphs will be the same for every State, with the exception of the rail travel paragraph included with fringe benefits.  As there is no rail concession available in Tasmania and as conditions differed for other States, State specific paragraphs have been created.

MAINTENANCE OF ADVICE PARAGRAPHS

9.A `library' of approximately 200 paragraphs is stored on the database and the appropriate paragraphs are selected (based on the individual's circumstances) to form the advice.

10.Maintenance of the paragraphs will be the responsibility of the Benefits Income Support Branch.  Generally, if changes are required as a result of rate changes or changes in policy, paragraphs will be updated and details of the new information to be included in advices will be forwarded to each Branch Office.  However, if a Branch letterhead or Deputy Commissioner's signature needs to be updated, then the Branch should request Income Support to arrange for the change to be made.  Suggestions for changes/additions to paragraphs should be directed to the Director, PD&I Section, Income Support Branch, Central Office.

11.Each State has been given a copy of the training manual for the Benefits Advices System - Phase 1 which contains a copy of the advice paragraphs, details o9f paragraph selection criteria and advice selection and procedures.  This manual should be maintained in each Branch, as it is the only record of what detail is included in a particular type of advice.

PIPS CHANGES

12.Changes to PIPS have been minimal with changes required only for a new screen (PP.DS - DSS Clearance) and an amended screen (PP.AD - Advices).  Copies of these screens are at Attachments A and B.

PP.DS - DSS Clearance

.This screen must be accessed and updated for SP new claims, or where defaults are to be overwritten.  The health card suppression facility is also contained on this screen.

PP.DA - Advices

.This screen need onlyt be accessed if an advice type is to be selected by the examiner or where other fields are to be updated.

.The `reason for advice' field has been enlarged and will accept up to 210 characters.  Data entered will not be converted to upper case as is the case with our current advices screen.  Examiners should therefore enter data in upper and lower case.

.The copy facility will be still available, ie, if the reason for the spouse is the same as the veteran then ditto (") can be entered on the first line of the spouse reason.

.A "contact" and "telephone" field has been included on the advices screen and this should be completed.

.A `suppress automatic advice' facility is available and is used by entering a `Y' in the VET or SPS field.

.A `suppress income/asset list' facility is also available.  If an income/asset list is not required then a `Y' should be entered in the appropriate field.

13.Unless the examiner has selected a relevant advice type on PP.AD, the submission facility on PIPS will select that appropriate advice(s) for the action that is being processed.  The examiner will need to select the advice type on PP.AD where the system is unable to identify sufficiently the type of action being processed, eg, submission cannot determine whether a new grant or a transfer-in is being processed.  Details of the types of cases where examiner selection is necessary are covered in Part 3 of the Training Manual.

SPECIAL REGISTER CASES

14.Automatic assessments which are special register methods of payment will not generally have advices produced automatically.  However, if the pensioner is resident in Papua New Guinea and the method of payment is special register S,T & U then an advice will be produced automatically.  Because if is not relevant, fringe benefits information will not be included.

MANUAL RATES CASES

15.If the manual rates screen (PP.MR) has been completed the advice will not include the income and assets list or any obligations.  (Refer to Part 1 of the Training Manual for further information).

MANUAL PAYMENTS

16.Manual payments include payments such as Education Allowance, AMS Pension and Overseas Pension.  Advices to be produced for these types of cases will still only include payment information.  The words in these advices have been upgraded to reflect the word changes in the new advices.

MANUAL TRANSACTIONS

17.Manual transactions are completed to vary manual payments for automatic assessments, eg, to grant clothing allowance when disability pension is in payment.  These advices include payment information and, if disability pension only is in payment, then the General Obligations and Taxation Advice will also be included.

ADVICE PRODUCTION

18.The advices will be produced on a duplex laser printer at the NCC and sent to Branches the next working day through job stream.  There will be no copies produced however a retrieval facility is available.  This facility will duplicate the actual advice sent to a pensioner.  Procedures for requesting copies of an advice will be forwarded separately.  Samples of advices are at Attachments C & D.

PUBLICITY

19.Because pensioners will find the new advices very different to the old style advices, it has been decided to undertake some publicity.  As a result, a News Release has been issued by the Minister.  A copy of this bulletin is at Attachment E.  Details included in the News Release will also be included with the next edition of the Age Pension News and with the next issue of Vetnews.  In addition, a brochure will be available shortly which explains the reasons behind the new format.  Supplies will be forwarded to each Branch and to the main ex-service organisations as soon as they are available.  During the first few months of the new advices system, Branch Offices should insert these brochures with the advices when they are being despatched.

ENQUIRIES

20.Any enquiries regarding the Benefits Advices System - Phase 1 should be directed to the Senior Project Officer, Clare McCorry on telephone (07) 223 8688.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS

DATE OF ISSUE:18 June 1990

NEW ZEALAND PENSIONS GENERAL INCREASE 1 APRIL 1990

The New Zealand Department of Social Welfare has sent or will send individual authority forms to your office for a general increase in pension due from 1 April 1990.

PAYMENT DATE

2.The date on which the new rates are to be put into effect is at your discretion, subject to the availability of resources in your office.

INDIVIDUAL AUTHORITY FORMS

3.The Department of Social Welfare is responsible for forwarding an individual authority form specifying the amount, in New Zealand Dollars, to be paid in each case.  In any case where an authority form does not arrive please contact the New Zealand Department of Social Welfare direct.

PROCEDURAL CATEGORIES

4.There are no totally automatic aspects of this exercise and the procedures to apply are also at your discretion.  Your ADP section could use an AL02 run to extract from the PMF all cases being paid on New Zealand code 5600.  The AL02 run will provide a quick reference to the case.

RATES TABLE

A detailed rates table (attached) has been produced for your assistance.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

DATE OF ISSUE:07 JUNE 1990

BRITISH RETIREMENT INCOME (BRI) - EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING

In line with the amendments to the Veteran's Entitlements Act Division 1AA concerning the regulating of Foreign Currency, a variation to pension rates is to be implemented.

Effective Date

2.On payday 12 July 1990 the current exchange rate will change from 1 Pound Sterling equals $A2.13 to 1 Pound Sterling equals $A2.18, being the average of the "on demand airmail buying rate" for the month of May 1990.

Timetable

3.The various computer runs necessary for this exercise have been scheduled for Thusday night, 21 June 1990.

Automatic Superannuation Processing

4.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 will not be processed.

5.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=$2.18=1.0235

old exchange rate$2.13

6.The amount in $A of income recorded as British Retirement Income 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

7.The Assistant Secretary of both Benefits Planning and Management and Corporate Development Branches at Central Office will attest to the correctness of the new exchange rate and the programs used to conduct the exercise.  Certificates in the terms of Finance Regulation 45A will be forwarded to the "Authorising Officer" in your Finance Branch.

Advices

8.The new pension payment computer advice letters containing the exchange rate will be automatically produced for all cases where a variation in pension occurs. The advices will be forwarded direct to your Branch from the NCC with the usual daily outputs.

Contact Officer

9.The contact officer at Central Office for this exercise will be

RIC MOORE telephone (06) 2896214 bh

(06) 2823913 ah

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

DATE OF ISSUE:  07/06/90

COMMONWEALTH SUPERANNUATION AND DEFENCE FORCE RETIREMENT BENEFIT & DEATH BENEFIT PENSION INCREASES - EFFECT ON SERVICE PENSION

The Australian Government Retirement Benefits Office (AGRBO) willincrease Commonwealth Superannuation and Defence Force RetirementBenefit and Death Benefit (DFRB/DB) payments in July and, as a result of that this Department will adjust service pensions for those pensioners affected.

Effective Date

2.It is intended to adjust service pensions from this Department's payday 26 July 1990, being the first payday following payment of the increased AGRBO benefits.

NOTE:  This exercise will not be conducted in the same manner as previous

years.  The output, reports and the correction of mismatch cases has been changed.

Timetable

3.In previous years, two consecutive weekends have been set aside to process this exercise.  This year, the weekend of 7-8 July 1990 has been allocated to complete all the processing, i.e. to select cases, match with the Super authority tapes, and do the automatic reassessment.  An instruction to the NCC to run Schedule 9.4.1 Superannuation Fund Tape Processing as detailed in the Departmental Instruction B17/90 [34] for each State will be issued by Central Office.

General Matching Process

4.The necessary tapes will be obtained from AGRBO to commence the ADP matching exercise to identify dual payees.  In general the matching process will be conducted as follows:

.A file of service pension cases with Commonwealth or DFRB superannuation (type 3 and 4) will be matched with tapes provided by AGRBO containing that authority's payees;

.Matching will be based upon a combined key of surname and old (super) rate as the primary key;  initials will be included as a secondary matching key.

.Each state's selected "superannuation" records will be compared with AGRBO records on an Australia-wide basis.

Output Schedules

5.Output schedules will be produced in three categories:

(a)A listing of all service pension cases recorded on the CDB with Commonwealth or DFRB superannuation.  This schedule is in an input transaction format;

(b)A listing of unmatched cases.

(c)A listing of mismatched initials, (warning only).

A complete listing of AGRBO payees will NOT be produced this year as it would contravene the Information Privacy Principles of the Privacy Act 1988.

Unmatched Cases

6.It is recognised that our inability to provide the listing of AGRBO clients will cause delay in the correction and review of unmatched cases.  However, the report on unmatched cases has been improved to provide a list of possible clients with whom to match.

Schedule of Unmatched Cases

7.Unmatched cases will be listed for Branch action.  These are the only cases which require entry of the new super rate onto the super select schedule for input to the super reassessment program.  An improved matching process has been devised and it is hoped that a higher percentage of matched cases will occur.  If a match on a surname can be combined with either a matched reference number, a correct rate or a date of birth then all the "likely match" cases will be printed.

Mismatch On Initials

8.Where the primary matching conditions are met but the initials in the records differ, the case will go ahead for subsequent automatic updating but, as a warning that the record may not be correct, a separate schedule of these cases will be produced for the Branch to examine the discrepancy.  This schedule will be headed: "INITIALS MISMATCH".

9.Where the Branch is satisfied that the records (both AGRBO and DVA) are those of the same person, no further action is necessary.  However, where an adjustment of our record is necessary to process the case, action must be taken to substitute the automatically prepared data with the correct data before cut off.

10.Should you be uncertain about the identity of the cases and wish to prevent super processing, you should register an action and put the case into investigation (IN) status.  This will prevent automatic updating occurring.

Keyfast Transmissions to Computer Centre

11.NSW, VIC and QLD may process super transactions entered through KEYFAST in the normal manner.  (SA, WA and TAS may use Keyfast, however they will need to request the facility be set up.)

In cases where the new rate is updated via Keyfast transmission, data entry of the following fields is mandatory:

STATE, FILE NO, SEG.LINK, SUPER TYPE and NEW RATE.

The Super Reference Number should be included in the transaction if you wish to retain it on the CDB record.

Input Transaction Format

COL — 1 — 2-8 — 9-42 — 43 — 44-45 — 46-54 — 55-60 — 61-80

CONTENT — STATE — FILE — PERSONAL — SEG.SUPER — SUPER — NEW — FILLER

NO.DETAILS — LINK — TYPE — REF NO.RATE

LENGTH — 1 — 7 — 34 — 1 — 2 — 9 — 6

12.Once the transactions are entered through Keyfast, the following ADP MESSAGE should be sent to the NCC, OIC Shift.

"Please run Schedule 9.4.2 Superannuation KEYFAST Processing of the Automatic Reassessment Processing Operations Guide to run on the (insert date) using the following parameters:

STATE IDENTIFIER:N, V, or Q

SUPER TYPE CODES:03, 04

PAY PERIOD:28 ..... 30 (as appropriate)

PAY DATE:26/07/90 (effective payday)

RUN DESCRIPTION:COMM SUPER (Report Heading)

ALL REPORTS TO BE RETURNED TO ........................... BRANCH

ATTENTION:  (Contact Officer's Name)"

13.In line with part 11.1.7 of the Finance Regulation 45a procedures it will be necessary for delegates to verify that payees on the AGRBO tapes have been correctly matched with service pensioners receiving superannuation.  A check of at least 5% of cases is required.

Overseas Cases

14.Any case recorded on the AGRBO records as having an overseas address will now be matched on an Australia wide basis.  It is not possible to identify an overseas client from the AGRBO tape as their tape does not include State or Country indicators.

Advices

15.The usual pension payment computer advice will be automatically processed for automatically assessed cases where a pension variation occurs.  These will be forwarded direct to your Branch from the NCC with the usual daily outputs.  Manual cases will require manual advice selection.

Contact Officer

The contact officer for this exercise will be

RIC MOORE  Phone — 06 289 6214 (Bh)

06 282 3913 (Ah)

JIM DALTON

ASSISTANT SECRETARY

PLANNING & MANAGEMENT

ATTACHMENT A

PROCESSING SCHEDULE - 7/8 JULY 1990 EFFECTIVE 26 JULY 1990

7/8 July 1990

.Superannuation selection runs to produce a file, plus a schedule of service pension cases receiving Commonwealth and DFRB super.

.Automatic matching runs between AGRBO tape and DVA tape to automatically produce

.transactions for automatic input to the superannuation reassessment program;

.a schedule, of unmatched primary cases;

.a schedule, of secondary cases with mismatch initials.

.Automatic superannuation reassessment runs to

.update the CDB;

.produce type 10 transactions

.run EDIT/UPDT/ADVICES runs to apply type 10 transactions to the PMF;

.list out manual SP cases; and

.list of mismatches following reassessment.

9 July 1990

.Branch Office processing of manual cases via the on-line system up to cutoff for Payday 26 July 1990.  Cases not able to be reviewed in this time to be actioned as soon as possible.

DATE OF ISSUE:  16 May 1990

AMENDMENTS TO INCOME TESTING OF SUPERANNUATION PENSIONS AND INCOME/ASSETS TESTING OF IMMEDIATE ANNUITIES UNDER THE VEA

INTRODUCTION

This instruction covers changes to the treatment of superannuation payments and immediate annuities under the Veterans' Entitlement Act.  These changes were contained in the Social Security and Veterans' Affairs Legislation Amendment Bill (No. 4) 1989, which received Royal Assent on 19 December 1989.

BACKGROUND

2.Currently, the total amount of income being received from a superannuation pension or an immediate annuity is held in the assessment of a service pension under the income test, although in some cases a portion of that income represents a return of the pensioner's own contributions.

3.Immediate annuities are not asset tested, unless the annuity has a residual capital value (i.e. a predetermined amount payable in a lump sum on termination); and/or is commutable.

4.As part of the 1989 Budget the Government determined that the treatment of income from superannuation pensions and immediate annuities for service pension purposes should be aligned with the taxation treatment of such income.  Under the Income Tax Assessment Act, that portion of superannuation or immediate annuity income which represents the return of the initial investment or pensioner contributions, in most cases, is not taxable.  This is known as the Undeducted Purchase Price (UPP).pa

CHANGES

5.As from 19 April 1990, the treatment of superannuation pensions and immediate annuities under the income/asset test will be as follows -

.only the taxable portion of the income will be held under the income test;  and

.the purchase price of an immediate annuity purchased after 15 August 1989 will be treated as an asset, but proportionally reducing over the term of the annuity.

LEGISLATION

6.Sections 35 (Interpretation); 37 (Method of calculation of income); and 50 (Calculation of value of property) of the VEA have been amended to reflect these changes.

ASSESSMENT

Superannuation  Pensions under the Income Test

7.The amount of income to be held in the assessment of service pension will be calculated according to the following formula -

GROSS - DEDUCTIBLE AMOUNT  =  AMOUNT (P/F)

where

gross=gross fortnightly pension

deductible amount=the fortnightly apportioned amount of                             non-assessable purchase price (NAPP has                             the same meaning in the VEA as the UPP                             in the Tax Act)

amount (p/f)=the assessable income

Example

Mr Digger receives a superannuation pension from the NRMA Superannuation Fund.  Gross fortnightly pension is $451.90; the NAPP or the deductible amount (DA) is $50.00.  Therefore -

$451.90  -  $50.00  =  $401.90 p/f to be held in the assessment

Immediate Annuities under the Income Test

8.The amount of income to be held in the assessment of service pension will be calculated according to set formulae, which discounts that portion of the return which represents the return of the non-assessable purchase price (NAPP).

9.The amount of NAPP will depend on whether or not the annuity was purchased with cash, or with rollover funds.

Immediate Annuities purchased with cash

10.Where an annuity is purchased with non rollover funds, the  total amount of the purchase price is the NAPP.

Step 1 -Calculate the deductible amount (DA) by the following formula

NAPP - RCV /26  =  DA of $ p/f

RN

where NAPP=the nonassessable purchase price

RCV=the residual capital value

RN=the relevant number i.e. the term in years of the annuity

Example

Mr Brown owns an annuity purchased for $100,000 with a residual capital value of $10,000.  Gross annual return is $12,000 and the term of the annuity is 10 years (i.e. RN).

100,000 - 10,000 /26  = DA of $346.15 p/f

10

Step 2 - Calculate the fortnightly rate of income by deducting DA from gross return

Annual Return of $12,000 / 26=              $461.53 p/f

-              346.15 (DA)

Income p/f=              $115.38

Immediate Annuities purchased with rollover funds

11.An immediate annuity purchased with rollover funds means that it has been purchased with funds which have initially come from a superannuation fund.

12.Because of the favourable tax treatment of superannuation and roll-over funds, only that portion which represents the veteran's own contributions can be treated as "after tax" money, or UPP.

13.Immediate annuities purchased with rollover funds will contain some or all of the following-

.UPP

.a pre '83 component

.post '83 component

14.For income test purposes and as a further concession to pensioners, it has been determined that for one annuity only,the UPP amount will be increased by an additional amount up to -

.the balance of the purchase price;

OR

.the taxable amount  - WHICHEVER IS THE LESSER.

NOTE - The taxable amount refers to a portion of the post 1983 component which attracts a lower rate of lump sum tax - currently up to a maximum of $64,500.  The taxable amount is indexed annually to average weekly earnings.  The taxable amount to be applied in each individual case is the amount which was applicable in the year the annuity was purchased.

