Adding or updating a military invalidity pension income stream 108-24120314

Note: before a system release in December 2024, military invalidity pension income streams (MYP) were coded as defined benefit income streams (DEF).

Appropriately skilled Service Officers can process new and existing military invalidity pension income streams at the point of contact for all payment types.

For existing and new military invalidity pension income streams, the customer must supply:

• a Details of Income Stream Product (SA330), or
• an income stream schedule

For new military invalidity pension income streams the customer may also need to supply both:

• advice from Commonwealth Superannuation Corporation (CSC) of the approval of the invalidity pension when the date of approval is after the date of claim/grant of an income support payment (ISP), Residential Care Assessment (RCA) or Low Income Health Care Card (LIC), and
• evidence of any lump sum payment received, when the date of receipt is after or within the 12 months before the date of claim/grant of an ISP, RCA or LIC
• the evidence must include the gross amount paid, date paid, the dates the payments are for and how the funds were used

Date of assessment as an income stream:

• is from the date the person was notified by CSC about the approval of their invalidity or TPD pension
• is not the date the person applied for a pension or a backdated commencement date

Date of assessment of lump sum arrears payments for the period before the approval:

• is the date of receipt, for the number of days equal to the period of arrears, up to a maximum of 52 weeks

Note: before 7 December 2020 arrears were assessed as income in the fortnight of receipt only. For a date of receipt before 7 December 2020 and date of grant, no assessment of the lump sum arrears is required.

The documents are provided by CSC for an invalidity pension from:

• Military & Benefits Scheme (MBS), or
• Defence Force Retirement and Death Benefits Scheme (DFRDB)

The schedule can be:

• the one-page Military Invalidity Pension Income Stream Schedule, see the Resources page
• Defined Benefit Income stream Schedule and Military Invalidity Pension (SA438), or
• a provider issued schedule with the same information as the Details of Income Stream Product (SA330)

The special reduction amount is the tax-free component (TFC) of the income stream worked out under Subdivision 307 - C of the Income Tax Assessment Act 1997, if it were assumed that the military invalidity pension income stream is a superannuation income stream within the meaning of that Act. The income stream schedule issued by CSC will contain this TFC information for the special reduction amount and social security purposes.

It is not the TFC for taxation purposes. Other documents, for example CPI indexation advice letters from CSC, may advise the TFC for taxation purposes only and the amount on that letter cannot be accepted as the special reduction amount.

If the customer has supplied a physical copy of an income stream schedule to a service centre, upload a copy of the schedule to the customer's record.

If the customer is responding to an indexation review, see Income stream indexation review.

Discuss all income and asset updates required (for example other income streams, shares, foreign income).

Only proceed with the coding if all updates can be completed.

If there are concerns with the legitimacy of the customer's information, see Coding income and assets for Centrelink payments and services.

If the customer advises they are entitled to a Special Rate Disability Pension (SRDP) from DVA, even if at a Nil rate, check if they were granted SRDP. SDRP may be reduced due to Commonwealth Super income streams including military invalidity pensions. The customer must provide supporting documents from DVA that shows the calculation of the reduction amount. The Commonwealth Super used to reduce the SRDP is exempt income for the Income Support assessment.

Check the Document List (DL) for a DVA clearance DOC to confirm if the customer has been granted SRDP.

Note: where a full clearance is not required, the DVA Clearance Team will place either a ‘DVA SRDP Clearance not required’ or ‘DVA MRCA clearance not required' DOC on the record.

SRDP clearance DOCs

If a DOC titled ‘DVA Full clearance’ advising SRDP has been granted and the Veteran Affairs Pension Summary (DVAS) screen has been coded:

• request further information from the customer to provide SRDP assessment/reassessment letter/s issued by DVA

If a DOC titled ‘DVA Clearance not required’ advising SRDP has been granted:

• send a request for a full DVA clearance for SRDP and include the following text, 'SRDP request full clearance'. See Payments from the Department of Veterans' Affairs (DVA) and referrals to the DVA Clearance Team. Further information will be required from the customer to provide SRDP assessment/reassessment letter/s issued by DVA

