Income stream reviews 110-02060000

All income stream providers, other than Self-Managed Superannuation Funds (SMSF) and Small Australian Prudential Regulation Authority (APRA) Superannuation Funds (SAF) must supply details electronically to Services Australia for the review.

The provider receives a system-generated request for details. The provider's details are matched against the customer products and are used to complete reviews for:

• account-based income streams
• market-linked income streams
• defined benefit income streams
• military invalidity pension income streams

The reviews are in August and February for:

• account-based and market-linked income streams, and
• on the indexation date for defined benefit and military invalidity pension income streams

AISR includes:

• Customers in receipt of an income support payment
• Low Income Health Care Card (LIC) holders and their partners
• Commonwealth Seniors Health Card (CSHC) holders and their partners are included in the review process for account-based income streams only. This process will not update other income stream types for CSHC holders

Residential Care (RCA/CUR) only customers are not included in the AISR review process.

If the agency is unable to match a customer’s product to details from the income stream provider:

• a customer based review process generates for customers receiving an income support payment
• the system will send the customer a letter asking them to complete the review online. Review letters are not sent to LIC and CSHC holders

See:

• Income stream customer reviews - defined benefit or military invalidity pension income streams
• Income stream customer reviews - account-based and market-linked income streams
• the Resources page

Customers who own an income stream product may contact to ask why:

• they have not received an income stream review letter, or
• their income stream details have or have not been updated

Use the staff scripts on the Resources page to provide details to the customer about the new automated process.

If the automated process fails, the system will send the customer a letter.

Note: the review letters are only sent to customers who are receiving an income support payment. They are not sent to LIC and CSHC holders.

If the customer contacts after the letter has been sent, tell them:

• their details will not be updated electronically
• they must respond with the details requested in the review letter by the due date to make sure their payment continues

If the customer has opted to receive letters from Centrelink online, they will receive an SMS or email to say the review letter is in their myGov inbox.

Fast Notes are used when an income stream review needs to be actioned urgently.

Income stream providers, other than Self-Managed Superannuation Funds (SMSF) and Small Australian Prudential Regulation Authority (APRA) Superannuation Funds (SAF) supply details each April to check the coding accuracy of the following income streams:

• Lifetime (LIS)
• Life Expectancy (LIE)
• Term (TIS)

These details are not applied automatically to update the income stream. It is an extra check to make sure the customer has the correct details recorded for these products. Any discrepancies identified are handed-off for follow up. For more details, see Income stream reviews - coding accuracy

An income stream review is processed in either Process Direct or Customer First:

• Process Direct:
• August and February electronic review of account-based and market-linked income streams
• Defined benefit and military invalidity pension annual and bi-annual indexation electronic reviews
• Customer based letter reviews if no automated review
• Coding accuracy electronic reviews
• Customer First:
• SAL reviews in August for account-based and market-linked income streams from SMSFs or SAFs
• Actuarial reviews in August for asset-test exempt lifetime and life expectancy income streams from SMSF or SAFs
• Indexation reviews for lifetime, lifetime pooled, life expectancy and term income streams
• Review of term income streams with an RCV on the expiry of the product term

The Income Stream Review guided procedure can only be used for updates in Customer First.

See the Process page to identify which Operational Blueprint will provide assistance when coding an update.

See Resources for instructions on how to identify the type of review requiring action.

Various types of income stream products are reviewed to make sure payments are correct for customers getting income support payments.

LIC holders are only included in the electronic review process.

CSHC holders are only included in the electronic review process for account-based income streams.

LIC and CSHC holders are not included in any letter income stream reviews.

Reviews are completed for current and suspended customers on income support payments, if the customer or their non-customer partner has:

• account-based income streams (also known as account-based pensions) and/or market-linked income streams (also known as term allocated pensions) which have an account balance
• income streams with payments subject to indexation in line with the Consumer Price Index (CPI) These include:
• defined benefit income streams
• military invalidity pension income streams
• lifetime income streams
• life expectancy income streams
• lifetime pooled income streams
• term income streams
• income streams with payments subject to a fixed indexation rate. These include:
• lifetime income streams
• life expectancy income streams
• lifetime pooled income streams
• term income streams
• lifetime and life expectancy income streams requiring an actuarial certificate and are:
• from a self-managed super fund (SMSF) or small APRA super fund (SAF)
• fully or partially exempt from the assets test
• lifetime, life expectancy and term income streams which have an assessable asset value and where the residual capital value (RCV) is zero or less than 100%
• term income streams with a Residual Capital Value (RCV) on the expiry of the product term

The initiation date for income stream reviews varies depending on the type of income stream product being reviewed and its characteristics.