Step 1 - Calculate the NAPP by comparing

(a)the Purchase PriceVS(b)the UPP + Maximum Taxable Amount

Example

Mr Brown purchased an annuity with rollover funds for $100,000 with a residual capital value of $10,000.  Gross annual return is $12,000 for a 10 year term.  The UPP has been valued at $20,000.

(a)$100,000VS(b)$ 20,000 + $64,500

THEREFORE THE NAPP = $ 84,500

Step 2 - Calculate the DA as per formula

84,500 - 10,000  / 26  =  DA  $ 286.53

10

Step 3 - Calculate assessable fortnightly income by reducing gross return by the DA amount

$12,000 / 26 =              $ 461.53

              -              286.53

              $ 175.00p/f

NOTE - The additional deduction should be applied to the annuity first notified.  Where more than one annuity is notified at the same time, the concession is to be applied to the annuity which would provide the most benefit to the pensioner.

15.Any other annuities purchased with rollover funds will receive a reduction on income based only on the UPP component.The following is an example -

Example

Mr Brown purchases another annuity with a roll-over fund. Purchase price $100,000;  with a residual capital value $10,000. The gross annual return is $12,000 for a 10 year term. The UPP has been valued at $20,000.

Step 1 - Calculate the DA

20,000 - 10,000  / 26  = DA $38.46 p/f

              10

Step 2 - Calculate the assessable income by reducing gross return by DA

$12,000 : 26              =              $ 461.53

              -              38.46

              $ 423.07 p/f

Additional Undeducted Purchase Price

16.Where a veteran in receipt of a superannuation pension or an immediate annuity advises the Department that he/she has a UPP amount in excess of the amount quoted by the superannuation fund/life office, and provides documentary evidence -eg latest income tax return/assessment notice/letter from the Australian Taxation Office (ATO), this amount will be used to further reduce the gross superannuation or immediate annuity.

17.If the veteran has more than one superannuation pension or immediate annuity, the total additional amount quoted by the ATO will be apportioned against all payments.

Immediate Annuities under the Asset Test

18.Immediate annuities purchased on/or after 15 August 1989 will be assessed under the asset test, however only that portion of the purchase price which is still to be returned will be held and this amount will be reduced on an annual basis.  Those that were bought prior to that date will continue to be assessed as currently - ie nil asset value, or only the residual capital value or commutable amount being assessable (paragraph 3 refers).

19.The following formula will be used to determine the assessable asset amount , and the calculation will be done automatically -

RN - ( YE + 1) x  (PP - RCV)

RN+ RCV = ASSET AMOUNT; OR

ASSET AMOUNT=RCV,  whichever is the GREATER.

where

PP=the purchase price of the annuity

RCV=the residual capital value

RN=the relevant number -i.e. the term of the annuity

YE=the number of full years that have elapsed since the annuity                             became payable

Example

Mr Brown purchased an annuity in October 1989, for $100,000 with a residual capital value of $10,000 for a 10 year term.  Pension is being reassessed in October 1990.

10 - (1+1)x(100,000 - 10,000)

10+ 10,000 = $82,000

  ASSET AMOUNT =  $ 82,000 (which is greater than RCV of $10,000)

PIPS SYSTEM CHANGES

Superannuation

20.The existing "Superannuation" field on the Income screen has been modified to reflect the new form of assessment (Refer to Attachment A for screen design and detailed information of the data items).

Immediate Annuities

21.A new "Immediate Annuities" (PP.IA) screen will be available under PIPS for immediate annuities (Refer to Attachment B for screen design and detailed information of the data items).

22.The system will -

.automatically calculate the deductible amount (DA);

.calculate assessable income by deducting DA from gross return; and

.calculate the asset amount.

23.A further "summary" IA screen will also be available which will provide ready viewing of all annuities recorded in the case (up to 12 per page), and easy access to individual IAs recorded.  The "summary " screen will be displayed on entering PP.IA where annuities already exist in the case.

IMPLEMENTATION

Implementation Date

24.The commencement date for these changes is 19 April 1990, to coincide with the April AL.

Procedures

Automatic Superannuation Funds

25.Commonwealth, DFRB, and the State superannuation funds which currently provide the department with tapes for automatic matching have been requested to modify the existing format, to enable automatic reassessment of all veterans who are eligible to receive a reduction in their assessable income - ie who have a deductible amount.  The following format has been requested -

.old gross rate (the total amount of payment)

.new gross rate

.old taxable amount

.new taxable amount (the net amount which will be held in the assessment).

NOTE: It is not certain that all funds will be able to provide the necessary information to enable automatic updating.

Manual Superannuation Funds and Immediate annuities

26.Superannuation Funds and Life Offices have been requested to write to their clients, highlighting the new treatment of superannuation pensions and immediate annuities under the VEA,  advising their clients to contact DVA with a request for a review of their entitlement under the new guidelines, and where possible providing them with a schedule listing relevant date to be forwarded to DVA together with the veteran's request (Attachments C & D).  Confirmation of pensioner's UPP will be obtained by reference to his/her latest income tax returns and assessment notice.

27.Requests will be treated as Pensioner Initiated Reviews (PIR).  Where the veteran does not approach the Department, manual superannuation cases currently listed on the superannuation screen, or immediate annuities stored on the income screen,  will be amended as they come to notice ie the veteran is to be contacted to obtain the relevant information; the superannuation pension or immediate annuity will then be data collected (on the new screen for immediate annuities) and the old entry deleted.

DATA COLLECTION AND DATA ENTRY

Superannuation

28.The new system will be available for manual data collection and entry from 19 March 1990.  All requests for reassessment received in the department will be registered on the CMS as PIRs.  The pension reviews examiner will manually calculate the deductible amount as per formula outlined at paragraph 7.

29.The case will be submitted to a delegate for checking and determination.  Reassessment will occur automatically on conversion during the weekend of 31 March/1 April.

30.Veterans who are in receipt of a pension from a superannuation fund which is updated automatically will either be manually reassessed upon request or automatically updated on the provision of the tape.

Immediate Annuities

31.It is anticipated that the new Immediate Annuities screen will be available for data collection and data entry from 30 May 1990.  Requests for reassessment will be registered on CMS as PIR's.  A special attribute for immediate annuities number 375 will be set automatically on determination.

32.The pension reviews examiner will complete the special worksheet (Attachment E) from the details contained on the "Schedule of information on your immediate annuity" form provided by the veteran.

33.When the system is available, data from the worksheet will be entered onto the new screen, and the case submitted to a delegate for determination.  At the same time any details already stored in the system concerning the same immediate annuity will be deleted.

EFFECTIVE DATES

34.For all increases the effective date is 19 April 1990 providing that the veteran's advice was received prior to that date.

35.Requests for reassessment received after the 19 April, will be treated as for PIR's - i.e. the effective date is the payday after receipt of advice.

36.For continuations, the effective date for the data collection is 19 April, or the payday following receipt of advice.

37.Reductions and cancellations will be effected from the current reduction date.

REVIEWS

38.Where the service pensions are asset tested, the asset values for immediate annuities will be reviewed annually as a bulk exercise as part of the normal asset reviews (usually April).

ACTION UPON DEATH

39.When payments from a superannuation pension or an immediate annuity are transferred to the surviving spouse of a deceased superannuate, these payments will be reduced by the deductible amount (DA) applicable prior to death, regardless of the level of new payments, unless the surviving spouse advises of a change in circumstances - eg change in the relevant number, in which case the DA will be reviewed.

ADVICES

Superannuation

Manual Cases

40.Where a veteran's service pension has been increased as a result of the change in the treatment of superannuation pensions a special advice must be forwarded which outlines the reason for the increase.  The advice should outline his/her specific obligations concerning this matter.  A suggested draft appears at Attachment F for the Branches use either as a PC letter or as a locally produced advice.  A copy of this advice must be placed on file.  Thereafter, the customary advices will be sent whenever the veteran's service pension is varied.  In respect of cases which will be automatically reassessed there will be no automatic advice as is the current practice.

Rejections

41.In some cases, where a reassessment of service pension is requested by the veteran, it may be that the total amount of superannuation pension is taxable (ie there is no deductible amount ), and therefore the rate of super remains the same.  The veteran should be advised that there is no variation to his pension (Attachment G).

Immediate Annuities

42.Where a veteran's service pension has been increased as a result of the change in the treatment of immediate annuities a special advice must be forwarded which outlines the reason for the increase  (Attachment H refers).

43.Advice must also be forwarded where the service pension has been reduced due to the immediate annuity being held as an asset.(a draft appears at Attachment I).

APPEALS

44.If the veteran appeals against the deductible amount used to reduce his/her income on the grounds that the actual amount of UPP is higher than that held by the Department and provides supportive documentary evidence - eg latest income tax return/ assessment notice/ letter from ATO, this amount will be held in the assessment.

45.For immediate annuities, if the veteran disagrees with the "relevant number" set down by the ATO he/she will be advised to appeal directly to the Commissioner of Taxation, and the ATO number will be maintained in the assessment until advised by the ATO that it has been changed.

GOSPs

46.The GOSPs are currently being amended and should be available shortly.

FORMS

47.Claim forms for Service Pension (SP1/2); Income Assessment Statement form (SP3A); and Income and Asset Statement form (SP3) will be amended shortly and distributed to the Branches when available.

48.New forms D2720 (immediate annuities - Attachment J) and D2721 (superannuation - Attachment K) have been formulated.

These forms are to be used -

.as attachment to SP1;

.as attachment to SP3/SP3A ;

.for distribution to veterans who request a reassessment of service pension, and who have not been supplied with the "schedules of information" from the superannuation fund or life office.

KAY GRIMSLEY

NATIONAL PROGRAM

DIRECTOR BENEFITS

DATE OF ISSUE:  16/5/90

EXCHANGE RATE ADJUSTMENTS TO BRITISH DISABILITY PENSIONS PAID IN AUSTRALIA

Advice has been received from the British Department of Social Security (BDSS) to the effect that the exchange rate to be used for payment of the British component of disability pensions in Australia has been reviewed.

2.The new rate is to be put into effect on payday 14 June 1990.  The exchange rate will vary from $A2.23 to $A2.15 to one Pound Sterling (British pension rates charts are at Attachment C).  The variation applies to the Hong Kong cases and to the EATS and Composite cases.

3.There will be no cases processed automatically.  All cases will be listed for manual examination.

SERVICE PENSION CASES

4.A report will be produced of Service Pension cases with British Pension in payment to enable update of the DP amount for service pension assessment purposes.

5.Action schedules of cases requiring manual examination and variation by examiners will be produced, on 26 May 1990, in groups made up of the following:

Group Content                      Group Reference

.Composite Cases — 100

(with or without SP)

.EATS Cases — 200

(with or without SP)

.Other overseas pensions — 300

(which may be affected).

Groups 300 are to be processed via the PMF update transactions.  Groups 100 and 200 are to be processed via PIPS.

PUNCHING OF TRANSACTIONS FROM "ACTION" SCHEDULES EATS AND COMPOSITE CASES

6.Pay Period Codes

The pay period, namely 25, for the effective date

(14 June 1990) should be entered.  The day within the pay

period field may be left blank.

Keyfast Batch Description

The manual transactions for EATS and Composite cases should be punched using Keyfast batch description $ PENSIO by cutoff for payday 14 June 1990.

CONTROL CARDS AND COMPUTER RUNS

7.Control card formats for computer runs are at Attachment B.  The computer processing timetable is at Attachment A.  Runs according to this timetable will be scheduled by Central Office.

CASES WITH SERVICE PENSION AND OR AN AUSTRALIAN DP COMPONENT TO

BE PROCESSED VIA PIPS  (Group 100, 200)

8.For all cases involving EATS, Composite or service pension, whether automatic or manual method of assessment, the new rate of British pension must be updated on the Client Data Base (CDB) via PIPS.  Due to the change in the British rate, these cases will be "MS" and determined by the delegate, or through manual authority on PIPS only.

9.It will not be necessary to prepare a D408, or equivalent in these cases; the schedule produced for dual SP/EATS/COMP cases to record the changes to the PMF may be used as an authority provided each record on that schedule is endorsed with the consecutive number automatically produced by the Pension Processing System and is signed by the delegate determining the case, prior to transmission to Pension Payments Section.  All such cases can be identified from the manual schedules listed by the ALO2, ALO3 runs (i.e., group 100, 200) and the new British rates should be deducted from the examiners' entries on those schedules.

NOTE:All entries on these schedules must be in Australian dollars.

ADVICES

10.The Advices System will generate an advice in cases where a payment variation is made.  Examiners should action cases in the following manner:

Continuation Cases

Unless the total payment varies the PIPS Advices screen should be accessed and production of an automatic advice suppressed.  The Advice Indicator on the Action Schedule should be set to "Z".

Variation Cases

Where a variation in total payment results the PIPS Advice screen should be accessed and the Suppress Income/Asset List Indicator set to "Y".  This will result in production of a variation advice with no income and asset details.  The Advice Indicator on the Action Schedule should be set to "Y".

CONTACT OFFICER

The contact officer for this exercise is:

RIC MOORE  Phone — 06 289 6214 (BH)

06 282 3913 (AH).

JIM DALTON

ASSISTANT SECRETARY

PLANNING & MANAGEMENT

ATTACHMENT A

TIMETABLE FOR BRITISH DEVALUATION EFFECTIVE 14 JUNE 1990

STAGE 126 May 1990

RUN — PURPOSE

RSPYAL01 — Listing of cases requiring manual action

RSPYAL02(Z cards in CPP.BRITRVAL.CNTL(AL02RUN1)

RSPYAL03

RSPYAL04 — Composite/benefit in file no or alpha order within               composite group order required for NSW Qld (i.e.               use AL run book sort card 5).  Job NPALA23A

OUTPUTS:Listing Journal:  Schedules - use 3 part paper and               double spacing

$PPBBSPR — Report of Service Pensioners with British DP.

THE BENEFITS CONTACT OFFICER WILL BE

RIC MOORE:  (06) 289 6214 Bh

(06) 282 3913 Ah

DATE OF ISSUE:  10 May 1990

EARNINGS CREDIT

BACKGROUND

The purpose of the earnings credit scheme set out in section 49B of the VEA is to allow service pensioners with little or no means apart from the pension to take up paid work without suffering an immediate reduction in pension or loss of fringe benefits.

2.The current formula for accruing credit is calculated by deducting the pensioner's fortnightly income from the relevant fortnightly basic income limit (BIL).

3.It has been seen that this method required simplification, not only to reduce administrative complexity, but to encourage increased usage by pensioners. As pensioners are not obliged to advise the Department of income details below the basic income limit, accurate calculation of the earnings credit for many pensioners is either inaccurate or involves investigation of such income - which is otherwise unecessary.

CHANGES RESULTING FROM 1989 BUDGET

4.From 19 April 1990, the following changes will occur:

.Credit accrual will be standardised for all maximum rate service pensioners. The earnings credit will accrue at the rate of their permissible BIL, regardless of any other income received within and up to that income limit.

-Single pensioners will accrue credit at the rate of $80 per fortnight plus $24 per fortnight for each dependant child (to a maximum earnings credit of $1000);

-Married pensioners will accrue credit at the rate of $140 per fortnight combined, plus $24 per fortnight for each dependant child (to a maximum total earnings credit of $2000, being a combined earnings credit.)

.Asset tested pensioners can no longer accrue an earnings credit. A credit accrued whilst an income tested pensioner can not be retained when a person transfers to an asset tested pension, even if at a later date, that pensioner is again assessed under the income test.

LEGISLATION

5.The definition of a "credit amount" has been altered from the basic income limit less the amount of income received within that limit to the full value of the basic income limit applicable. This has been done by replacing the definition of "credit amount" with new section 49B(1A).

6.A new section 49B(4) has been added to exclude asset tested pensioners from the earnings credit scheme.

PETER HAWKER

NATIONAL PROGRAM MANAGER

BENEFITS PROGRAM

DATE OF ISSUE:  10 May 1990

EXERCISE OF SECTION 31 POWERS

It has come to notice that Determining Officers in the states are reviewing cases under S.31 of the VEA, without any advice to Central Office, while the case is pending at the AAT. Such action puts in jeopardy any strategy which may be pursued in the case, or similar cases, at the Tribunal.

Where a case is pending at the AAT no review under S.31 should be carried out without the prior clearance of either the Assistant Secretary (Compensation and Review) or the relevant Director in the Review Section.

An amendment to section 8.7 of the General Orders Entitlement will be issued in due course.

PATRICK CALLIONI

ASSISTANT SECRETARY

COMPENSATION AND REVIEW

DATE OF ISSUE:23 April 1990

PROCESSING OF SUPERANNUATION CASES RECORDED ON PIPS

INTRODUCTION

1.Instruction B09/90 [40] outlined changes to the the Income Screen (IN) for the recording of Superannuation.  This instruction is to advise Managers and the ADP Group of technical aspects on the new Super Selection programs and how to get them run.  Paragraph 5 is of interest to all examiners.

BACKGROUND

2.With the improved methods for the recording of Superannuation on PIPS, enhancements have been made to allow easier processing of bulk changes for individual superannuation types.  New Super Programs have been developed which allow you to:

-Process updates by tape matching with tapes supplied by the Super fund.

-Obtain a listing of clients for specific Super types.

-Select and process Super types through Keyfast.

-Produce a tape of DVA clients receiving a Super type/s for matching with a Super fund.

3.Action has already been taken to convert the old Super codes to the new codes.  The ability to take full advantage of the improved system is at the discretion of individual Branches.

4.A table of the new codes including descriptions was issued in instruction B09/90 [40].  That listing together with the tables below will be updated as required.

GENERAL SUPER PROCESSING INFORMATION

5.It is now possible to record more than one superannuation entry of the same type for the same client.  For example a client with State super paid as two payments can be recorded under the code for State super on two or more lines of the IN screen.

GUIDE FOR AUTOMATED SUPERANNUATION PROCESSING

SUPERANNUATION FUND TAPE PROCESSING

6.This facility may be used in processing a tape supplied by the Super fund to update income details on the IN screen, and to reassess and update payment details. (It is possible to process more than one tape in a single processing run).