No SRDP clearance DOC found

• Contact the customer to confirm if they receive SRDP. Follow the Genuine attempts to contact by phone process
• If customer advises that they receive SRDP (even at zero rate):
• send a request for a full DVA clearance for SRDP and include the following text, ‘SRDP request full clearance’
• See Payments from the Department of Veterans' Affairs (DVA) and referrals to the DVA Clearance Team. Further information will be required from the customer to provide SRDP assessment/reassessment letter/s issued by DVA
• If contact is unsuccessful:
• do not request SRDP information from the customer
• DOC the record for each phone contact attempt
• Contact the FINS Helpdesk for escalation to obtain the required details

If details are required for SRDP, the customer must provide SRDP assessment/reassessment letter/s issued by DVA from ISP, RCA or LIC claim grant date or grant of SRDP, whichever is later.

Has the customer provided the income stream schedule and all other required information?

• Yes, go to Step 4
• No, go to Step 3

Tell the customer all information is needed before any change can be made, to make sure they get the correct entitlement. See Requesting information (CLK):

• The customer must provide a schedule for each income stream they own
• Ask for the information to be returned within 14 days

Note: where the customer or partner is unable, or unwilling, to provide information due to Family and domestic violence, escalate to AISR support. AISR support will escalate to arrange the request of the information directly from the provider.

Procedure ends here until documents are returned.

If the customer or their partner is advising:

• of a commutation of the income stream, see Commutation of asset test exempt (ATE) income streams
• of a new income stream, see Table 2, Step 1
• suspension, restoration or medial reassessment of their income stream payments, go to Step 9
• gross income or other changes to an existing income stream, go to Step 5

While in the income stream owner's record, go to the Income Streams (SUPS) screen. If required to switch records between partners, use .

Are there details for the income streams recorded?

Note: the product type code should be MYP – MILITARY INVALIDITY PENSION but may not have been converted from DEF - defined benefit.

• Yes, and it is:
• already MYP go to Step 7
• still DEF go to Step 6
• No, see Table 2, Step 1

To cancel the product:

• select Edit to open the existing SUPI entry
• cancel the current product by selecting OTH – Other in Product Cancellation Reason
• Save

Check the data shows nil income and asset value in the Income Stream Details table:

• Check the Date of Event (DOV) in the table:
• If updating for a CPI date or claim on or after 7 December 2024, use the date of the CPI or grant
• Use Today if converting from DEF to MYP
• If the DOV has defaulted to different DOV:
• select Add to add a new entry to the SUPV table
• key the correct DOV, select Save
• select Delete next to the incorrect DOV line
• Note the DOV and existing data to recode as MYP

Go to Table 2, Step 3

Select relevant to the appropriate product from the Income Streams (SUPS, SUPI, SUPV) table and select Edit on the last update to access the Change Income Stream Details screen.

If the income stream is updated automatically, Channel Type will be ISP (income stream provider) for any previous update in the last 12 months. If a recent update is ISP and correct, and the customer only wants to update the income, they can await the provider to supply the next update.

Is there an update with channel type ISP within the previous 12 months?

• Yes:
• Tell the customer the system will update their income stream. The provider will supply this information directly to Services Australia for the review.
• If the customer wants to await the provider data. Procedure ends here
• No:
• Check the provider name and product reference number on the customer record match the income stream schedule. An error will prevent bulk updates

Use the Income and Assets Update to update the income stream:

• Enter START into the Super Key
• Select Income and Assets Update from the Task Selector
• Select Income Streams (SUPS/SUPI/SUPV)
• And any additional income and assets types required for the update being completed
• Select Start

To update:

• Select relevant to the appropriate product from the Income Streams (SUPS, SUPI, SUPV) table
• Check the details are correct

On the Income Stream Details line select Add to create a new entry and make the necessary changes.