Biannual income stream electronic reviews are initiated in August and February under AISR where it is an:

• account-based income stream, or
• market-linked income stream, and
• the income stream is not from a self-managed super fund (SMSF) or small APRA super fund (SAF)

Annual letter reviews are initiated in August where it is an:

• asset test exempt lifetime or life expectancy income stream from an SMSF or SAF requiring an actuarial certificate
• account-based and market-linked income streams from an SMSF or SAF

Indexation reviews are conducted on the Consumer Price Index (CPI) indexation date where payments from the income stream are subject to CPI indexation. These reviews include:

• defined benefit income streams
• military invalidity pension income streams
• lifetime income streams
• life expectancy income streams
• lifetime pooled income streams
• term income streams

These may be annually or biannually for some income streams. The indexation reviews for defined benefit and military invalidity pension income streams are under AISR whereas the reviews for other product types are letter reviews.

Income streams are auto reviewed annually on the indexation date where payments from the income stream are indexed at a fixed rate. These include:

• lifetime income streams
• life expectancy income streams
• lifetime pooled income streams
• term income streams

Income streams are reviewed on the expiry of the product's term as letter reviews where they are:

• term income stream, and
• the income stream has a Residual Capital Value (RCV) amount greater than zero

Income streams are auto reviewed for the recalculation of the assessable asset value where the RCV is zero or less than 100%. The recalculation is done annually if the payment frequency is annual; otherwise, it is done every six months. This includes:

• lifetime income streams
• life expectancy income streams
• term income streams

Electronic annual income stream coding accuracy reviews are initiated in April under AISR where it is a:

• lifetime income stream
• life expectancy income stream,
• term income streams stream, and
• the income stream is not from a self-managed super fund (SMSF) or small APRA super fund (SAF)

When the income stream product is reviewed under the AISR process, the system will generate an information request notice. It is sent directly to registered product providers or their administrators, at the appropriate review time. The notice will advise what information is needed and by when. The provider sends the information electronically to Services Australia.

If the customer’s product is not matched to the provider’s information, the customer needs to complete an income stream review, (if they are getting an income support payment). The system will generate an income stream review letter asking the customer for the information. This letter will include a due date.

The type of information needed, and how they provide it to the agency will differ, depending on the type of income stream under review. Income stream review letters may also list the income streams of the customer's partner, even if the partner is not receiving an income support payment. The customer must give all of the requested information for each product listed.

If the customer has opted to receive letters online, they will receive an SMS or email to say the review letter is in their myGov inbox.

Requests for information to update income streams owned by a non-current partner are sent to the customer.

Where the customer or partner is unable, or unwilling to provide information due to Family and Domestic Violence (FDV), escalate to AISR support. AISR support will request the information directly from the provider.

The details needed to complete the various types of income stream reviews is listed below.

Account-based and market-linked income stream customer based reviews:

• in August for income streams from SMSF or SAF
• in October if no automated review

For account-based income streams that started before 1 January 2015 and are assessed under the old rules and additionally for market-linked income streams:

• what the account balance was on 1 July of the current year
• the new annual income amount for this financial year, and
• any lump sums taken out in the last financial year, other than regular income payments

For account-based income streams that started on or after 1 January 2015, or before 1 January 2015 and is subject to deeming:

• the 1 July balance or a later account balance thereafter

Account-based and market-linked income stream customer based reviews in April

For account-based income streams that started before 1 January 2015 and are assessed under the old rules, and additionally for market-linked income streams:

• the most recent account balance as at 31 December or later in the current financial year
• any lump sums taken out in the current financial year, other than regular payments

For account-based income streams that started on or after 1 January 2015, or before 1 January 2015 and is subject to deeming:

• the most recent account balance as at 31 December or later

Indexation reviews

Defined benefit and military invalidity pension income streams

The following details are referred to and used:

• the new fortnightly income amount
• any tax free component amount
• the tax free component method

Note: until a system release is available, military invalidity pension income streams must be coded as defined benefit income streams.