7.At this time the following Super types may be processed in this manner.  You may have other funds included for this type of processing.

State          Super Type      Description

SA — 32 — SA STATE

VIC — 17 — VIC STATE

WA — 38 — WA STATE

If you wish to process a Super Fund Tape which is not tabled then you should contact Benefits ADP Systems at least 8 weeks prior to the proposed effective date.  This will allow time for liaison with the fund managers on appropriate tape formatting.  You will need to supply the name of a technical contact person at the Super Authority so that the format details may be confirmed.  The Benefits contact officer is Ian Fletcher  (06) 282 5494.

8.For Super types included in this table, you should contact Benefits ADP Systems for a 'run date'.  This is to ensure that processing does not clash with other commitments.  Notification of your intentions should be given as soon as practicable so as to avoid delays.

9.Super fund tapes should be clearly marked with the following information before being sent directly to the NCC:

-Processing State

-Effective Date

-Contact Officer

-Super Fund Name

-TAPE LABEL 'SUPRDU##' (where ## is the Super code number)

-"TO BE RETURNED AFTER PROCESSING TO: $$$ BRANCH" ATTENTION: "contact officer".

10.The accompanying explanation sheet (at APPENDIX A) should also be enclosed with the tape with details set out as follows:

Eg: ...to be run on 31/03/90 using the following parameters:

STATE IDENTIFIER:S(N,V,Q,S,W,T)

SUPER TYPE CODE/S:32(up to 99 codes)

PAY PERIOD:21(01 thru 79)

PAY DATE:19/04/90(effective payday)

RUN DESCRIPTION:SA STATE SUPER (prints on top of report)

ALL REPORTS AND FUND TAPE TO BE RETURNED TO SA BRANCH ATTENTION "contact officer"

LISTING OF CLIENTS RECEIVING SUPER TYPE

11.It is now possible to produce a report of those clients recorded on the CDB as receiving payment from a particular Superannuation fund. (More than one super type may be listed if required).

12.To obtain a report a request should be made to the NCC, OIC SHIFT to run job $PPSSELX for your state ($ = N,V,Q,S,W,T).  The following additional information should be included with your request:

STATE IDENTIFIER:(N,V,Q,S,W,T)

SUPER TYPE CODE/S:(up to 99 codes)

SUPER DESCRIPTION:XXXXXXXXXX

ALL REPORTS AND FUND TAPE TO BE RETURNED TO $$$ BRANCH ATTENTION: "contact officer"

KEYFAST SUPERANNUATION PROCESSING

13.For all states except WA and TAS, you may process superannuation transactions entered through KEYFAST (WA and TAS may use Keyfast but must request the facility be set up).  It may first be necessary to obtain a report (as set out above) of clients to be processed.

14.Once the transactions are entered through Keyfast, the following ADP MESSAGE should be sent to the NCC, OIC Shift.

"Please run schedule 9.4.2 Superannuation KEYFAST Processing of the Automatic Reassessment Processing Operations Guide to run on the 31/03/90 using the following parameters:

STATE IDENTIFIER:S(N,V,Q,S,W,T)

SUPER TYPE CODE/S:32(up to 99 codes)

PAY PERIOD:21(01 thru 79)

PAY DATE:19/04/90(effective payday)

RUN DESCRIPTION:SA STATE SUPER(prints on top of report)

ALL REPORTS AND FUND TAPE TO BE RETURNED TO SA BRANCH" ATTENTION: "contact officer".

PRODUCE TAPE OF DVA SUPER CLIENTS

15.This process may be used to produce a tape of those clients recorded on the CDB as receiving a payment from specified superannuation fund/funds ( a single run may be used to produce tapes for different funds).

16.At this time the following Super types may be processed in this manner.  You may have other funds included for this type of processing.

State          Super Type     Description

TAS — 40 — TAS STATE

If you wish to produce a Super Fund tape which is not tabled then you should contact Benefits ADP Systems at least 8 weeks prior to the proposed effective date .  This will allow time for liaison with the fund managers on appropriate tape formatting.  You will need to supply the name of a technical contact Person at the Super Authority so that the format details may be confirmed.  The Benefits contact officer is Ian Fletcher  (06) 282 5494.

18.To obtain tape of selected clients you should request the NCC, OIC SHIFT to run job $PPSTAPE for your state ($ = N,V,Q,S,W,T).  The following additional information should be included with your request:

STATE IDENTIFIER:(N,V,Q,S,W,T)

SUPER TYPE CODE/S:(up to 99 codes)

FORMAT:REEL TAPE / CARTRIDGE

SUPER DESCRIPTION:XXXXXXXXXX

DATE TAPE TO BE PRODUCED:dd/mm/yy

CONTACT OFFICER:XXXXXXXXXXXXXXXXXXXX

TAPE TO BE SENT TO $$$ BRANCH, ATTENTION "contact officer"

19.The contact officer for this instruction is Ian Fletcher who may be contacted on (06) 282 5494.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

APPENDIX A

SUPERANNUATION FUND TAPE PROCESSING

Please run schedule 9.4.1. Superannuation Fund Tape Processing of the Automatic Reassessment Processing Operations Guide to be run on ...................................using the following parameters

              STATE IDENTIFIER:

              SUPER TYPE CODES:

              PAY PERIOD NUMBER:

              PAY DATE:

              RUN DESCRIPTION:

PLEASE RETURN ALL REPORTS AND FUND TAPE TO..............................................BRANCH

ATTENTION:

DATE OF ISSUE:  23 April 1990

STATUTORY PENSION INCREASE 14 JUNE 1990 ADP PROCESSING

1INTRODUCTION

1.1 — Changes for the 14 June 1990 Statutory Increase involve variations because:

.Basic Assets Limits have been increased.

.Increase of $10 per fortnight for Rent Assistance.

2GENERAL OPERATIONAL OUTLINE

2.1 — The processing for pension rate changes will be divided into groups of those cases which will be processed automatically and those cases which will require manual action.

2.2 — The ADP and associated Branch Office processing is discussed in the following sections.  A broad timetable of events and Scheduling dates are included at Attachment 1.

2.3 — A program to select only those cases affected by the Assets Test and Rent Assistance will be run initially.

The selection program will process only those cases affected and so all other cases will not have the Prescribed Asset Limit increased.  This will cause no real problems as the limit will increase when the case is actioned or at the next full Statutory Increase.  Special steps will be taken prior to the Property Revaluation run in August.

2.4 — For the 'SERVICE PENSION PROCESSING' income/assets details and personal assessment particulars held on the CDB will be referenced for the automatic reassessment of pension and preparation of variation transactions for update of the PMF.

3SPECIAL FEATURES AND SUGGESTIONS

3.1PMF Update/On-line System

Processing will be undertaken over the weekend 26/27 May 1990.  THE LATEST AVAILABLE PMF UPDATE WILL BE FRIDAY 25 MARCH, at 5.00pm SYDNEY TIME.  Neither the on-line Pension Processing system (IDPS/PIPS) nor the Pension Payment update facility will be available over the weekend.

3.2Pre Increase Action

It is suggested that the following steps be undertaken prior to computer runs for the SI to help processing progress as smoothly as possible:

.Minimise the number of cases (with RA or on Assets Test) in "frozen" status (SB or PY status).

.Arrange an early cut-off (say one week) for processing of cases requiring 'MS' submissions by pension examiners to allow time for those cases to be received and actioned by Pension Payments.

.Clear outstanding 'MS' cases.

.Resolve any SP Compare reconciliation edits.

.Arrange a cut-off date one or two days before automatic processing commences for final automatic authorities to Pension Payments.

3.3Trial Assessment Facility/War Pension Code File

The new Trial Assessment facility with the new SI rates and other assessment changes will be available shortly.

3.4Limitation Cases

Cases for which limitations are in force will have pension increased automatically, but the limitation amount will not be adjusted.  Identification of these cases and adjustment to the limitation amount must be arranged locally.

3.5Processing Problems

Should any problems arise with either the automatic processing system or the procedures outlined, they should be advised to Central Office immediately.  The contact officer at Central Office is Ric Moore on telephone

(06) 282-5491 (bh) or (06) 282-3913 (ah).

4.PENSION RATE CHANGES

4.1Basic Assets Limits

Basic assets limits have been increased as follows:

Homeowners             Old Rate       New Rate

"Standard" Veteran$ 96,000$103,500

"Married" Couple - each$ 68,500$ 73,750

"Married" Wife/Widow$ 68,500$ 73,750

Non Homeowners          Old Rate       New Rate

"Standard" Veteran$164,500$177,500

"Married" Couple - each$102,750$110,750

"Married" Wife/Widow$102,750$110,750

4.2Rent Assistance

Rent assistance has been increased as follows:

Per Fortnight             Old Rate       New Rate

"Standard" Veteran$  40.00$  50.00

"Married" Couple - each$  20.00$  25.00

"Married" Wife/Widow$  40.00$  50.00

Addition for 1 or 2 Children$  10.00$  10.00

Addition for 3 or more

Children$  10.00$  20.00

Example:

Veteran + wife + 4 children — RA  =  $70 per fortnight

4.3 — The increases to service pension and allowances will be effected automatically on the PMF wherever possible by program APPBAL.  Reports and schedules will be produced to enable manual reassessment of cases which cannot be processed automatically.  APPBAL will also generate pension payment transactions for automatically processable cases.  Cases listed for manual action will need to be processed through PIPS before cut-off for payday 14 June.

5OUTPUT

5.1Output From Program APPBAL

The cases which cannot be processed automatically will be reported on schedules for manual action.  Manual cases are:

.Frozen actions (i.e. cases in 'PY' or 'SB' Status).

.PMF/CDB incompatible cases.

.Manual methods of assessment (excluding Working Rule B).

.Cases suspended on the PMF.

.Manual disability pension cases.

.Assessment errors.

Other schedules which may be produced are:

.Last SI not processed.

.Old SI process codes deleted.

.Manual arrears cases.

.Data base errors detected.

.Transaction generation error schedule.

6PROCESSING

6.1Processing of manual cases:

28 May to cut-off for payday 14 June 1990.

The processing of manual cases should be done in the above period and cases are to be processed through IDPS/PIPS.  Cases listed for manual action should be reassessed using the SI rates, updated through an action record, a D2650 produced, or a D408 or other coding sheet produced to effect the PMF variation.  If coding is done on an action schedule, the consecutive number for the IDPS/PIPS action should be noted on the schedule.

6.2Frozen Actions - when cases in 'PY' or 'SB' status are encountered by the SI program, update is prohibited because the record is 'frozen'.  The cases need to be 'unfrozen' and re-processed as follows:

.Return case to 'RI' status (by using 'Cancel Determination' and 'Cancel Submission' as appropriate).

.Re-process case using the SI as the last variation (if effective date is prior to the SI date enter arrears line for effective date).

.Submit to 'MS' or 'DA' as appropriate and prepare D408 in 'MS' cases.

.Determine case as per normal.

6.3PMF/CDB incompatible cases - cases will need to be investigated to determine the cause of the discrepancy, then the CDB or PMF corrected as necessary before the SI action can be processed.  The discrepancies will normally relate to people/suffixes on the CDB and PMF.

6.4Manual Methods of Assessment - cases need to be manually re-assessed and processed through the system as normal.  Where a case involves a suspension or a manual DP component, it should be processed through an MS submission and a D408 raised to record the manual coding.

6.5Keyfast Description - MS (multiple segment) and manual transactions should be transmitted to the Computer Centre in the normal pension payment daily stream i.e. keyfast description $ PENSIO, prior to the cut-off for payday 14 June.

6.6Cases Suspended on the PMF - where a service pension, "Other" or Total suspension occurs on the PMF, the SP rate and suspension rate should be re-assessed, the case processed through an 'MS' submission and the rates varied as necessary.  The schedule is produced in 'PMF transaction' format and should be used to code the adjustments.  The schedules should be endorsed with the 'MS' consecutive number generated by the system, and be signed by the Delegate - this obviates the need to prepare a D408 for these cases.

6.7Manual DP Recorded on the CDB - this schedule lists in 'PMF transaction' format cases with the following 'DP codes' on the CDB.

.EATS.

.COMP (Composite/Proviso 'c').

.DIV 10 (Members of the Defence Force).

.MAN, MISC, CONVERSION DATA  (Note: these are no longer valid codes, but may still exist if the case has not been correctly coded following Conversion).

The DP should be examined, the new rates entered through the DPEN format, and the case submitted through 'MS'.  Rates of both SP and DP should be varied on the schedule.

The schedules should be endorsed with the "MS" consecutive number generated by the system and signed by the Delegate - this obviates the need to produce a D408 for these cases.

6.8Assessment Errors - the assessment routine will produce information messages as an indication that certain action should be taken as a result of the re-assessment. These cases should be examined and modified as necessary, as well as processing the SI increase.

Note -Where "QA" data exists on a case which is processed manually, care should be taken to ensure that the assets data is recorded correctly because the "QA" data will not be copied into the action assessment.

7INFORMATION/SUPPLEMENTARY PROCESSING SCHEDULES

7.1 — A number of conditions may exist on the CDB which require additional investigation beyond the normal SI processing.  The cases listed will already be "autoprocessed" or will appear for action on the schedules.  The conditions are detailed below:

.Last SI not processed - the case was not processed in the last SI that effected the case.  Check the case to ensure that appropriate A/L or SI action was taken.

.Old SI process codes deleted - before any SI processing takes place, any old SI process code (S183) will be deleted.  Action on these will depend on the reason the old process exists, but most will not require any corrective action.

.Manual arrears cases - cases where the current effective date is in advance of the SI date.These cases need to be examined to ensure that any adjustment for the period between the SI date and the current effective date is made.

.Data Base Error detected - these cases will 'fail' SI processing, and should be referred immediately to ADP for action.

.Transaction Generation Errors - the equivalent of Interface errors in normal daily production.  Corrective action is the same as for Interface errors.

7.2 — Service pension cases submitted to 'MS' should be transmitted to the computer centre via the normal pension payment daily stream.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

ATTACHMENT 1

STATUTORY INCREASE - 14 JUNE 1990

TIMETABLE OF EVENTS - GENERAL

26/27 May 1990 — Reassessment for all CDB records where MOA is "automatic".

26/27 May 1990 — Automatic update of service pension segments on the PMF               except for those cases listed in part 5.3 of these procedures.

26/27 May 1990 — Reconciliation run on all variations to either the PMF or CDB.

From 25 May — Examiner action on manual SP and DP schedules.

to cut-off for

payday 14 June 1990.

PROCESSING SCHEDULE

The Benefits Applications Branch will provide the NCC with a detailed processing schedule.

The Benefits contact officer for this exercise is:

RIC MOORE(06) 282 5494 (BH)

(06) 282 3913 (AH)

DATE OF ISSUE:  19 April 1990

MANAGED INVESTMENTS - AUTOMATIC PROCESSING

PURPOSE OF THIS INSTRUCTION

The purpose of this instruction is to outline the operational arrangements related to automated reassessment processing for managed investments.

INTRODUCTION - PRIMARY OBJECTIVE

2.As you are aware, the primary objective of Phase 2 of the managed investments project is to provide the capability to automatically reassess service pensions where managed investments are held in the veterans' financial record and data relating to those managed investments alters.

PROCESSING CATEGORIES AND ELEMENTS

3.The broad objective has been sub-divided in order to describe the categories and elements associated with managed investments because different arrangements apply to each.

4.The sub-divisions are:

4.1. reassessment of individual Market Linked Investment

(MLI) products;

4.2. reassessment of cases where management fees are involved;

4.3. reassessment of SELECTED individual Accruing Return Investment (ARI) and other products;

4.4. periodic bulk reassessment of service pension for every veteran who holds a managed investment of any type.

HOW THE ADP PROGRAMS WILL OPERATE

5.The assessment programs to process MLI rate of return variations and fee changes will be run fortnightly as a routine arrangement. The fortnightly routine can be interrupted so as not to conflict with major exercises such as CPI adjustments etc.

MLI's

6.Where the product rate of return is varied on the DVA managed investment data base following a decision by DSS to alter the MLI rate, the selection program will search on the CDB to check whether that particular MLI is recorded in any veteran's assessment.

7.Where a match is found, the program will compare the MLI rate of return recorded on the managed investment data base with that recorded on the veteran's financial record.  Where a difference is identified, a reassessment will take place.

MLI's  -  Date of Effect

8.The decision made by DSS in relation to the MLI rate of return usually has a retrospective date of effect.  Whilst the date of effect for an MLI rate change is the date advised by DSS i.e. the effective date of the DSS decision, service pension would be varied from the payday following that date.  Should reassessment result in a reduction of service pension, the effective date for  the reduction will be the "convenient reduction date".

MLI Arrears

9.Where appropriate, and if it is possible to do so, the reassessment program will automatically calculate MLI arrears.

*PLEASE NOTE: The fortnightly selection/comparison process will apply to MLI products which have been data collected since the implementation of Phase 1 in August 1989.

*That means that there may be cases which were data collected in the early days of Phase 1, but which have not had the rate of return refreshed. That may have occurred because those cases have not come up for review, the veteran has not notified a varied rate of performance, the MI screen has not been accessed, or a refresh of all managed investments recorded for a case has not been carried out although processing for that case has occurred.

*In those circumstances, the rate of return on the pensioner's financial record will not match with that recorded on the managed investment data base. Moreover, the rate will almost certainly have an effective date prior to the most recent SI.  Where such cases arise, they will be listed for manual processing in line with PIPS constraints whereby effective dates which precede a SI cannot be handled automatically.

Fees

10.Each fortnight the program will search for cases where fees are involved with a managed investment, and a fee amount is being disregarded as income in the service pension assessment.  That procedure is in line with the provision that allows the reasonable cost of management fees to be deducted from income over the first year of ownership of a managed investment.

11.Where the program detects that the twelve month anniversary of the date of acquisition of the managed investment is approaching, it will reinstate in the assessment, income equal to the cost of the fees which were being allowed as a deduction.  A reassessment will then occur.