Event Date:

• Date of the change, for example:
• CPI date for an update of a current customer/partner
• Claim date if old SUPS coding exists but it hasn’t been on Income Support Payments for some time
• Multiple dates if period required covers a period before and after a CPI is applied. Both Military & Benefits Scheme (MBS) and Defence Force Retirement and Death Benefits Scheme (DFRDB) are increased twice a year. The increases are applied December/January and June/July each year
• Cannot be coded with a future date

Gross Income Amount:

• Code new fortnightly gross income amount, include any additional income amount a customer or their partner receives for their child
• If the gross income amount is annual or monthly, calculate the fortnightly amount. If annual, divide the annual amount by 26. If monthly, multiply the monthly amount by 12 and divide the result by 26

Income Frequency:

• Select 2we – fortnightly. Income frequency must be fortnightly to enable bulk updates and indexation reviews

Super Child Amount:

• Record the amount of any additional income received for children
• The system will subtract this amount from the gross income amount when determining the assessable income for the customer
• Leave blank if Nil

Super Child Number:

• Record the total amount of children for whom additional payments are received
• Leave blank if Nil

Inc Ded Amt Calc Method:

• Defaults to M for special reduction amount which is only valid for military invalidity pensions

Special reduction amount:

• Record the special reduction amount as stated on the schedule. The amount on indexation letters cannot be accepted as the special reduction amount

Other Deduction Type:

• Possible codes:
• Blank – use if no other deductions allowed
• ‘F’ – Family Law Split (FLS)
• ‘S’ – Special Rate Disability Pension (SRDP) – Only for Commonwealth Superannuation account-based pensions and only if approved by Level 2 helpdesk
• ‘B’ – Code if customer has both SRDP and FLS reductions

Other Deduction Amount:

Note: this field is not used when Other Deduction Type is blank.

• Special Rate Disability Pension (SRDP)
• Recipients of SRDP from Department of Veterans' Affairs (DVA) may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. Example. DFRDB and MBS
• The SRDP is reduced at 60% by an offset for the Commonwealth superannuation they receive. The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes. The amount shown as Superannuation Offset on the SRDP letters can be used to determine the fortnightly amount used as an offset and is exempt
• Exception: If SRDP has reduced to NIL – then only the amount required to reduce it to NIL is exempt, see Resources for calculating the fortnightly reduction amount from DVA documents. This information needs to be included in the DOC when updates are finalised
• Family Law Split (FLS)
• Depending on the agreement/court order involved, it is possible the superannuation fund has split the gross income and is only paying the customer their remaining share. For those cases no additional reduction is required.
• However, if the superannuation fund was unable to split the payment, then the fortnightly amount the customer must legally pay to the other party can be coded here to reduce the gross income assessed. For example: The payment may be a set amount of $200 per fortnight or could be 20% of the gross. See References for link to relevant instructions. This information needs to be included in the DOC when updates are finalised.
• Both SRDP & FLS
• Add together both fortnightly deduction amounts and code the total. This information needs to be included in the DOC when updates are finalised.

Select Save when updates completed:

• Update Receipt Date, Channel, Service Reason (if required) and select Save
• Check the payment outcome is as expected on the Entitlements (ELD). Only select Finish when the outcome is determined to be correct
• If the Process Direct Income and Assets workflow has been used, NOTES will be prepopulated automatically and display for review when Finish is selected
• At this point any more information can be added, as per Online Document Recorded (ODR)
• Once NOTES are complete, Finalise. The transaction will complete, and the NOTES replicate to the Document List (DL).

Procedure ends here.

Has the customer and/or their partner contacted to advise of suspension, restoration or medical reassessment of payments from a military invalidity pension income stream?

• Yes, refer to FINS Helpdesk who will seek advice from the Income Support Means Test team on assessment and coding. Procedure ends here.
• No, go to Table 1, Step 4

Schedule needed for a military invalidity pension income stream.

Has the customer and/or their partner provided:

• Details of Income Stream Product (SA330) and
• advice of approval of military invalidity pension
• evidence of any lump sum approval as required

For requirements see Table 1, Step 1.

• Yes, go to Step 3
• No, go to Step 2

• See Requesting information (CLK)
• The customer must provide a schedule for each income stream they own
• Lump sum arrears evidence must include:
• gross amount paid
• date paid
• dates payments relate to
• the use of the funds
• Ask for the information to be returned within 14 days

Note: where the customer or partner is unable, or unwilling, to provide information due to Family and domestic violence, escalate to AISR support. AISR support will escalate to arrange the request of the information directly from the provider.