Lifetime, Lifetime pooled, Life Expectancy and Term income streams

The following details are referred to and used:

• the new income amount
• the frequency of payment

Asset test exempt lifetime and life expectancy income streams from a Self-Managed Super Fund (SMSF) or Small APRA Super Fund (SAF) in August

For these income streams, an actuarial certificate is needed. This must:

• state there is a high probability the fund can keep paying the income stream
• specify an 'in force' period of 1 July to 30 June of the financial year in which certification occurs, or
• have a certification date on it showing it is current - between 1 July and 31 December of the current year

Review of term income streams with a residual capital value (RCV)

For these income streams, the customer must advise what they or their partner have done with the remaining money received at the end of the product term.

If the money has been:

• reinvested, they must provide full details of the new investment
• used to purchase a new income stream, they must provide a new income stream schedule issued by the income stream product provider
• used for any other purpose, for example purchasing other assets or funds used towards the principal home. Delegate is to determine if verification is needed

AISR - Account-based and Market-linked income streams

Income stream product providers or their administrators have 28 days from the date of issue on the request notice to provide the data electronically. If there has been no response within that period, the system will send a reminder letter. The provider will have another 28 days to respond.

The review will close on the 57^th day. If there is no automated review or other update, the customer will be sent a review letter in April (for the February review), or October (for the August review cycle) asking them to provide the required details.

AISR - Defined benefit and military invalidity pension income streams

Income stream product providers or their administrators, have 28 days from the indexation date shown on the information request notice, to provide the requested data electronically.

If there has been no response by day 28 the review period will close. If there is no automated review or other update, the system will send the customer a review letter asking them to provide the required details.

October and April Income Stream Letter Reviews if no automated review

Customers and/or their partners have 21 days from the date of issue on the review letter to provide the details. If after 28 days there has been no response, the system will send a reminder letter. If after another 28 days there has been no response, the system will suspend their payments. Their payment will cancel 13 weeks from the date of suspension if there has still been no reply.

Coding accuracy review under AISR - Lifetime, Life Expectancy and Term income streams

Income stream product providers or their administrators have 28 days from the date of issue on the request notice to provide the data electronically. The customer will not be sent a review letter. Any discrepancies identified are handed-off for follow up. See Income stream reviews - coding accuracy.

August letter review for income streams from SMSFs or SAFs

The customers and/or their partners on income support payment will be asked to provide a new actuarial certificate by 31 December of the current year. A reminder will be sent in mid-November of that same year. If the actuarial certificate is not provided, a Manual Follow-up (MFU) will be produced for a Complex Assessment Officer (CAO) to action.

For account-based income streams and market-linked income streams, customers and/or their partners on income support payment will be asked to provide details by 31 December of the current year. A reminder will be sent in mid-November of the same year. If the customer has not provided details by 31 December, the system will suspend their payments. Their payment will cancel 13 weeks from the date of suspension if there has still been no reply.

Indexation reviews for lifetime, lifetime pooled, life expectancy and term income streams

Customers and/or their partners have 21 days from the date of issue on the review letter to provide the requested details. If after 28 days from the date of issue there has been no response, the system will send a reminder letter. If after another 28 days there has still been no response, the system will suspend their payment. Their payment will cancel 13 weeks from the suspension where there has been no reply.

Review of term income streams with a residual capital value

Customers and/or their partners have 21 days from the date of issue on the review letter to provide Centrelink with the requested details. If after 28 days from the date of issue of the original letter there has been no response from the customer or their partner, the system will send a reminder letter. If this additional 28 days lapses and the customer or their partner does not respond to the reminder letter, the system will suspend their payment. Their payment will cancel a further 13 weeks from the suspension where there has been no reply from the customer or their partner.

If the details for an account-based or market-linked income stream review has not been received electronically during August and February, the customer (if on an income support payment) will be sent a review letter in October and April. This will instruct them to provide the requested details online. See Income stream customer reviews – account-based and market-linked income streams.

See the Resources page for more details including finalising online income stream review activities.

These reviews are completed online. See August income stream reviews.

Lifetime, lifetime pooled, life expectancy and term income streams

These reviews cannot be completed online. Customers can either return the review letter or provide the new income amount over the phone.

See Income stream indexation reviews.

Defined benefit and military invalidity pension income streams

These reviews cannot be completed online. Customers have to return the income stream schedule or provide a similar schedule, completed by their provider. Details cannot be accepted verbally, for example, in person or by telephone.

See Income stream customer reviews - defined benefit or military invalidity pension income streams.

These reviews cannot be completed online. Customers have to return the review letter with details of what they have done with the money received at the end of the term. If the proceeds have been used to purchase a new income stream, an income stream schedule is needed.

See Review of income stream products with a residual capital value.