Fees  -  Date of Effect

12.The date of effect for the cessation of a fee amount as an income deduction will be the payday following the anniversary of the date of acquisition of the managed investment.

NOTE 1: The date of effect is in line with recent Budget changes which brought DVA into line with the DSS principle of effecting variations to service pension and associated allowances.

NOTE 2: For some veterans, a change in both fee details and a rate of return may apply in the one reassessment for the same payday.  The two elements of the reassessment will be separately identified for advice purposes.

SELECTED ARI's

13.The capability has also been developed to allow for the selection ("flagging") and reassessment of Accruing Return Investments (ARI"s) where special or extraordinary circumstances apply e.g. receivership, extreme fluctuations in performance.

14.Where a change in any data i.e. rate of return, CPU or buyback, for a product has been recorded on the managed investment data base, and such a product has been selected and `flagged' by the IPO in Sydney for inclusion in a fortnightly reassessment run, the selection program will search on the CDB to check for veterans whose financial records contain these products.

15.Where one or more `flagged' products are found in a veteran's record, the program will compare the product data in the record with that recorded on the managed investment data base.  Where a difference is identified, a reassessment will occur.

Date of Effect

16.Where a data change for ARI's is "flagged" on the managed investment data base for the purposes of an automatic reassessment run, the date of effect will be the payday for which the automatic run is processed. In other words the variation would be effective from a convenient reduction date and no arrears will be payable.

GLOBAL RUNS

17.`Global' reassessment runs may also be undertaken when considered necessary.  Such `runs' would carry out a bulk reassessment of every case where a veteran has a managed investment of any type. The "global" runs will be limited to once or twice a year.

How the Program Will Operate

18.The selection program will search on the CDB for all veterans whose financial records contain any managed investments for which a change in product data has been recorded on the managed investment data base.

19.Where a match is found, the program will compare the product data recorded on the managed investment data base with that on the veteran's assessment.  Where a difference is identified, a reassessment will occur.

Date of Effect

20.The effective date for reassessment of service pensions due to a "global" run for managed investments will be the date of a convenient reduction date with no arrears processing. These runs follow the same arrangements as those set in place for runs for ARI's.

PROCESSING AND REPORTING

21.Where a variation to the pension rate occurs as a result of an automatic reassessment, an advice will be generated automatically. In addition, reports, in schedule form, will be produced.

22.The reports will generally be similar to those currently generated for other automatic processing `runs'.

23.Where no variation to the service pension rate occurs, no reporting takes place.  The case will be updated with the latest product data but no further action occurs.

POLICY AND ADMINISTRATIVE RULES FOR INITIATING THE SELECTIVE REASSESSMENT OF INVESTMENTS AND `GLOBAL' REASSESSMENT RUNS

24.Policy and administrative rules need to be set for deciding in which circumstances and when both the global `runs' should occur, and the inclusion of certain products for reassessment in a fortnightly `run' should take place.  Further contact will be made with the IPO in each Branch Office in regard to these arrangements, so that the policy and procedures can be agreed to at both Branch and Central Office level, and documented for distribution.

TIMING OF REASSESSMENT RUNS

25.Timings related to managed investment reassessment runs will need to be coordinated so that they are undertaken in accordance with the usual lead time to enable any manual cases to be actioned in line with the cut-off for the relevant payday.

THE FIRST AUTOMATIC REASSESSMENT RUN

Timetable

26.The first automatic MLI and fee change reassessment run is scheduled for payday 17 May 1990.

27.Case selection and actual reassessment of `automatic' cases is scheduled for weekend 28/29 April. Appropriate reports should be in your Branch office on Monday 30 April 1990.

PLEASE NOTE: The plan is to run the reassessment for payday 17 May as a "one-off" exercise. The purpose of that is to ensure that thesystem operates correctly in the production environment, as well as to provide the Branch Offices with an opportunity to tidy up the sizable number of manual cases which will flow from this run. Following that, the reassessment will be reinstated at a later payday as a routine fortnightly reassessment run.

Outputs From the Program - Manual Cases

PLEASE NOTE:  All cases listed for manual examination will have an action record recorded on PIPS.  Initially it will have the classification of `Over 70'.  If the case is not processed by the cut-off, the case will again appear on the next list of manuals, but the action record will show one outstanding action only, generated as a result of the latest run.  The case could be left outstanding indefinitely, and the action record would always show only as a result of the latest run.

28. Cases which cannot be processed automatically will be reported on schedules for manual action.  The majority of manual cases are those which are routinely generated as a result of standard PIPS constraints e.g.:

28.1 — frozen actions (i.e. cases in `SB' or `PY' status),

28.2 — manual methods of assessment,

28.3 — cases suspended on the CDB,

28.4 — the effective date of the current action precedes the effective date of the most recent Statutory Increase (SI).

29.For the initial run, cases listed which are to be processed for manual action for payday 17 May will need to be through PIPS prior to the cut-off for that payday.

30.The method for processing the routine manual cases from PIPS is well documented in the SI Departmental Instructions which are published regularly, and it is, therefore, considered unnecessary to include those steps in this instruction.

31.Notwithstanding that, there may be some additional manual examination and processing of cases as a direct result of circumstances related to managed investments.  These are:

31.1 — a product recorded for a veteran is `closed' and proceeds distibuted. Such a product should no longer be recorded in an assessment, and it may be necessary to contact the veteran to ascertain what has become of the investment and the proceeds.

31.2 — a product recorded for a veteran is `closed' due to being `cross referenced'.  The product recorded must be deleted from the assessment and the investment data collected under the new name

31.3 — a product type of `U' (unknown) is converted to a product type of `S' (special).  The product data entered would need to be checked, and may require alteration.

31.4 — a product type code of A,B,C,M, or S is changed. The implication of the type code change on the assessment of the product would need to be considered; an alteration to data may be required

32.The above situations are complex and therefore difficult to automate.  Whilst there will be a number of manual cases generated due to circumstances related to managed investments, the workload relating to manual processing will stem mainly from routine manual PIPS cases.

33.The following schedules are currently routinely produced following every type of automatic bulk processing and will also be generated for managed investment exercises:

.suspension report.processing report

.fringe benefit change.manual moa cases

.cancellation report.last A/L report

.veterans deceased.arrears report

.frozen report.summary reports

34.A further report titled `alterations affecting amounts' will be helpful to you in establishing the applicable service pension rate at the time of automatic reassessment should a subsequent action apply and the effective date of the subsequent action is prior to the effective date of the automatic reassessment.  Steps to follow when processing a subsequent action, where use of these schedules is involved, are outlined on the last page of your Managed Investments Operator Guide.

SAVINGS/COSTS

35.Included in the reports produced are two entitled "Summary Sheet Special Process Run" and "Pension Payments Summary of Update". These show the variation totals for each run. They will be the means by which the cost or savings generated by each run can be measured.

36.Those reports should be retained by the Investment Policy Officer following each run, so that information can be collated for, say, quarterly or six-monthly reporting in relation to the effect of the reassessments.

37.The "Fringe Benefit Change Report" should also be retained for information purposes.

38.The "Summary Sheet Special Process" report maintains the effect of the reassessments until the next run takes place. The details then change with effect from the later run.

39.The "Pension Payments Summary of Update" report includes one-time arrears amounts. The arrears amounts should not be included when reporting on savings.

40.It will also be necessary to keep a record of pension rate and fringe benefit eligibility changes in respect of the manual reassessments so that they can be added to the automatic results in order to complete the full outcome in relation to the particular run.

ADVICES

For The Initial Run For Payday 17 May.

*PLEASE NOTE: For the initial run for payday 17 May, the CURRENT PENSION PAYMENT ADVICES will be generated for both automatically reassessed and manually processed cases and the usual supplementary advices e.g. obligation letters, Treatment entitlement, health card letters are to be sent.

*The reason contained in the CURRENT ADVICES notifying of variation to service pension will be expressed as ..... "Your service pension has been varied due to managed investment(s) changes.....".

For Runs Undertaken After 17 May Where Cases Are Reassessed Automatically

41.For cases reassessed automatically, an automatic advice will be generated in line with advices developed under the `Benefits Letters Production System" project.

42.The automatic advice will list the latest managed investment information held on the pensioner's record.  Where there is more than one reason for a reassessment e.g. an MLI rate change and a fee deduction ceasing to apply, the advice will include a separate paragraph for each reason.

For Runs Undertaken After 17 May Where Cases Are Processed Manually.

43.For cases processed manually, a manual advice, as developed in line with the `Benefits Letters Production System" project, will need to be prepared and despatched.

CONTACT OFFICER

44.The contact officer at Central Office for further inquiries is  Chris Lee, Income Support, telephone 06 2825194.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR (BENEFITS)

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.

DATE OF ISSUE:  03 April 1990

METHOD OF CALCULATING PENSION PAYMENT PERIOD

INTRODUCTION

With effect from 28 December 1989, the method of calculating the payment of pension and allowances at a daily rate, paid fortnightly in advance, has been replaced by the method used by the Department of Social Security. The change means that a full fortnightly instalment of pension and/or allowances is payable to a pensioner who is alive and eligible on that particular payday. This applies to all pension and allowances except the Victoria Cross Allowance, Loss of Earnings and Temporary Incapacity Allowance.

REASONS FOR CHANGE

2.It is intended that this change should simplify the administrative process when service pensioners transfer between the Departments of Social Security and Veterans' Affairs. This should subsequently reduce the number of overpayments and the intrusion caused by recovery at a time of bereavement. It also simplifies the calculation of initial pension payment, specifically arrears, and ensures consistent treatment of pensioners by the two Departments.

EFFECT OF THE PENSION PERIOD CALCULATION CHANGE

3.The effect of this change to the method of calculating a pension payment period is that where the date of effect is on or after 28 December 1989, pension payments must be effective from a payday. Where the date of effect is prior to this change, pension payments may still commence on any day regardless of whether or not it is a payday. Amendments have been made to sections 5 and 121 of the VEA.

Grants of service pension.

4.For those who lodge an application (formal or informal) or become eligible for service pension and allowances on or after 28 December 1989, the date of grant of pension should be from the payday following lodgement of application or payday following date of eligibility, ie. payday after 60th birthday or ceasing work. The amount of pension payable from the date of grant will constitute a full instalment.

Grants of disability pension.

5.Where the entitlement date of a grant of Disability Pension or War Widows' Pension is on or after 28 December 1989, the pension is payable from the payday after the entitlement date, or, if the entitlement date falls on a payday, then pension is payable from that date. As for service pensions, a full instalment is payable from the date of grant.

6.It may therefore be necessary for Determining Officers, etc. to include in their decisions a statement advising that Disability Pension will be granted/increased from the payday after the entitlement date.

Exceptions to entitlement date commencing on a payday.

7.Temporary Incapacity Allowance and Loss of Earnings Allowance are generally payable in respect of a period which has already lapsed and therefore are not included in these changes. Section 5(14) of the VEA is presently being amended to ensure that existing payment arrangements continue to apply to these allowances.

Recreation Transport Allowance.

8.Payment of Recreation Transport Allowance (RTA) is processed differently in each state, therefore the effect of the pension payment period calculation change on these payments also differs. Ultimately, emphasis must be placed on ensuring that, regardless of the regularity of payments, RTA must be paid in respect of those paydays on which the pensioner was alive and eligible to receive that allowance.

9.It is hoped that work will begin in April 1990 to pay RTA payments automatically each fortnight.

Twelve Month Rule.

10.Any variation in service pension rate due to income being maintained in the pension assessment for a period of 12 months must be effective from the payday following the date of receipt or the date on which the person became entitled to receive that money, whichever is the earlier.

11.This income should be maintained in the assessment for a period of 12 months, or if that 12 month period does not end on a payday, then for a maximum of 26 paydays.

Deprived Income and Assets.

12.As with the 12 month rule above, deprived income or assets must be maintained in the assessment from the payday after the deprivation occurred. This will be maintained at that same rate for 26 paydays, then reduced by 10% annually as per existing guidelines.

13.Where deprivation occurred prior to 28 December 1989, then the date on which the amount is reduced will not be the actual 12 month anniversary (unless it falls on a payday), but the payday prior to the anniversary.

Increases, reductions, suspensions, cancellations of Pension and Allowances.

14.All variations to the rate of pension and allowances effective on or after 28 December 1989 should take effect on a pension payday. Some of those situations where the date of effect is currently other than a payday, include:

-increase of service pension and allowances where advice is received in advance;

-grant of service pension and allowances;

-grant or variation, suspension or cancellation of war widows' pension, disability pension and allowances;

-date of operation of decisions made by the VRB or AAT;

-reduction in rent assistance due to disability pension grant or increase;

-overpayments occurring on or after 1 November 1985;

-loss of eligibility, eg. remarriage of a widow, de facto wife separates from veteran, child's 16th birthday;

-discharge from a benevolent home;

Education Allowance.

15.Payment of Education Allowance would normally cover the period 1 January to and including 31 December in any one year. Following the payday calculation change, these dates of effect must fall on a payday. Therefore, for example, 1990 Education Allowance payments should commence on 11 January 1990 to and including payday 27 December 1990, being 26 paydays. In those calendar years containing 27 paydays, the 27th payment should also be paid.

EFFECT ON TREATMENT AND FRINGE BENEFIT ELIGIBILITY.

Grant.

16.Although pensions and allowances will now be payable from the payday after the date on which the pensioner becomes eligible for pension, the provision of treatment and entitlement to fringe benefits will still begin from the day of eligibility.

Loss of eligibility.

17.Where pension is cancelled due to the pensioner losingeligibility, fringe benefits and the entitlement to be provided with medical treatment will also be cancelled on the same payday.

Period of Grace.

18.Since 1 January 1988, certain categories of service pensioners receive the benefit of a 13 week period of grace before fringe benefits entitlement ceases. In such cases, where the period of grace ends after 28 December 1989, fringe benefits should cease from the next payday not covered within that 13 week period of grace, ie. after 14 weeks. The support documentation will show the date on which the period of grace ends, but the advice to pensioners should explain that although the period of grace is unchanged, fringe benefits will cease from the next payday.

TRANSFERS BETWEEN DVA AND DSS

19.Where a pensioner wishes to transfer from DVA to DSS, or vice versa, the arrangements are usually made directly by officers from each Department. Currently where a pensioner transfers to DVA, this Department commences payment of service pension from the day following the payday on which DSS make their final payment.

20.The effective dates when a DVA pensioner transfers to DSS are slightly different due to DVA paying pension based on a daily rate. Therefore, DVA could pay pension on a payday which covered the 14 day period from that payday to and including the day prior to the next payday. DSS could therefore commence their payments from one of their paydays and DVA could pay pension for the odd days between the last full DVA payment and the date DSS commence payment.

21.Following the changes to the calculation of DVA pension payment periods, from 28 December 1989 the procedures and dates used when transferring pensioners between Departments have also been reviewed. The DSS approach of paying a pension instalment to a pensioner who is alive and eligible on a payday has been adopted.

22.This is shown in the following example where a pensioner transfers from DVA to DSS.

In Advance: DVA pensioner transferring to DSS.

DSS

(DOG)

4/1 — 18/1 — 1/2 — 15/2

_|_________|_________|_________|_________|_________|__________|

  |                  |                  |                  |                  |                  |

11/1      25/1 — 8/2

   (DLP)     (CANCEL)

25/01/90  DVA date of last payment;

01/02/90  DSS anticipated date of grant;

(Nil adjustment).

Date of effect on authority would be 8/02/90

(SP cancellation).

This example works exactly the same in reverse, when a pensioner transfers from DSS to DVA (a second example is therefore not necessary).

23.Most transfers are arranged in advance as shown in the previous example. There are, however, some situations where a transfer is done in arrears, ie. where the granting Department can pay a higher rate of pension. In these cases the only rule is that the granting Department must make their first regular payment on a payday after the cancelling Department's date of last payment. This ensures that there are enough arrears to cover the overpayment.

In Arrears: DVA pensioner transferring to DSS.

DSS

(DOG)(1st REGULAR)

4/1 — 18/1 — 1/2 — 15/2

__|_________|_________|_________|_________|_________|________|__

    |      |           | |      |                              |

11/1 — 25/1 — 8/2

(DLP)(CANCEL)

DVA 18/01/90  DSS date of grant; 25/01/90  DVA date of last payment; 01/02/90  DSS date of first regular payment*

DVA overpayment:  25/01/90 DSS arrears:18/01/90

* Remember, DSS must make their first regular payment on a payday after DVA's date of last payment to ensure there are enough arrears to cover the overpayment.

The authority, in this case, would contain 2 effective dates:

25/01/90  SP rate --> NIL  (to raise the overpayment)

08/02/90  SP rate --> NIL  (to actually cancel SP).

Again, this example works exactly the same when a pensioner transfers from DSS to DVA.

24.Although these procedures result in the pensioner receiving two instalments of pension within a fortnight, it replaces the practice of DVA granting a pensioner transferring from DSS on the day after DSS made their final pension payment.

25.This second pension instalment paid within the one fortnight is not considered an overpayment as DVA pension is no longer calculated on a daily basis and paid fortnightly in advance. Instead, an instalment of pension is payable to a pensioner who is alive and eligible on that payday.

26.Procedures for liaison with DSS differ in each branch office and will therefore remain the responsibility of the branches. DSS Central Office has been advised of the changes and should notify their regional office staff. It may be helpful to be aware, when dealing with a DSS officer regarding a transfer, that they may not yet be fully briefed on these changes.

SYSTEMS

27.Some system changes have been made to accommodate the differing dates for pension grants and the commencement of fringe benefits or treatment entitlement.

Service Pensions:

28.Assessment Control (PP.AC) will allow a date of effect prior to 28 December 1989 to be any date, but for a date of effect on or after 28 December 1989, will only allow a DVA payday.

29.Arrears and Tax screens (PP.AR and PP.TX) will restrict the input of dates to those applicable to AC as above.

30.Historic Dates screen (PP.HD) will now play a greater role. A restriction will be placed on the date of grant of service pension and/or allowances field to allow only a DVA payday on or after 28 December 1989 to be entered.