Procedure ends here until documents returned.

Note: before a system release in December 2024, military invalidity pension (MYP) income streams were coded as defined benefit (DEF) income streams.

For new claims:

• all updates are done within the new claim activity

For current customers:

• Launch the Process Direct Income and Assets Update workflow. To do this access the customers record in Process Direct Customer Summary
• Key START into the Super Key
• Select Income and Assets Update from the Task Selector
• Select Income Streams (SUPS/SUPI/SUPV)
• Select Start
• Select Add to access the Create Income Streams (SUPS/SUPI/SUPV) screen.

Code the Income Stream Details:

• Product Type:
• Select MYP – MILITARY INVALIDITY PENSION
• Income stream from SMSF/SAF:
• Defaults to No. SMSF or SAF providers cannot pay a military invalidity pension
• SMSF/SAF Actuarial Cert Provided:
• Defaults to No. SMSF or SAF providers cannot pay a military invalidity pension
• Provider or SMSF/SAF Name:
• Select the provider’s name
• There are the only two valid providers for military invalidity pensions. The provider’s name must be correct to enable bulk updates and indexation reviews
• Provider or SMSF/SAF ABN:
• The ABN will auto populate based on the Provider or SMSF/SAF name
• Note: the ABN may not match the schedule
• Product Name:
• Invalidity Pension
• Product Reference Number:
• The product reference number is unique to each income stream and may be shown as the product reference number, account number or policy number on the schedule
• Make sure the correct product reference number is recorded exactly as it appears on the schedule
• Do not code the provider ABN or product name as the product reference number
• The number must be correct to enable correct bulk indexation updates
• For information on recording DFRDB and Military & Benefit Scheme
• Product Reference Numbers in the correct format, see the Resources page for attached guide document.
  Note: the schedules will have either MS or DF within the last 3 characters of the product reference number (PRN) to assist identifying these
• Event Date/Commencement Date:
• Record the commencement date
• If a military invalidity pension income stream is acquired by a reversionary beneficiary, code the commencement date of the original income stream that is, when the primary beneficiary started the income stream
• Note: this is not the event date as indicated by the field title
• Purchase date:
• Leave blank, this field must not be recorded
• Term or Relevant Number:
• Leave blank to allow the system to calculate the correct relevant number
• The system will insert the life expectancy of the customer at the start date of the income stream. For partnered customers, the system will insert the life expectancy of the partner who has the longer life expectancy. Note: the relevant number is not needed for income streams started from 1 July 2007
• Section 9A/B/BA/BB Compliant Ind:
• Defaults to Yes
• All military invalidity pension income streams are s9BB compliant and 100% asset test exempt (ATE) regardless of start date
• Start Date Original Commuted Product:
• Leave blank
• Product Cancellation Reason:
• Leave blank when adding a new income stream

Select the date for the Event Date field using the following information.

Reversionary beneficiary:

• The event date is the day after the date of death of the primary beneficiary (usually the deceased partner), which is the date the customer (reversionary beneficiary) is entitled to the income stream payment. The PRN will usually have another digit at the end (e.g. MSA or DFA) if it is a reversionary income stream.
• It can include lump sum arrears plus the regular ongoing payments
• Normally lump sum arrears are paid for the period from day after date of death to the date regular payments starts. Lump sum arrears are assessed as income from an income stream
• If reversionary from their partner the income stream is assessed from this date even though other income and assets are assessed at the end of the 16 week bereavement review where the customer does not advise the changes before the review
• Waiver provisions are effective from 9 May 2018:
• If the assessment of lump sum arrears results in a debt during the bereavement period for the surviving spouse, give consideration to waiver provisions contained under Class of Debt, Section 1237AB(1) of the Social Security Act 1991. See the References page for a link
• All conditions in the legislation must be met
• These waiver provisions cannot be used to waive debts outside the 14-week bereavement period, or debts which occurred before 9 May 2018
• If it is possible to waive the debt, record the information on a NOTE. Debt Staff will make the decision
• Note: if the date of reversion is prior to a CPI date that has passed, historical schedules will need to be requested. See Requesting information (CLK)