31.Dates of effect for full treatment and fringe benefits will be unrestricted. Therefore, this screen is the one which will set the different dates for commencement of full treatment or fringe benefits and the commencement of pension grant.

32.The current edit that does not allow the date for full treatment and fringe benefits to be prior to the service pension grant date will be removed.

33.Where there are no arrears lines in the assessment, the date of commencement of full treatment or fringe benefits on the HD screen will default from the AC screen. This date will actually reflect the date of commencement of pension grant and therefore must be overwritten and replaced with the earlier date.

34.Submission (PP.SU) will allow only DVA paydays on or after 28 December 1989 as valid effective dates. Dates prior to 28 December 1989 will continue to be valid regardless of whether or not they are on a payday.

Disability Pensions:

35.The current procedure when accessing the Claims Management System (CMS) to process a disability pension grant or variation will remain unchanged. The date of eligibility for treatment or fringe benefits will be the date recorded under the CMS, which then defaults to the PIPS system. The AR screen will then be used to record the payday from which payment should commence.

36.The same restriction as previously explained for the Arrears and Submission screens will apply.

LEGISLATION

37.The definition of pension pay day has been included in Section 5(1) of the VEA and reads:

"`pension pay day' means:

(a)the Thursday falling on 28 December 1989; and

(b)each succeeding alternate Thursday."

38.The VEA currently still refers to many dates of effect which are not paydays, therefore the following Section 5(14) has been added:

"Where a determination has been made under this Act that a pension or allowance is payable as from a particular day (in this subsection called the `day of effect') that is not a pension pay day, the pension or allowance is payable on and from the next pension pay day after the day of effect."

39.Subsection 121(1) of the VEA (Instalment of pension) has been omitted and replaced with the following:

"A fortnightly instalment of pension is payable to a person on each pension pay day on which the person is entitled to receive pension.

(1A) "Where a person becomes entitled to receive pension on a pension pay day that occurs before the day (in this subsection called the `entitlement day') on which, but for the operation of subsection 20(1) or (2), 21(2) or 46(3), the person would have become entitled to receive that pension, any instalment of that pension that, but for this subsection, would have been payable to the person on that pension pay day is payable to the person:

(a)if the entitlement day is a pension pay day -on the entitlement day; or

(b)in any other case -on the first pension pay day after the entitlement day."

40.Subsection 121(5) has been omitted and substituted with:

"In this section: `pension' includes an allowance under this Act, other than Victoria Cross allowance."

PETER HAWKER

NATIONAL PROGRAM MANAGER

BENEFITS PROGRAM

DATE OF ISSUE:  27 March 1990

BRITISH PENSION INDEXATION

Introduction

From 9 April 1990 the British Government, in line with their Retail Prices Index, will be applying a 7.6% increase to the National Insurance Benefits paid by them.  This increase affects two categories of pensioners paid by this Department:

a)Service pensioners in receipt of British Department of Social Security Pension who live in any country other than Australia, Canada, or New Zealand, and

b)Service pensioners in receipt of a British Indexed Pension (ie Navy, Teachers etc) regardless of the country of residence.

Method of Processing

2.In order to reassess these pensions it will be necessary to examine all cases with superannuation payments recorded under type 08 (British Retirement Income) or 99 (Indexed Miscellaneous Superannuation).

3.Where a pensioner with a British Department of Social Security Retirement pension is living in any country other than Australia, Canada or New Zealand, the 7.6% increase should be applied and the pension varied accordingly with an effective date of the first convenient payday after 9 April 1990.  The pension should then be recorded as superannuation type 09 (British Indexed Pension).  Any case recorded as superannuation type 09 can be auto increased next year.

4.Please note that Service pensioners who receive British Department of Social Security pension and are holidaying in any country, with the exception of Canada and New Zealand, are eligible for the increase and should be registered as in receipt of 09 superannuation type for the period of their holiday.  On their return to Australia these pensioners should be re-registered as superannuation type 08.

5.Service Pensioners in receipt of a British Indexed Pension (ie Navy, Teachers, Police etc) will have their British pension increased regardless of the country of residence.  These pensions may currently be recorded as either 08 or 99.  All such pensions should be reassessed with an effective date of the first convenient payday after 9 April 1990 and re-recorded as 09 (British Indexed Pension).

Statistical Recording

6.All reductions in pension payments from these cases can be credited to the Selective Review Program but in order to do this it will be necessary for you to keep manual statistics.

7.Please record and provide at the conclusion of the review:

.the number of pensions reduced,

.the average amount of the reduction,

.the hours taken to process, and

.the ASO levels at which the work was undertaken.

Final figures should be sent to Martin Dibb, Selective Review Manager, Benefits Income Support Standards and Control, 68 Dundas Court Phillip.

7.The Central Office contact officers for this exercise are Jeanette Ricketts on telephone (06) 282 5196, and for technical or ADP problems Ric Moore on telephone (06) 282 5494.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS

DATE OF ISSUE:  12 March 1990

GENERAL INCREASE AND CURRENCY ADJUSTMENT TO BRITISH DISABILITY PENSIONS PAID IN AUSTRALIA

The British Department of Social Security (BDSS) have advised of various changes to the British pensions paid in Australia.  Those changes are:

General CPI Increase

Exchange Rate Variation

Extra-ordinary Increase for War Widows

and

The Australian General Increase

2.These changes will affect the EATS/COMP cases and any case where service pension is also in payment.  Despite the new arrangements for the direct credit of the majority of British pensions our Service Pension records still have to be maintained in respect of General Increases and exchange rate variations.  The new rates and exchange rate will be applied to EATS, Composite and all service pension cases where British disability pension is in payment.

EFFECTIVE DATES

3.This exercise is a manual process and arrears are to be paid so the timetable is at your discretion.  However, the variations should be put into effect on payday 19 April, 1990 or 3 May 1990.  The date of effect for the exchange rate variation can be either 9 April or 11 April or 19 April 1990 depending upon the characteristics of the case.  The exchange rate will vary from $A2.03 to $A2.11 to one Pound Sterling.  The General Increase is effective 9 April for Officer and Widows or 11 April for Other Ranks.

The exchange rate is subject to change and the rate of $A2.11 will be confirmed closer to the date.

WAR WIDOWS EXTRA-ORDINARY INCREASE

4.The British Authorities have advised that all War Widows will be given an extra-ordinary increase of 40 Pounds per week.  Despite this increase BDSS have not to date provided updated rates charts and will not provide forms MPU 24.  Compensation Branch (Central Office) will advise all EATS/Composite War Widows of the increase.  The BDSS will advise the pure British War Widows of the increase.  The nature of the EATS/Composite comparison will mean that the EATS/Composite War Widows pension will not rise by 80 Pounds p/f. At the current exchange rate the British component is greater than the Australian component.

FORMS MPU 24, MPU 25

5.Under the revised arrangements for payment of British pensioners the BDSS has refused to provide forms MPU 24/25.  The refusal to provide forms MPU 24/25 also extends to EATS/Composite cases.  Without a form MPU 24/25 the increased rate of British pension and or allowances will not be easily identified.  In general there are no allowances paid in EATS cases and only age allowance paid in Composite cases.  A selection of rates converted to $A at both old and new exchange rates are at Attachment C.

MANUAL CASES

6.There will no longer be automatic cases in this exercise.  The manual cases will be divided into those which are to be processed either through the Pension Payment System or through the Pensioner Information Processing System (PIPS).

7.The cases requiring manual examination will be identified by AL02 listings and by a new program $PPBBSPR which will list all service pension cases where British disability pension is in payment.

8.Action schedules (in the following groups) of cases requiring manual examination and variation by examiners will be produced as soon as possible after cutoff for payday 5 April, 1990.

.Composite Cases

(with or without SP)100

.EATS Cases

(with or without SP)200

.Other Overseas pensions

(which may be affected)300

Group 300 are to be processed via the PMF update transactions.  Groups 100 and 200 are to be processed via PIPS.

9.The new program ($PPBBSPR) will report on all those Service Pensioners who have British DP maintained in their assessment.  This report is to be actioned by amending the British DP amount recorded in each assessment.  Those cases are also to be processed through PIPS.  The majority of the cases will submit to 'DA'.

CONTROL CARDS AND COMPUTER RUNS

10.The parameter cards for the computer runs are at Attachment B.  The computer processing timetable is at attachment A.  Runs according to this timetable will be scheduled by Central Office.  Would you PLEASE check the parameter cards to ensure that they are correct before processing commences.  Any changes should be reported toRic Moore on (06) 2825494 so that the appropriate amendments can be made.

PUNCHING OF TRANSACTIONS FROM AL02 "ACTION" SCHEDULES EATS AND COMPOSITE CASES

PAY PERIOD CODES

11.The pay period, namely 21, of the effective date (19 April, 1990) should be entered.  The day within the pay period field may be left blank.

KEYFAST BATCH DESCRIPTION

12.The manual transactions for EATS/Composite cases should be punched using Keyfast batch description $PENSIO in normal daily production by cutoff for payday 19 April, 1990.

CASES WITH SERVICE PENSION AND OR AN AUSTRALIAN DP COMPONENT TO BE PROCESSED VIA PIPS  (Group 100, 200)

13.For all cases involving EATS, COMPOSITE or SERVICE PENSION, whether automatic or manual method of assessment, the new rate of British pension must be updated on the Client Data Base (CDB) via PIPS.  Due to the change in the British rate, these cases will be "MS".  They can either be registered under process code of DP Payment Change, processed through submission stage with "submitted to" code of "MS" and determined by the delegate, or through manual authority on PIPS only.

14.Where adjustments of payment occur, as in COMPOSITE and EATS cases, the examiner processes the case as follows:

NOTE:The British rates are EXAMPLES only:

(a)Access the facility 'Classify Pension' (BC.CP) classification.  Create an action record with a 'Manual Authority' classification.

(b)Access the facility 'Assessment Control' (PP.AC) Copy the current assessment details by pressing the ENTER button once.  (Effective date can be entered at this stage but is required only where there is a service pension component).

(c)Access the facility 'Disability Pension' (PP.DP) screen and update the new disability pension details.  This is illustrated by:

(1)The following example shows what a similar case will look like when the examiner assess the DP screen:

DISABILITY PENSION (DP)

ADJUSTMENT — PENSION

DP RATE — AMOUNT — AMOUNT

ACTION   REL  TYPE  ENT    RECIPIENT    (P/F)     REASON  (P/F)

VET — 100 — X — V — 100.00 EATS — 95.60

VET — 100F — PX — V — 0.00 — 100.00

TOTALS FOR ALL 2 ITEMS --- DISABILITY PENSION 195.60

NOTE 1:The Australian Disability Pension percentage rate (in this example "100%") must be data collected in each case.

NOTE 2:100F = 100% BP RATE FOR AN OFFICER

(d)the adjustment that has to be made is as follows:

Where, for example, the Australian DP is 100% rate equivalent to $A195.60 and the NEW British rate of 100% for an officer is equivalent to $A200 the screen entries will be:

DISABILITY PENSION (DP)

ADJUSTMENT — PENSION

DP RATE — AMOUNT — AMOUNT

ACTION   REL   TYPE   ENT   RECIPIENT     (P/F)   REASON   (P/F)

C — VET — 100 — X — V — 195.60 EATS              0000.00

C — VET — 100F — PX — V — 0.00 EATS                            200.00

MORE: TOTALS FOR ALL 2 ITEMS --- DISABILITY PENSION 200.00

.we have added an Action "C" (change).

.because the British rate is more than the Australian rate, we do not pay any Australian pension.  Therefore, the Australian adjustment is the equivalent of the full Australian 100% DP rate of $A195.60 and the entry for the British rate is the NEW RATE of $A200 for an officer.

Enter new details on the action schedule

(e)Submit (SU) the cases to MS for a 50, obtain the con. no. and enter that onto the schedule, obtain the supporting documents (only for a case with an SP component) and forward to the Delegate for determination.

15.It may be necessary to prepare a D408 or equivalent in these cases.  The schedule produced for dual BRIT/SP/EATS/COMP may be used as an authority (but there may not be room) provided each record on that schedule is endorsed with the consecutive number automatically produced by the Pension Processing System and is signed by the delegate determining the case, prior to transmission to Pension Payments Section.  All such cases can be identified from the manual schedules listed by the AL02, AL03 runs (ie., group 100, 200) and the new British rates should be deduced from the examiners' entries on those schedules.

NOTE:  All entries on these schedules must be in Australian dollars.

ADVICES

16.There will only be two circumstances where an advice is required and that will be in a limited number of cases.  The circumstances are when the British component is greater than the Australian and in cases where the increased British DP reduces the amount of Rent Assistance payable.  Arrangements will need to be made for advices for those cases.  The advice details, including the reason for variation can be coded/entered on the action schedules.  The advice indicator should be "F" and the reason should be "EXCHANGE RATE AND GEN INCREASE".  There are insufficient characters available to include the exchange rate on the computer produced advices.  Totally manual advice letters can be produced to include all the relevant information.

17.The majority of cases reported by program $PPBBSPR SP/DP will require only a "Z" indicator.  However, if a pension variation occurs (Rent Assistance) the Advice Indicator should be "F" with the reason being "BRITISH PENSION VARIATION".

18.Other British payments such as Funeral Benefits, Education Allowance, Subsistence Allowance, etc., are to be made in accordance with the new exchange rate regardless of the period to which they relate.

MISCELLANEOUS

19.The whole of this exercise is now manual, consequently no certificate will be issued under Finance Regulation 45A.

20.No alphabetical listings of affected cases will be produced for the Department of Social Security who have been advised of the revised payment arrangements.  However, DSS have been advised of the 40 Pounds increase to War Widows.21.  The contact officer for this exercise will be Ric Moore who may be contacted on (06) 2825494 bh or (06) 2823913 ah.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

ATTACHMENT A

TIMETABLE FOR BRITISH REVALUATION and

GENERAL INCREASE EFFECTIVE 19 APRIL 1990

STAGE 131 March 1990

RUNPURPOSE

RSPYAL01 — Listing of cases requiring manual action

RSPYAL02(Z cards in CPP.BRITRVAL.CNTL(AL02RUN1)

RSPYAL03

RSPYAL04 — Composite/benefit in file number or alpha order within               composite group order required for NSW Qld (i.e. use               AL run book sort card 5).  Job NPALA23A

OUTPUTListing Journal:  Schedules - use 3 part paper and double               spacing

$PPBBSPRReport of Service Pensioners with British DP

THE BENEFITS CONTACT OFFICER WILL BE

RIC MOORE(06) 2825494 bh

(06) 2823913 ah

DATE OF ISSUE:  08 March 1990

STATUTORY PENSION INCREASE 19 APRIL 1990 ADP PROCESSING

1.INTRODUCTION

1.1  Changes for the 19 April 1990 Statutory Increase involve variations to the following pension types:

.Disability Pensions

.War Widows' pensions

.AMS Pensions under (old) Reg. 32, 34, 35AA

.Service Pensions and Allowances, the fringe benefit income limits

.Changes to the asset test limits will take place from 14 June, 1990.

2.GENERAL OPERATIONAL OUTLINE

2.1  The processing for pension rate changes will be divided into groups of those cases which will be processed automatically and those cases which will require manual action.

2.2  The ADP and associated Branch Office processing is discussed in the following sections. A broad timetable of events and Scheduling dates are included at Attachment 1.

2.3  For the "DISABILITY PENSION AND ALLOWANCES PROCESSING" automatic increases to pension rates will be effected where possible using programs which apply the new rates of pension and allowances to the PMF and CDB.

2.4  For the "SERVICE PENSION PROCESSING" income/assets details and personal assessment particulars held on the CDB will be referenced for the automatic reassessment of pension and preparation of variation transactions for update of the PMF.  Changes to other elements of assessment e.g. increase in the fringe benefits limits, will also be effected automatically.

3.SPECIAL FEATURES AND SUGGESTIONS

3.1  Miscellaneous Codes

Any case on a miscellaneous code that is processed through PIPS and is not shown on the new code book will fail Edit Update.

3.2  Manual DP Listings

Manual DP cases will be listed on the same weekend as the automatic disability pension and service pension updates.Manual DP cases require processing through the on-line pension processing system (IDPS/PIPS).  This action cannot be completed until after the cut-off for payday 5 April, AND the new rates are put into production on the weekend of 31/3/90.

3.3  Fringe Benefits & Treatment Entitlement Cards

Fringe benefit income limits will increase and it is expected that some pensioners will become eligible for fringe benefits.  Issue of health cards and recall of pharmaceutical cards will be processed through the normal batch system following the SI.

3.4  PMF Update/On-line System

Processing will be undertaken over the weekend 31 March 1990.THE LATEST AVAILABLE PMF UPDATE WILL BE FRIDAY 30 MARCH, at 2.00pm SYDNEY TIME (4.00pm SYDNEY TIME FOR WESTERN AUSTRALIA ONLY).  Neither the on-line Pension Processing system (IDPS/PIPS) nor the Pension Payment update facility will be available over the weekend.

3.5  Pre Increase Action

It is suggested that the following steps be undertaken prior to computer runs for the SI to help processing progress as smoothly as possible:

.minimise the number of cases in "frozen" status (SB or PY status);

.arrange an early cut-off (say one week) for processing of cases requiring "MS submissions by pension examiners to allow time for those cases to be received and actioned by Pension Payments;

.clear outstanding "MS" cases;

.resolve any SP Compare reconciliation edits;

.arrange a cut-off date one or two days before automatic processing commences for final automatic authorities to Pension Payments;

3.6  Trial Assessment Facility/War Pension Code File

The new Trial Assessment facility with the new SI rates and other assessment changes will be available by 19 March 1990.  The War Pension Code File will be available with the new SI rates from 2 April.

3.7  Limitation Cases

Cases for which limitations are in force will have pension increased automatically, but the limitation amount will not be adjusted.  Identification of these cases and adjustment to the limitation amount must be arranged locally.

3.8  Processing Problems

Should any problems arise with either the automatic processing system or the procedures outlined, they should be advised to Central Office immediately.  The contact officer at Central Office is Ric Moore on telephone (062) 82-5491

(bh) or (062) 82-3913 (ah).

3.9  PNG Pension Rates (Queensland Only)

The PNG pension rates effective from 19 April are:

OLD — NEW

$$

VETERAN              121.80              130.60

WIDOW              72.50              77.70

ORPHAN              13.80              14.70

4.PENSION RATE CHANGES - DISABILITY PENSIONS AND/OR ALLOWANCES PROCESSING

FULL RATE CODE WITH LIMITATION

4.1  Increases to rates of disability pensions and associated allowances, as well as certain AMS pensions and war widows' pensions, will be processed in the following three stages:

.Rates of disability pensions and allowances, war widows' pensions and certain AMS pensions will be increased automatically, except where payment is recorded under a miscellaneous code.

.Cases requiring manual processing will be selected and listed.

.Cases requiring manual processing will be examined and updated through IDPS/PIPS before cut-off for payday 19 April.

4.2  Action Schedules

Action schedules of DP and British SI cases requiring manual examination and variation by examiners will be produced for the following action groups:

Group Contents              Reference Number

.Composite Cases              600

.EATS Cases              500

.Miscellaneous code disability              400

pension.  Some of these cases may

include an SP component; but the

DP ONLY should be adjusted.

.Miscellaneous  widows'  pension              300

.Disability pension cases with a              200

suspension segment and AMS

cases with a suspension segment.

Some of these cases may include

an SP component, but the suspension

and/or DP segments only should be

adjusted.

NOTE:A record may belong to more than one group.  Where this happens, the case will normally be listed once with the group of the the highest reference number.

4.3  General Procedure for These Manual Adjustments

Action schedules will have all disability pension segments shown at pre-increase rates.  Manual action by examiners will comprise entering the new rate in the "new fortnightly" column and where necessary, amending the pension category and/or code of the relevant segment.  If any component of a DP pension segment is to be adjusted, processing through the Interim DP system (IDPS) will be required.  Processing of the case will be as follows:

.use Classification Pension (CP) to register a payment change action;

.access Assessment Control (AC) to create an action assessment.  No effective date is required for a DP only case;

.update the new disability pension details via the Disability Pension (DP) screen;

.complete Advices (AD) screen;

.submit (SU) the case to MS/5O, write the consecutive number onto the schedule and forward to the Delegate for determination.

.For AMS cases, only update of schedules is required.

4.4  Keyfast Description

MS (multiple segment) and manual transactions should be transmitted to the Computer Centre in the normal pension payment daily stream i.e. keyfast description $ PENSIO, prior to the cut-off for payday 19 April.

4.5  Parameter Cards

Parameter cards and rate tables have been prepared at Central Office to effect the automatic updating of "DISABILITY PENSION AND ALLOWANCES" cases and list those requiring manual action.  These cards will be input to the computer by Central Office.

5.PENSION RATE CHANGES - SERVICE PENSION PROCESSING

5.1  The increases to service pension and allowances will be effected automatically on the PMF wherever possible by program APPBAL.  APPBAL will detect cases from the CDB and PMF which cannot be processed automatically, and produce reports and schedules to enable manual reassessment of service pension for subsequent updating of the PMF.  These reports have been improved and rationalised for this exercise.  It is hoped that they will be easier to use.  APPBAL will also generate pension payment transactions for automatically processable cases.Cases listed for manual action will need to be processed through PIPS before cut-off for payday 19 April.

5.2  Processing of automatic cases - 31 March

Program APPBAL will generate Pension Payment transactions updating the rates of service pension and allowances for cases recorded on the CDB with an automatic method of assessment by:

.obtaining income/asset details and assessment information from the CDB;

.reassessing the service pension and allowances using the new SI rates and elements of assessment; and

.generating transactions for update of the PMF in respect of rate variations, changes in payment category and/or pension code.              APPBAL does not update the effective date, so that on display of the case, the previous effective date will be shown (ie not 19 April 1990).

5.3  Outputs From Programs APPBAL

The  cases which cannot be processed automatically will be reported on schedules for manual action.Manual cases are:

.Frozen actions (i.e. cases in 'PY' or 'SB' Status);

.PMF/CDB incompatible cases;

.Manual methods of assessment (excluding Working Rule B);

.Cases suspended on the PMF;

.Manual disability pension cases;

.Assessment errors.

Other schedules which may be produced are:

.Last SI not processed;

.Old SI process codes deleted;

.Manual arrears cases;

.Data base errors detected;

.Transaction generation error schedule.

5.4  Processing of manual cases: 2 April to cut-off for payday 19 April 1990.

The processing of manual cases should be done in the above period and cases are to be processed through IDPS/PIPS.  Cases listed for manual action should be reassessed using the SI rates, updated through an action record, a D2650 produced, or a D408 or other coding sheet produced to effect the PMF variation.  If coding is done on an action schedule, the consecutive number for the IDPS/PIPS action should be noted on the schedule.

5.5  Frozen Actions - when cases in 'PY' or 'SB' status are encountered by the SI program, update is prohibited because the record is 'frozen'.  The cases need to be 'unfrozen' and re-processed as follows:

.return case to 'RI' status (by using 'Cancel Determination' and 'Cancel Submission' as appropriate)

.re-process case using the SI as the last variation (if effective date is prior to the SI date enter arrears line for effective date)

.submit to 'MS' or 'DA' as appropriate and prepare D408 in 'MS' cases.

.determine case as per normal.

5.6  PMF/CDB incompatible cases - cases will need to be investigated to determine the cause of the discrepancy, then the CDB or PMF corrected as necessary before the SI action can be processed.  The discrepancies will normally relate to people/suffixes on the CDB and PMF.

5.7  Manual Methods of Assessment - cases need to be manually re-assessed and processed through the system as normal.  Where a case involves a suspension or a manual DP component, it should be processed through an MS submission and a D408 raised to record the manual coding.

5.8  Cases Suspended on the PMF - where a service pension, "Other" or Total suspension occurs on the PMF, the SP rate and suspension rate should be re-assessed, the case processed through an 'MS' submission and the rates varied as necessary.              The schedule is produced in 'PMF transaction' format and should be used to code the adjustments.  The schedules should be endorsed with the 'MS' consecutive number generated by the system, and be signed by the Delegate - this obviates the need to prepare a D408 for these cases.

5.9  Manual DP Recorded on the CDB - this schedule lists in 'PMF transaction' format cases with the following 'DP codes' on the CDB.

.EATS

.COMP (Composite/Proviso 'c')

.DIV 10 (Members of the Defence Force),

.MAN, MISC, CONVERSION DATA  (Note: these are no longer valid codes, but may still exist if the case has not been correctly coded following Conversion).

The DP should be examined, the new rates entered through the DPEN format, and the case submitted through 'MS'.Rates of both SP and DP should be varied on the schedule.

The schedules should be endorsed with the "MS" consecutive number generated by the system and signed by the Delegate - this obviates the need to produce a D408 for these cases.

5.10 Assessment Errors - the assessment routine will produce information messages as an indication that certain action should be taken as a result of the re-assessment. These cases should be examined and modified as necessary, as well as processing the SI increase.

Note -Where "QA" data exists on a case which is processed manually, care should be taken to ensure that the assets data is recorded correctly because the "QA" data will not be copied into the action assessment.

6.INFORMATION/SUPPLEMENTARY PROCESSING SCHEDULES

6.1  A number of conditions may exist on the CDB which require additional investigation beyond the normal SI processing.  The cases listed will already be "autoprocessed" or will appear for action on the schedules.  The conditions are detailed below:

.Last SI not processed - the case was not processedd in the last SI that effected the case.  Check the case to ensure that appropriate A/L or SI action was taken.

.Old SI process codes deleted - before any SI processing takes place, any old SI process code (S183) will be deleted.  Action on these will depend on the reason the old process exists, but most will not require any corrective action.

.Manual arrears cases - cases where the current effective date is in advance of the SI date.These cases need to be examined to ensure that any adjustment for the period between the SI date and the current effective date is made.

.Data Base Error detected - these cases will 'fail' SI processing, and should be referred immediately to ADP for action.

.Transaction Generation Errors - the equivalent of Interface errors in normal daily production.  Corrective action is the same as for Interface errors.

6.2  Service pension cases submitted to 'MS' should be transmitted to the computer centre via the normal pension payment daily stream.

DAVID HOLLAWAY

DIRECTOR

BENEFITS ADP SYSTEMS

ATTACHMENT 1

STATUTORY INCREASE - 19 APRIL 1990

TIMETABLE OF EVENTS - GENERAL

19 March 1990 — Trial assessment with the new rates will be available.

31 March 1990 — Updating of PMF for disability pension and AMS cases which can be processed automatically.

31 March 1990 — Reassessment for all CDB records where MOA is "automatic".

31 March 1990 — Automatic update of service pension segments on the PMF except for those cases listed in part 5.3 of these procedures.

31 March 1990 — Production of manual schedules for disability pension and allowances and war widows' requiring examination.

31 March 1990 — Reconciliation run on all variations to either the PMF or CDB.

From 30 March — Examiner action on manual SP and DP schedules.to cut-off forpayday 19 April 1990.

PROCESSING SCHEDULE

The Benefits Applications Branch will provide the NCC with a detailed processing schedule.

The Benefits contact officer for this exercise is

RIC MOORE(062) 825 494 (BH)

(062) 823 913 (AH)

DATE OF ISSUE:  01 March 1990

CHANGES TO THE PIPS INCOME SCREEN TO ALLOW ENHANCED SUPERANNUATION RECORDING

INTRODUCTION

This instruction is to advise of changes on the Income Screen (IN) for the recording of Superannuation type codes.

SCOPE

This instruction covers the changes to type code but not the changes to the recording of a `Deductible Amount' for superannuation income assessment purposes.  Details of the DA changes will be given in a separate instruction.

BACKGROUND

The number of clients receiving superannuation payments has been increasing over recent years.  Under the current system it is impossible to accurately record the correct superannuation codes for clients receiving private superannuation payments, and some British and State superannuation.  To improve the method of recording payment of superannuation and initiate a system to record overseas income, we have changed the method of recording this information.

This enhancement uses the two digits available in (up to 99 codes) PIPS to store the superannuation type code.  The PMF previously limited the number of codes to 9.  Superannuation will no longer be shown on the 90 category code.

The advantages of the new system are:

.superannuation funds to allow for possible tape matching of data;

.variations and CPI increases to be automatically applied;

.not increase and so do not need regular reviews;

.change the superannuation fund code;

Conversion

The conversion will take place on 17 March 1990.  From Monday 19 March the new codes will need to be used.

The system will automatically transfer all the current miscellaneous (09) clients to the new code of 99 and convert other codes as shown on the following table.

CURRENT — CURRENT

SUPER — SUPERANNUATION — CONVERTED TO

TYPE — STATE — DESCRIPTION — NEW CODE

01              NSW              MINERS              11

01              VIC              LASB              18

01              QLD              MINERS              29

01              WA              MINERS              99

02              NSW              STATE              10

02              VIC              STATE              17

02              QLD              STATE              28

02              WA              STATE              38

02              SA              STATE              32

02              TAS              STATE              40

03              ALL              C/WEALTH              03

04              ALL              DFRB              04

05              NSW              RETIREMENT              10

05              VIC              HOSPITAL              20

05              SA              ETSA              33

06              NSW              RAILWAYS              12

06              VIC              SEC              21

06              SA              SA POLICE              34

07              ALL              O/SEAS              59

08              ALL              BRI              08

09              ALL              MISC              99

MANUAL ACTION

The exercise does not involve any immediate manual action.  Conversion of existing clients from the new miscellaneous (codes 99, 59 and 08) to the unique code for their superannuation fund or overseas source will be at the discretion of each Branch Office (probably when next performing a client review).

METHOD OF USING NEW SYSTEM

The new system is still very similar to the current system but allows greater flexibility.  The field previously called the "Paying Authority" is now a free form text area for all superannuation types.  It was previously free form for the miscellaneous superannuation types.  The examiner can input (to Super Type) either a numeric code or a variety of alternative words to select a particular superannuation fund.  For example,

Input of the number '10' and the System will return to the type code field 'NSW STATE'

.Input of the word 'NSW STATE' and the System will return tothe type code field 'NSW STATE'.

.Input of the word 'ELCOM' and the System will return to the type code field 'NSW STATE'.

.Input of the word 'RETIREMENT' and the System will return to the the type code field 'NSW STATE'.

A list of the principal and alternative descriptors which can be used by the examiner to obtain a particular superannuation code are at Attachment A.

The Help Facility lists the expanded meaning of the various superannuation funds.  A copy of this list is at Attachment B.

Attachment C is a comprehensive list in numeric code order of the administrative details of the paying agencies for both the private and public authority funds.

OVERSEAS INCOME

The changes to allow the specific recording of various foreign incomes is required by the introduction of legislation on the subject of notional exchange rates (DIV 1AA) of the VEA.

Cases with income recorded on superannuation type 07 (overseas income) will be converted to code 59.  The recoding of overseas income on the Superannuation Screen records an income value only, no asset value.  Div 1AA of the VEA requires regular exchange rate review of income only.  Any foreign property that has a significant asset value should not be recorded on the IN(Super) screen.  The free form text area is to be used to record the details of foreign income.

MISCELLANEOUS CODE 99

Cases that have income from funds other than those recorded on the schedule at Attachment C will be recorded on code 99 if the superannuation payment is indexed, or 98 if not indexed.  The name of superannuation fund is to be recorded in the Super Description free form field (as under the current system).  A uniform method of recording miscellaneous funds will aid any subsequent review of those cases.

To assist with uniform recording the following rules should be used:

.Do not use ditto signs

.Do not use full stops, etc

.Do not use Pty Ltd or similar

.Do not use the words Retirement, Employees Fund, Provident, Super Board, Pension, State Name, Society or any other unnecessary words

For example:  Tooth does not need & Co, Breweries, Pty Ltd, Super Fund, etc.

SUPER SELECT

The Superannuation Type Selection Run jobs will operate in a similar manner to the current system but will allow the selection of up to 6 types at once.

A new Processing Summary Report detailing the number of clients selected will be produced.

Details of the other schedules produced have not been finalised, but will be improved.

ADVICES

The advices produced have been changed and details of those changes will be given in separate instructions.

The contact officer for this exercise is RIC MOORE on (062) 825494.

DAVID HOLLAWAY

DIRECTOR

BENEFITS ADP SYSTEMS

DATE OF ISSUE:  02 March 1990

BEREAVEMENT PAYMENTS

BACKGROUND

Prior to the introduction of the new bereavement payments, upon the death of a service pensioner, pension was cancelled from the payday following death. If the deceased pensioner was one of a married couple, then the surviving partner would have been entitled to receive a payment of Special Temporary Allowance (STA).

2.This consisted of 6 fortnightly instalments of pension calculated at the difference between the combined married rate of veteran and spouse, less the survivor's on-going rate of pension.

3.STA included:

-service pension;

-rent assistance;

-additional pension for children;

-guardian's allowance;

-remote area allowance.

4.In both single and married cases, a claim for funeral benefits could also be made. This consisted of a once-only payment of either $20, $40, or up to $550 to assist with meeting the costs of funerals for veterans and their dependants.

5.Announced in the Budget on 15 August 1989 were several major changes to the way in which STA is to be paid and also the abolition of the lesser rates of funeral benefits. It is recognised that the smaller $20 and $40 rates of funeral benefits bear no relationship to the actual costs of a funeral.

6.From 1 January 1990, these funeral benefit payments were abolished and in their place an additional instalment of service pension and allowances is payable. In the case of a single pensioner, this additional instalment of pension is paid to their estate and in the case of a married couple, this effectively means that the surviving partner receives an "STA-type" payment - to be known as a Bereavement Payment - covering 7 paydays instead of 6 paydays.

7.As with STA , the bereavement payment includes service pension, rent assistance, additional pension for children, guardian's allowance and remote area allowance.

8.An important reason for these changes is to allow the surviving pensioner of a married couple immediate access to their partner's pension and therefore avoid unnecessary additional stress and worry at a time of bereavement. The new arrangements also reduce the incidence of overpayments and the associated intrusion involved in recovery.

CHANGES

Service pension eligibility for single pensioners extended.

9.For those single service pensioners who die on or after 1 January 1990, service pension will no longer be cancelled from the payday following death, but from the second payday after death. This will result in an additional payment being made, which will take the place of the $20 or $40 funeral benefit. In this way, it effectively targets the estates of those pensioners in most need.

10.This additional instalment of pension will be paid to the estate of all single pensioners, whereas the funeral benefit was only payable in respect of those pensioners eligible for fringe benefits.

11.The provision to lodge an application for the $550 funeral benefit up to 12 months after the death of the pensioner still applies. Also, for those who die before 1 January 1990, the $20 and $40 funeral benefit will still be payable, even if the claim is lodged up to 12 months after the date of death.

12.Where the deceased's account is closed and any additional instalments of service pension and allowances payable after death are returned, then they must be reissued to the deceased's estate. Financial institutions have been made aware of the new bereavement entitlements and should therefore co-operate and not automatically return these pension instalments. Should any problems arise when dealing with financial institutions and a copy of the letter sent to the Australian Bankers' Association by DSS (and including references to DVA) is required, this may be obtained from Gwen Stronach of the Victoria Branch Office.

Service Pension bereavement payments for survivor of a married couple.

13.Upon the death of one partner of a married couple, the survivor is entitled to receive a lump sum payment equivalent to 7 instalments of the difference between the combined married rate and the rate actually paid to the survivor. As with single pensioners, the increase from 6 instalments (old STA) to 7 instalments, reflects the amount payable in lieu of funeral benefits.

Disability Pension bereavement payment.

14.Service pension examiners may also be required to process death cases where both service pension and disability pension were payable. It is therefore important to know that from 19 December 1989 (being the date of Royal Assent), there will also be a bereavement payment payable in respect of disability pension. This bereavement payment is payable for the period of12 weeks after death to the widow/widower of a deceased veteran or female veteran in receipt of disability pension.

15.It is intended, as far as practicable, to also pay this bereavement payment in a lump sum.

Death Registration Form.

16.At Attachment "A" is a suggested Death Registration Form which should be completed by the Death Registration clerks and other clerks recording details of the death of a pensioner. Some of the details contained on this form deal with establishing whether or not the deceased pensioner has a spouse - required primarily for DP only cases, where this is not always apparent.

Death Extraction Advices.

17.When raising a Death Extraction Advice (DEA), staff should be aware of these new provisions and ensure that pension instalments are extracted according to the type of case involved.

EXAMPLE

DP only - married veteran: no extraction during bereavement period.

-single veteran: extract from payday after death.

-married spouse or wife/widow: extract from payday after death.

War Widow - extract from payday after death.

SP only - single veteran or spouse: extraction from 2nd payday after death.

-married veteran or spouse: no extraction during bereavement period.

SP/DP - married veteran: no extraction during bereavement period; limitation of DP portion.

-single veteran:extraction from 2nd payday after death; if possible, limitation of DP portion of 1st instalment.

-married spouse: no extraction during bereavement period; limitation of DP portion.

-single spouse: extraction from 2nd payday after death; if possible, limitation of spouse's DP portion.

NB/ It should be remembered that overpayments of less than $50 are automatically waived due to the administrative costs of recovering such a small amount. This fact should be considered when deciding whether or not to extract whole instalments of pension paid after death.

"Ownership" of deceased's partner's pension instalments.

18.Prior to 1 January 1990, any instalments of the deceased partner's pension that were paid out after death were considered overpayments and therefore recovered - often from the survivor's STA.

19.Under the new provisions, any of the deceased partner's instalments paid out after death (to a maximum of the total value of the assessed bereavement payment) become the property of the surviving spouse. Assuming there is no known reason why the spouse would not have access to those instalments, the lump sum bereavement payment will be reduced accordingly.

20.Where the surviving spouse advises of problems in accessing their partner's instalments, then a manual payment should be made to the survivor and the original recovered from the institution holding the payment.

21.Where payments are made by cheque, the survivor may not be able to cash those in their deceased partner's name. Also, where payment is made directly to a nursing home, etc., it is highly unlikely to be transferred to the surviving spouse. It must therefore be assumed when calculating bereavement payments, that such payments have not been accessed by the survivor.

22.Section 57A(11) of the VEA states that where the deceased partner's service pension instalments are paid into a financial institution, the surviving spouse should be given access to such pension. Provision has been made in this section to indemnify the financial institutions from any further claim or legal action from the Department or the estate, etc.

23.Sections 98A(5) of the VEA and Section 24B(5) of the SWPAA contain the same provisions in respect of disability pensioners.

NB/ Banking Industry Associations have been advised in writing of these requirements. There has been no negative reaction as yet, but some problems may arise with individual banks, etc. once pensioners begin trying to access their deceased spouse's pension. This aspect will be monitored and further negotiations made if necessary.

24.To assist with this process of allowing the survivor access to the deceased's pension instalments, a stock letter should be sent with the other initial advices to the widow/widower as proof of right of access. A suggested format for such a letter is at Attachment "B".

Calculation of DP bereavement payment for widow/widower.

25.Upon the death of a veteran, the widow(er) is entitled to receive a lump sum bereavement payment calculated at:

|the rate of disability pension that would have been

6  x|payable to the veteran on the next available payday,

|if the veteran had not died;

lessthe $ value of any instalments already released.

26.This is restricted to a maximum of 100% of the general rate, therefore the widow of a veteran in receipt of TPI rate pension would receive a bereavement payment equal to:

(6 x 100% rate) - $ value of payments released.

27.Also the disability pension referred to above includes those allowances listed in section 27 of the VEA, but the combined total of disability pension plus section 27 allowance must not exceed the value of 100% of the general rate. This further clarifies paragraph 23 in Departmental Instruction 42/89.

NB/ There is no restriction on bereavement payment being paid in conjunction with War Widows' Pension.

Calculation of SP Bereavement Payment for survivor.

28.Due to the survivor of a married couple being entitled to the deceased partner's service pension instalments paid out after death, the practice of extracting such instalments (up to a maximum of 7 paydays after death) is no longer required in these cases. Instead, the deceased's service pension is to be cancelled and the survivor's pension reassessed from the next available payday.

29.The bereavement payment is then calculated using the formula (as detailed in section 57A(3)(b) of the VEA):

(7 - PPD)  x  (CMR - NR)

The 7 represents the maximum number of bereavement payments payable.

PPD (Pension Pay Days) means the number of pension paydays after the date of death and before the deceased's service pension is cancelled.

CMR (Combined Married Rate) means:

(i)the amount of pension that was payable to the survivor on the payday prior to the first available payday (ie. prior to it being reassessed); plus

(ii)the amount of pension that was paid to the deceased pensioner on the payday prior to the first available payday (ie. prior to it being cancelled).

NR (Nominal Rate) means the amount of pension that would have been payable to the survivor as a widowed person on the payday prior to the first available payday.

NB/ All these must relate to the rate paid or the rate that would have been paid on the same payday.

The VEA describes NR as New Rate, but this may cause some confusion as it may be a rate that is never actually put into payment, hence the term Nominal Rate.

EXAMPLE

20/01/90 — wife died and is survived by a husband (veteran).22/02/90  is the next payday after notification available for action.  Therefore the spouse's pension instalments for 25/1 & 8/2 have been paid out.  On the payday before 22/02/90, each received maximum married rate service pension and rent assistance ($222.70 + $15 pf) - which in most cases should be the rate shown on the PMF, except where there is an indexation rise, or superannuation run, etc. due for the next payday and the PMF has already been updated.

22/02/90 — SP and RA for spouse are cancelled; SP and RA for veteran are reassessed at the single rate to $267.20 and $30 pf.

Bereavement payment is then calculated as:

(7 - 2)  x  ($475.40 - $297.20)

= 5  x  $178.20

=$891.00

Rate change during bereavement period.

30.It should be noted that the calculation of this bereavement payment does not take into account any rate changes due after the date the deceased was last paid.

31.To use the previous example, if there was an indexation rise or any other rate change due on payday 22/02/90, this would not affect the calculation. As previously explained, the rates used (CMR and NR) would be those payable on 8/02/90.

Adjustments to bereavement payment total.

32.The figure of $891.00 calculated in the previous example, may require further adjustment by the Pension Payments/Payment Administration section. In some cases, some of the deceased pensioner's pension instalments may be returned to the Department by a spouse who is unaware of his/her entitlements, a financial institution, etc. The value of such returned instalments must be added to the total bereavement payment.

33.In other cases, the authority may not be processed prior to "cut off" and therefore may not be actioned on the next available payday. If this occurs then the value of the deceased pensioner's instalment that was inadvertently released must be deducted from the total bereavement payment.

34.As with the SP bereavement payment, the lump sum bereavement payment initially calculated for DP purposes may also require adjustment due to instalments being returned, or additional instalments being released due to processing delays.

SP/TPI veteran dies.

35.Where a married SP/TPI veteran dies, the widow will receive War Widows' Pension commencing from the payday following death. For the purpose of calculating the bereavement payment, the widow's and deceased veteran's service pensions should be cancelled from the the next available payday, therefore the widow's NR after this cancellation will equal NIL. The bereavement payment for the remaining bereavement period will then be calculated as for all other cases, ie. using the formula,

(7 - PPD)  x  (CMR - NIL).

NB/ The instalments of both the widow's and the deceased veteran's service pension paid out after death are considered as part of the widow's bereavement payment and not as regular service pension. This therefore allows the widow to receive both War Widows' Pension and service pension at the same time. (Section 42(1)(d) of the VEA does not refer to these payments).

36.Where War Widows' Pension is granted some time after the bereavement period has ended, but backdated to a payday during the bereavement period, then the bereavement payment must be retrospectively recalculated and any amount owing paid to the widow.

Non-taxable status of SP bereavement payments.

37.The Income Tax Assessment Act still defines STA (to be amended to bereavement payment) as being the amount that "would have been paid to the person's spouse if the spouse had not died." But, due to the current practice of reassessing the survivor's service pension rate during the STA period, the STA paid is more accurately defined as (CMR - NR) x 6.

38.Following the commencement of the new bereavement payment arrangements, the total bereavement payment is still a non-taxable payment. Therefore the non-taxable component should simply consist of the amount calculated as a lump sum plus the value of the deceased spouse's pension instalments released after death.

39.There will still be some manual adjustments required to the Tax Database to deduct from the taxable pension total those instalments released after death.

Use of Bereavement Payment Calculation Sheet and Authority.

40.An example of a Bereavement Payment Calculation Sheet and a Bereavement Payment Authority are shown at Attachments "C" and "D" respectively.

41.Attachments "E" and "F" show completed forms for the following example:

06/02/90 — veteran died;

17/02/90 — notification received;

08/03/90 — next available payday for processing, therefore pension instalments released after death: 08/02/90 and 22/02/90.

22/02/90 veteran in receipt of SP $222.70

DP $150.16 (80%);

wife in receipt of      SP $222.70 only.

(combined income of $130 pf - wife's investments).

Upon reassessment on 08/03/90, wife's SP reduced to $197.70 pf (ie. New Rate).

The total SP and DP bereavement payment calculated was $1839.14

When the Authority reached the Pension Payments or Payment Administration section, it missed the "cut off" date and was subsequently not processed until payday 22/03/90.

The total SP and DP bereavement payment actually paid was $1441.28

$550 funeral benefit payable as well as the bereavement payment.

42.Although the $20 and $40 funeral benefit payments will be absorbed into the bereavement payment payable to both single and married service pensioners, the $550 funeral benefit will still be available. This payment is made in respect of veterans who meet the criteria detailed in Section 99 of the VEA.

43.Legislation does not preclude pensioners from receiving both the bereavement payment and the $550 funeral benefit payment where eligible. This has the effect of increasing the amount of pension/benefit payable towards the cost of the funeral.

Separation due to ill-health or respite care.

44.Service pension couples who are separated due to ill-health, or where one or both are in approved respite care, receive the single rate of service pension and may also receive rent assistance.

45.But, for the purpose of calculating the lump sum portion of the bereavement payment, the couple should be reduced to the married rate from the next available payday. The rates used in the calculation should be as if they were paid the married rate from the payday prior to the next available payday (the formula at paragraph 29 refers).

46.Although this means that those instalments of service pension released after death (before pension is reassessed) are paid at the higher rate, it will NOT be necessary to reduce the lump sum bereavement payment by the difference between the single and married rates. Subsection 57A(6) of the VEA states that only those instalments to be included in the lump sum portion of the bereavement payment must be assessed as though a direction under subsection 47(2) or (2A) was NOT in force.

47.Where a single pensioner enters approved respite care, rent assistance may be payable for the period of such respite care. The bereavement payment instalment paid on the payday after death shall include the rent assistance amount as this payment should reflect the amount the veteran would have received on that payday if he or she had not died.

Bereavement Payment payable where applicant dies before pension granted.

48.Where an application is lodged for either SP or DP and the applicant dies before pension is granted, bereavement payment is still payable where it is established that the applicant would have been entitled to receive payment of pension on a payday before the date of death.

49.This also applies to the estate of single service pension applicants being eligible for the additional instalment of service pension after death, but only where the applicant would have been entitled to payment of service pension on a payday before date of death.

Posthumous DP increase.

50.Where a DP veteran dies, his widow receives a bereavement payment calculated at the disability pension rate payable at that time (to a maximum of the 100% rate). If the disability pension rate is subsequently increased - possibly due to the finalisation of a claim lodged before the veteran's death, or due to a successful appeal - then the bereavement payment originally paid to the wife/widow must be recalculated.

51.Any additional bereavement payment owing should be paid directly to the widow, while the arrears of the disability pension increase are paid to the deceased's estate.

EATS and composite cases.

52.Where a veteran receives two disability pensions, one paid by the Australian Government and the other by an overseas authority, eg. Britain or New Zealand, the bereavement payment is only applicable to the Australian assessed rate. Disability pensions from overseas authorities are still cancelled from the payday following death.

53.It is therefore important to ensure that the Australian assessed rate of the disability pension payment is correctly identified. This can be done by checking the Client Record Summary screen (IQ.CR) on the General Inquiries System. The bereavement payment calculation will have no effect on the formulae currently used to assess the EATS, composite and combined disability pension cases.

Survivor's New Rate is greater than the previous Combined Married Rate.

54.As with the old STA provisions, there will be cases where the survivor's nominal rate of service pension is greater than the previous combined married rate. This may occur when the deceased pensioner had a form of income, such as wages, that ceased upon death.

55.In these circumstances, (where notification of the death is received at a time where the first available payday is one of the 7 paydays after death) the new bereavement provisions enable the survivor to receive service pension at a rate at least equal to the single rate. (Section 57A(3)(a) of the VEA refers.) This will mean that eligible veterans (whether male or female), will be paid at the single rate. But, it will also require wife-widows of deceased veterans to be paid at the single rate.

56.This will be done by calculating the rate of service pension payable to a wife-widow at the single rate by using the TRIAL facility on the PIPS system. This simply requires the "WWII" indicator to be changed to "Yes".

57.The wife-widow will actually continue to receive fortnightly instalments of the reassessed married rate of service pension, but the difference between the assessed single rate and the continuing married rate will be paid in a lump sum as a separate payment - known as a Single Rate Adjustment.

EXAMPLE.

Veteran's SP rate:              $ 92.70 pf(Income: wages of $560.00 pf)

Wife's SP rate:              $ 92.70 pf(Income: NIL)

                            ____________

CMR:              $185.40 pf              (as at payday after death)

Veteran died, therefore wife-widow's rate when assessed at the single rate = $267.20 pf (as at payday prior to being reassessed).

It is therefore established that it would be more beneficial to the wife-widow to pay her the single rate of pension, rather than the usual bereavement payment.

58.  The Single Rate Adjustment would be calculated as follows:

(Assuming the reassessment is being done on the 3rd payday after death, ie. 2 instalments released).

$267.20 pf:wife-widow's SP rate if assessed payday after death as a single                             veteran.

-$185.40 pf:less wife-widow's and veteran's SP rate.

____________

$ 81.80 pf

x   2 — being the number of payments made after death at that rate.

____________

=$163.60

THEN,

$267.20 pf:being wife-widow's SP rate if assessed as a single veteran from                             next available payday.

-$222.70 pf:being wife-widow's new SP rate assessed at the married rate from                             next available payday.

____________

$ 44.50 pf

x   5 — multiplied by the number of paydays still remaining within the

bereavement period:

(7 - 2 already paid out after death)

____________

$222.50

+$163.60(from above)

____________

=$386.10 — Single Rate Adjustment.

59.The wife-widow will actually receive her married rate service pension each fortnight and be paid a lump sum of the Single Rate Adjustment. An example of a calculation sheet and an authority are at Attachments "G" and "H".

NB/ The above calculations should also take into account any rate changes due to indexation (as would occur if the wife-widow were in receipt of single rate pension paid normally.)

Where the surviving service pensioner dies during the bereavement period.

60.After notification of the first death, should the survivor die during the bereavement period, the lump sum bereavement payment, which may already have been calculated and paid out, will still be payable. In service pension cases, the partner who died second will also be entitled to the additional instalment of service pension after death.

Where notification is received of both deaths at the same time.

Service pension cases:

61.Should notification of the second death be received at the same time or before the first death, then the bereavement payments are calculated a little differently (as defined in Section 57A(4) of the VEA).

62.The formula used in this instance is basically the same as for a normal case where one of a married couple dies, except that PPD (Pension Pay Days) means the number of pension paydays in the period from the day after the first deceased pensioner's death to and including the day of the "surviving" pensioner's death.

63.This ensures that the pension instalments of the first deceased pensioner are not paid to his/her estate, but are paid to the "surviving" pensioner's estate by including these amounts in the lump sum bereavement payment calculation. The first deceased pensioner's instalments released after the "surviving" pensioner's date of death must therefore be recovered from the first deceased pensioner's estate.

64.Also, the CMR (Combined Married Rate) is:

(i)the amount of service pension that would have been payable to the survivor;

plus

(ii)the amount of service pension that would have been payable to the deceased pensioner;

(if neither pensioner had died) on the payday after the survivor's death.

65.The NR (Nominal Rate) is:

the amount of service pension that would have been payable to the survivor (if he or she had not died) as a widowed person, on the payday after the survivor's death.

Disability pension cases:

66.Should notification of the second death be received at the same time or before the first death, then the bereavement payment is calculated as that detailed in Sections 24B(3) of the SWPAA and 98A(3) of the VEA:

the amount of DP that would have been payable to the veteran on the first available payday after the death of the widow/widower (up to a maximum of 100% of the general rate);

multiplied by 6.

67.If the deaths occurred at the same time (eg. in an accident), the elder spouse is deemed under law to have died first.

68.As there are so few cases where this occurs, the Bereavement Payment Calculation Sheet and Authority could be amended and still used for such cases, rather than adding to the number of forms to be used.

Spouse paid income/asset-tested pension at DSS.

69.As with the old STA provisions, where the veteran is paid at this Department and the spouse at the Department of Social Security (DSS), the department which is paying pension to the survivor will calculate and pay the lump sum bereavement payment. Except, of course, where disability pension bereavement payment is concerned, DVA will handle the calculation and payment, even if the surviving spouse is paid by DSS.

70.In order for DSS to calculate the bereavement payment for the surviving spouse of a deceased veteran, the suggested form at Attachment "I"  should be completed as soon as possible after the death of the veteran and forwarded to the appropriate DSS regional office. (This replaces the previous stock letter D430).Local procedures for liaison with DSS will be the responsibility of individual branch offices.

DSS treatment of the disability pension bereavement payment.

71.The disability pension bereavement payment will be treated as exempt income by DSS. This exclusion will be included in Subsection 3(1)(q) of the Social Security Act.

Transfer of wife/widow to DSS.

72.Where service pension bereavement payment is payable, including in the form of the Single Rate Adjustment, the wife/widow cannot transfer to DSS until the end of the bereavement period. This bereavement period commences on the payday after death and continues for 7 paydays. DSS may grant pension to the wife/widow from their payday after the end of the bereavement period.

73.Although a portion of the bereavement payment is paid in a lump sum, this payment still covers the period ending 7 paydays after death of the pensioner. Section 42 of the VEA, which precludes dual receipt of these pensions, is therefore still applicable.

Bereavement payment not to be paid to a separated spouse.

74.The previous arrangements allowed for payment of STA to be made to more than one person. For example, where a veteran is separated from his legal wife and has a de facto wife. The new bereavement provisions enable only one bereavement payment in respect of a deceased pensioner. This payment should be made to that person with whom the deceased pensioner was living and is defined under Section 35(1)(p) of the VEA as one of a pensioner couple:

"(a)2 service pensioners each of whom is a married person because of being the spouse of the other pensioner;"

75.A married person, as defined in Section 35(6)(f), covers both service and disability pensioners [due to the inclusion of Section 98A(6)] and refers:

"(i)to a person who is legally married to another person and is not living separately and apart from that other person on a permanent basis; or

(ii)to a person who is living, in the case of a man, with a woman as her husband, or, in the case of a woman, with a man as his wife, on a bona fide domestic basis although not legally married to that woman or man (whether or not the person is legally married to another person who is still alive)."

Bereavement payment extended to carers.

76.Prior to the introduction of the new bereavement payments, carers immediately lost eligibility for carers service pension upon the death of the veteran for whom they were providing care. The new bereavement arrangements have been extended to carers to enable them to continue to receive their carers service pension for a period of 14 weeks after the death of the veteran. (Section 57B of the VEA refers).

77.This will not be paid in the form of a lump sum, but will simply be a continuation of carers service pension for another 7 paydays, before cancellation. During this period, the normal income/assets tests apply, therefore there is no restriction on the reassessment of pension rate.

78.This extension of pension entitlement is quite separate from the additional instalment of service pension payable to the estate of a deceased single veteran or the bereavement payment payable to the widow of a deceased married veteran.

79.The purpose of this extension is to allow the carer some time in which to establish eligibility for another form of pension or benefit, or to reorganise domestic and financial affairs.

Bereavement payment extended to cover the death of a child.

80.A further change to the bereavement arrangements is that a form of bereavement payment will be payable to those service pensioners who, due to the death of a dependant child, suffer a reduction in pension rate following the cancellation of any child-related payments. These comprise:

.Additional Pension for Children;

.Guardian's Allowance;

.Rent Assistance (any reduction);

.Remote Area Allowance.

81.This bereavement payment will consist of a lump sum equivalent to 7 fortnights of the cancelled child-related payments. (This does not include any reduced service pension due to the child-deduction being cancelled). Section 57C(2) of the VEA sets out the formula for calculating the bereavement payment as:

PCRP  -  CCRP

PCRP (Previous Child-Related Payments) means the amount that would have been payable during the bereavement period in child-related payments, if the child had not died.

CCRP (Current Child-Related Payments) means the amount (if any) of child-related payments that are, after the child's death, payable during the bereavement period.

82.It should be noted that, unlike the other lump sum bereavement payments, the calculation of a child related bereavement payment will have regard to any rate changes that would have occurred if the child had not died.

EXAMPLE.

Child aged 12 dies on 3/01/90(13th birthday: 8/02/90)

Pensioner couple in receipt of:SP $445.40 pf ($222.70 ea)

APC $ 48.00 pf

RA $ 40.00 pf ($20 each)

_____________

TOTAL$533.40 pf.

Next available payday for processing is 25/01/90.

Bereavement Payment Calculation:

PCRP  $48 (APC) + $10 (RA)=$58

- applicable for paydays 11/1 & 25/1/90

CCRP  $nil (APC) + $nil (RA)=$NIL

_______

Bereavement Payment Rate =$58 pf.

multiplied by 2 paydaysx — 2

_______

SUB-TOTAL$116

PCRP  $68.20 (APC) + $10 (RA)=$78.20

- applic for payday 8/02/90 to end of B. period

CCRP  $nil (APC) + $nil (RA)=$NIL

________

Bereavement payment Rate =$78.20

multiplied by 5 paydaysx — 5

________

SUB-TOTAL$391.00

+$116.00

________

$507.00

less child-related payments released after death-              $ 58.00

(11/01/90) ________

LUMP SUM BEREAVEMENT PAYMENT PAYABLE:$449.00

Family Allowance paid by DSS.

83.Where a family was receiving Additional Pension for Children (APC) in respect of the deceased child, then DSS will pay a similar lump sum bereavement payment for Family Allowance. It is therefore necessary in such cases, to advise DSS as soon as possible of the fact that DVA is intending to pay a bereavement payment which includes an APC component, so that their Family Allowance payment can be made without delay.

84.The reason why DSS will only pay Family Allowance bereavement payment when APC was payable in respect of the deceased child, rather than to all Family Allowance recipients, is because those families in receipt of APC would be considered low income families and would therefore have more need for financial assistance with the cost of a funeral.

85.A suggested proforma for advising DSS of the death of a child where APC was payable is at Attachment "J".

METHOD OF PAYMENT.

86.It will be left to each State to decide on the most efficient method of payment to suit their local procedures. But, the overriding consideration should be the client and ultimately payment of the lump sum bereavement payment should be made in the most expedient manner. This should remain flexible to suit the occasions where the widow(er) requests payment in a particular form, ie. by direct credit instead of by cheque, or vice versa.

OVERPAYMENT RECOVERY.

87.Section 205(4) of the VEA has been omitted and replaced with Section 57A(10). This has basically removed the provision that disallowed direct recovery of an overpaid pension instalment, paid after death into a joint account, where it can otherwise be recovered from STA.

88 In its place, Section 57A(10) states that where pension instalments are paid out after death, except where this amount exceeds the total bereavement payment payable, these are not recoverable from the surviving spouse or personal representative, but the bereavement payment is reduced accordingly.

89.Although this section of the VEA indemnifies financial institutions against any claim or demand by the Commonwealth, this only covers those payments to which the survivor is entitled.

ADVICES.

90.Naturally, as a result of these new bereavement measures, the current advices sent out following the death of a pensioner must be updated. As each Branch Office has their own stock letters, this should become the responsibility of each branch and may also be covered under the new Benefits Advices.

91.Debbie Fitzgerald from the Brisbane branch (in consultation with Mark Molloy) is currently working on a "handout" that can be issued to pensioners to answer many queries regarding bereavement payments.

PUBLICITY.

92.The Department of Social Security will cover DVA bereavement payment measures in their Age Pension News publication, as well as in letters to Banking Industry Associations, Funeral Industry and Public Trustee Offices. A pamphlet and information folder is also being prepared by Mark Molloy's team in Central Office.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS PROGRAM

DATE OF ISSUE:  22 February 1990

BRITISH RETIREMENT INCOME (BRI) EFFECT UPON SERVICE PENSION OF VARIATIONS IN THE EXCHANGE RATE OF POUNDS STERLING

The Department of Social Security has made a variation to the exchange rate to be applied to British Retirement Income for conversion to Australian Dollars when making Service Pension reassessments.

Effective Date

2.On payday 22 March 1990 the current agreed exchange rate will change from 1 Pound Sterling equals $A2.00 to 1 Pound Sterling equals $A2.22.

Time Table

3.The various computer runs necessary for this exercise will be made on the 10 March 1990.  A processing time table is at Attachment A.

Automatic Superannuation Processing

4.The strategy for adjusting the exchange rate to be applied to BRI cases will be similar to the superannuation processing exercise.  The super select (APPBSSEL) program will be run to select all cases with super type 08 (BRI) recorded on the CDB.  The selected cases will then be formatted into super input transactions and the superannuation program APPBSUPR will be run to effect automatic reassessment of service pension based on the new exchange rate.  Cases with actions in "IN" or "RI" status will not be processed.

The amount of type 08 super will be varied by applying a conversion factor which is calculated as follows:

new exchange rate=conversion factor

old exchange rate

e.g.$2.22              =              1.1100

$2.00

The amount in $A of supertype 08 will be multiplied by the conversion factor to give the new rate of super and pension will then be reassessed accordingly.

New Cases and Reviews

5.For any new grant of service pension (involving BRI) or new grant or variation of BRI the conversion to $A must be made at the old exchange rate until the automatic runs are done on the 10 March 1990.  Failure to process cases at the appropriate exchange rate will cause errors in the amount of BRI held in the pension assessment which will be further exacerbated each time the exchange rate is varied.  For this reason it is suggested that there be established a processing cutoff of BRI cases for a specified period before the adjustment in exchange rate exercise is to be undertaken.

Regulation 45A Procedures

6.The Assistant Secretaries both Benefits Planning and Management and Corporate Development Branches at Central Office will test the programmes used and attest to the correctness of the new exchange rate used.  Certificates in the terms of Finance Regulation 45A will be forwarded to the "Authorised Officer" in your Finance Branch.

Advices

7.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 Variation to $2.22" for cases with type 08 super.  The advices will be forwarded direct to your branch from the NCC with the usual daily outputs.

Contact Officer

8.The contact officer at Central Office for this exercise will be Ric Moore who can be contacted on telephone (062) 82-5494.

JIM DALTON

ASSISTANT SECRETARY

BENEFITS PLANNING & MANAGEMENT

ATTACHMENT A

PROCESSING TIMETABLE

(ALL RUNS ON 10 MARCH 1990)

JOBSTEPFUNCTION

1. $PENSBRIAPPBSSEL — To select all supertype 08 and to create a file

of all records with this supertype.

IEBGENER — Reblock file for the Super Run.

APPBSUPR — This program has a parameter for new and old exchange rates.  The new exchange rate is divided by the old exchange rate which produces a conversion factor which is used to determine the new amount of BRI for the records in the file and subsequent reassessment of pension.  Parameter cards are in DVA.PROD.CARDS ($PENSBRI).  They are setup in BPP.PROD.CARD ($PENSBRI) and copied to production by Systems Division.

APPXPRNT — Print results from Super Run.

APPBINTF — This step includes the interface step which produces type 10 transactions and the edit step which edits the transation.

APPIBACK — To backup interface outputs.

RSPYEDIT — The normal edit runs.

2. $PENUPDTAs for daily — To update edited transactions production to                                           PMF.

3. $PENADVCAs for daily — Advices Production. production

4. $PENHEAPAs for daily — Health Card Production. production

BENEFITS CONTACT OFFICER:RIC MOORE

TELEPHONE:(062) 825494 BH

(062) 823913 AH

DATE OF ISSUE:19 February 1990

AMENDMENTS TO THE ELIGIBILITY HANDBOOK

Staff who hold a copy of the Eligibility Handbook - May 1988 Edition, please note that three amendments have been made to the handbook as a result of the extension of benefits under Parts II and III of the VEA to Australian service personnel serving with the United Nations Transition Assistance Group in Namibia.

2.The three amendments to the handbook should be made as follows:

Page 4:     -following the entry for 22 May 1986 introducing the Veterans' Entitlement Act, add:

"27 June 1989 — Namibia designated as an operational area from 18 February 1989 for the purpose of extending benefits to Australian members of the United Nations Transition Assistance Group who served there.".

Page 7:     -add the following as the third and fourth sentences in 4.2.3 on operational service:

"Service in the operational area of Namibia forms the basis of eligibility for Australian members of the United Nations Transition Assistance Group.  Because disability is payable to UNTAG members under the VEA, there is no right to compensation under the Commonwealth Employee's Rehabilitation and Compensation Act 1988."

Page 7:-add to 4.2.4 on operational service:

"9 — Namibia 18 February 1989"

3.The above amendments, as well as the amendments advised by Departmental Instruction B08/89 of 28 April 1989, will be incorporated into the handbook at the next reprint in the near future.

DAVID HOLLAWAY

DIRECTOR

BENEFITS PLANNING AND MANAGEMENT

15 February 1990

DATE OF ISSUE:  06 February 1990

CURRENCY ADJUSTMENTS TO BRITISH DISABILITY PENSIONS PAID IN AUSTRALIA

Advice has been received from the British Department of Social Security (BDSS) to the effect that the exchange rate to be used for payment of the British component of disability pensions in Australia has been reviewed.

2.The new rate is to be put into effect on payday 8 March 1990.  The exchange rate will vary from $A2.09 to $A2.03 to one Pound Sterling (British pension rates charts are at Attachment C).  The variation applies to the Hong Kong cases and to the EATS and Composite cases.

3.There will be no cases processed automatically.  All cases will be listed for manual examination.

SERVICE PENSION CASES

4.A report will be produced of Service Pension cases with British Pension in payment to enable update of the DP amount for service pension assessment purposes.

5.Action schedules of cases requiring manual examination and variation by examiners will be produced, on 17 February 1990, in groups which will consist of the following:

Group Content — Group Reference

.Composite Cases — 100

(with or without SP)

.EATS Cases — 200

(with or without SP)

.Other overseas pensions — 300

(which may be affected).

Groups 300 are to be processed via the PMF update transactions.  Groups 100 and 200 are to be processed via PIPS.

PUNCHING OF TRANSACTIONS FROM "ACTION" SCHEDULES EATS AND COMPOSITE CASES

6.Pay Period Codes

The pay period, namely 18, for the effective date (8 March 1990) should be entered.  The day within the pay period field may be left blank.

Keyfast Batch Description

The manual transactions for EATS and Composite cases should be punched using Keyfast batch description $ PENSIO by cutoff for payday 8 March 1990.

CONTROL CARDS AND COMPUTER RUNS

7.Control card formats for computer runs are at Attachment B.  The computer processing timetable is at Attachment A.  Runs according to this timetable will be scheduled by Central Office.  Would you PLEASE have the parameter cards checked by an officer of your Branch to ensure that they are correct before processing commences.  Any changes should be reported to Ric Moore on (062) 825494 so that the appropriate amendments can be made.

CASES WITH SERVICE PENSION AND OR AN AUSTRALIAN DP COMPONENT TO BE PROCESSED VIA PIPS  (Group 100, 200)

8.For all cases involving EATS, Composite or service pension, whether automatic or manual method of assessment, the new rate of British pension must be updated on the Client Data Base (CDB) via PIPS.  Due to the change in the British rate, these cases will be "MS" and determined by the delegate, or through manual authority on PIPS only.

9.Where adjustments of payment occur, as in COMPOSITE and EATS cases, the examiner processes the case as follows:

NOTE:The British rates are EXAMPLES only:

(a)Access the facility "Classify Pension" (BC.CP).  Create an action record under Manual Authority action.

(b)Access the assessment control (PP.AC).  Copy current assessment details by pressing the ENTER button once.  (Effective date can be entered at this stage but is required only where there is a service pension component.)

(c)Access the disability pension (DP) screen and update the new disability pension details.  This is illustrated by:

(1)The following example shows what a similar case will look like when the examiner accesses the DP screen:

DISABILITY PENSION (DP)

ADJUSTMENT — PENSION

DP RATE — AMOUNT                            AMOUNT

ACTION   REL  TYPE   ENT  RECIPIENT    (P/F)    REASON   (P/F)

VET — 100 — X — V — 100.00 (EATS)  87.70

VET — 100F — PX — V — 0.00 — 100.00

TOTALS FOR ALL 2 ITEMS ---DISABILITY PENSION 187.70

NOTE 1:The Australian Disability Pension percentage rate (in this example "100%") must be data collected in each case.

NOTE 2:100F = 100% BP RATE FOR AN OFFICER.

(d)The adjustment that has to be made is as follows:

.where, for example, the Australian DP is 100% rate equivalent to $A187.70 and the NEW British rate of 100% for an officer is equivalent to $A200 the screen entries will be:

DISABILITY PENSION (DP)

ADJUSTMENT — PENSION

DP RATE — AMOUNT — AMOUNT

ACTION — REL — TYPE — ENT — RECIPIENT(P/F)REASON(P/F)

C — VET — 100 — X — V — 187.70 EATS — 0000.00

C — VET — 100F — PX — V — 0.00 EATS — 200.00

MORE:  TOTALS FOR ALL 2 ITEMS --- DISABILITY PENSION:200.00

.we have added an Action of "c" (change).

.Because the British rate is more than the Australian rate, we do not pay any Australian pension; therefore the Australian adjustment is the equivalent of the full Australian 100% DP rate of $A187.70 and the entry for the British rate is the NEW RATE OF $A200 for an officer 100% rate.

Enter new details on the action schedule.

(d)Submit (SU) the case to MS for a 50, obtain the con. no. and enter that onto the schedule, obtain the supporting documents (only for a case with an SP component) and forward to the Delegate for determination.

10.It will not be necessary to prepare a D408, or equivalent in these cases; the schedule produced for dual SP/EATS/COMP cases to record the changes to the PMF may be used as an authority provided each record on that schedule is endorsed with the consecutive number automatically produced by the Pension Processing System and is signed by the delegate determining the case, prior to transmission to Pension Payments Section.  All such cases can be identified from the manual schedules listed by the ALO2, ALO3 runs (i.e., group 100, 200) and the new British rates should be deducted from the examiners' entries on those schedules.

NOTE:All entries on these schedules must be in Australian dollars.

ADVICES

11.  Arrangements must be made for an advice for those cases where an advice is considered necessary.

DAVID HOLLAWAY

DIRECTOR

ADP SYSTEMS

ATTACHMENT A

TIMETABLE FOR BRITISH DEVALUATION EFFECTIVE 8 MARCH 1990

STAGE 117 February 1990

RUN — PURPOSE

RSPYAL01 — Listing of cases requiring manual action

RSPYAL02(Z cards in CPP.BRITRVAL.CNTL(AL02RUN1)

RSPYAL03

RSPYAL04 — Composite/benefit in file no or alpha order within composite group order required               for NSW Qld (i.e. use AL run book sort card 5).  Job NPALA23A

OUTPUTS:Listing Journal:  Schedules - use 3 part paper and double spacing

$PPBBSPR — Report of Service Pensioners with British DP only

THE BENEFITS CONTACT OFFICER WILL BE

RIC MOORE(062) 825494 Bh

(062) 823913 Ah