New claim and existing customers

The Event Date will be the:

• date the income stream was approved where the:
• income stream was approved after the customer’s grant date, or
• if the partner was in receipt of an income support payment, Residential Care Assessment (RCA), Low Income Health Care Card before the customer’s grant date the income stream was approved after the grant date of the partner
• the customer’s grant date where the:
• income stream started was approved before the customer’s grant date, and
• a partner was not in receipt of and ISP, RCA or LIC before the customer’s grant date
• the partner’s grant date where the :
• partner was in receipt of an ISP, RCA or LIC before the customer’s grant date, and
• the income stream was approved before the grant date of the partner

Note: the date the income stream was approved will be the date the person was notified by Commonwealth Superannuation Corporation about the approval of their invalidity or TPD pension. It is not the date they applied for this pension or a backdated commencement date.

Converting a defined benefit to a military invalidity pension

The Event Date will be the:

• CPI date if updating the gross income
• Grant date if updating upon reclaiming after 7 December 2024 or
• Today if converting from DEF to MYP

Note: there may be multiple date of events (DOV) required if period required covers a period before and after a CPI is applied. Both Military & Benefits Scheme (MBS) and Defence Force Retirement and Death Benefits Scheme (DFRDB) are increased twice a year. The increases are applied December/January and June/July each year.

If lump sum arrears were paid, go to Step 5

Otherwise, go to Step 6

After approval of a person’s military invalidity pension, they will usually receive arrears of periodic payments for periods before the approval. This can include years of back payment to the date of discharge. These arrears are treated as ordinary income.

The lump sum payments for the period before the approval are assessed as ordinary income from the date of receipt. This is assessed for the number of days equal to the period of the arrears. For example, if a customer received a back payment for 4 months, this is assessed for a period of 4 months, and up to a maximum of 52 weeks. This includes payments received before claiming where the period of assessment continues after the grant date, such as payments received within 12 months before the grant of a payment or concession.

Note: before 7 December 2020, these arrears were assessed as income in the fortnight of receipt only.

Assess arrears for the period on or after the date of approval as part of the ongoing periodic payments. Adjust any arrears to ensure that there is no double up of the amounts for the period on or after the date of approval.

These lump sum arrears may be assessed at the same time as ongoing periodic payments from the military invalidity pension. See Income from personal injury insurance schemes and disability benefits for coding instructions for lump sum arrears of the periodic payments prior to approval.

• Channel Type:
• Auto displays when Save is selected:
• CSO if manually updated by Services Australia staff
• ISP auto bulk updated with data sent by the provider, or
• WEB if updated using information provided online
• Gross Income Amount:
• Record the fortnightly gross income amount
• If the gross income reported by the provider is annual or monthly, calculate the fortnightly amount. If annual, divide the annual amount by 26. If monthly, multiply the monthly amount by 12 and divide the result by 26
• It must include any additional amount a customer or their partner receives for their child
• Income Frequency:
• Defaults to 2WE – fortnightly. Income frequency must be fortnightly to enable bulk updates and indexation reviews
• Super Child Amount:
• Record the amount of any additional income stream payments received for children
• The system will deduct this amount from the gross income amount when determining the assessable income for the customer
• Leave blank if Nil
• Super Child Number:
• Record the total number of children for whom additional payments are received
• Leave blank if Nil
• Inc Ded Amt Calc Method:
• Defaults to M which is special reduction amount valid for military invalidity pensions only
• Special reduction amount:
• Code the special reduction amount as per the Tax-Free Component as stated on the schedule. The amount on indexation letters cannot be accepted as the special reduction amount

Other Deduction amount method:

• Possible codes:
• Blank – use if no other deductions allowed
• ‘F’ – Family Law Split (FLS)
• ‘S’ – Special Rate Disability Pension (SRDP) – Only for Commonwealth Superannuation account-based pensions and only if approved by Level 2 helpdesk
• ‘B’ – Code if customer has both SRDP and FLS reductions

Other Deduction Amount:

Note: this filed is not used when the Other deduction amount method is blank

• Special Rate Disability Pension (SRDP):
• Recipients of SRDP from Department of Veterans' Affairs (DVA) may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. Example DFRDB and MBS
• The SRDP is reduced at 60% by an offset for the Commonwealth superannuation they receive. The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes. The amount shown as Superannuation Offset on the SRDP letters can be used to determine the fortnightly amount allowed as an offset and is exempt
• Exception: If SRDP has reduced to NIL – then only the amount required to reduce it to NIL is exempt, see Resources for calculating the fortnightly reduction amount from DVA documents. This information needs to be included in the DOC when updates are finalised
• Family Law Split (FLS):
• Depending on the agreement/court order involved, it is possible the superannuation fund has split the gross income and is only paying the customer their remaining share. For those cases no additional deduction is required
• However, if the superannuation fund was unable to split the payment, then the fortnightly amount the customer must legally pay to the other party can be coded here to reduce the gross income assessed. For example: The payment may be a set amount of $200 per fortnight, or could be 20 percent of the gross. See References for link to relevant instructions. This information needs to be included in the DOC when updates are finalised
• Both SRDP & FLS:
• Add together both fortnightly deduction amounts and code the total. This information needs to be included in the DOC when updates are finalised

• Assessable Income Amount:
• This is system calculated: gross income amount – (special reduction amount + other deductions amount) = assessable income
• Assessable Asset Amount:
• Blank as no asset value assessed
• Product Category:
• Automatically displays the category of the income stream for assessment purposes
• The system will display 12 - Assets Test Exempt Military Invalidity Pension Income Stream
• Select Save when the updates are complete
• Update Receipt Date, Channel, Service Reason (if required), then select Save

Check the Income Streams (SUPS, SUPI, SUPV) table displays the updated income stream details:

• Select Assess
• Check the payment outcome is as expected on Entitlements (ELD). Only select Finish when the outcome is determined to be correct
• If the Process Direct Income and Assets workflow has been used, NOTES will be prepopulated automatically and display for review when Finish is selected
• At this point any more information can be added, as per Online Document Recorded (ODR).

When NOTES are complete, Finalise. The transaction will complete and NOTES replicate to the Document List (DL).

Note: before a system release in December 2024, military invalidity pension (MYP) income streams were coded as defined benefit (DEF) income streams.

Appropriately skilled Service Officers can process new and existing military invalidity pension income streams at the point of contact for all payment types.

For existing and new military invalidity pension income streams, the customer must supply:

• a Details of Income Stream Product (SA330), or
• an income stream schedule

For new military invalidity pension income streams the customer may also need to supply both:

• advice from Commonwealth Superannuation Corporation (CSC) of the approval of the invalidity pension when the date of approval is after the date of claim/grant of an income support payment (ISP), Residential Care Assessment (RCA) or Low Income Health Care Card (LIC)
• evidence of any lump sum payment received, when the date of receipt is after or within the 12 months before the date of claim/grant of an ISP, RCA or LIC
• the evidence must include the gross amount paid, date paid, the dates the payments are for and how the funds were used

Date of assessment as an income stream:

• is from the date the person was notified by CSC about the approval of their invalidity or TPD pension
• is not the date the person applied for a pension or a backdated commencement date

Date of assessment of lump sum arrears payments for the period before the approval:

• is the date of receipt, for the number of days equal to the period of arrears, up to a maximum of 52 weeks

Note: before 7 December 2020 arrears were assessed as income in the fortnight of receipt only. For a date of receipt before 7 December 2020 and date of grant, no assessment of the lump sum arrears is required.

The documents are provided by Commonwealth Superannuation Corporations (CSC) for an invalidity pension from:

• Military & Benefits Scheme (MBS), or
• Defence Force Retirement and Death Benefits Scheme (DFRDB)

The schedule can be:

• the one-page Military Invalidity Pension Income Stream Schedule, see the Resources page
• Defined Benefit Income stream and Military Invalidity Pension (SA438), or
• a provider issued schedule with the same information as the Details of Income Stream Product (SA330)

The special reduction amount is the tax-free component (TFC) of the income stream worked out under Subdivision 307 - C of the Income Tax Assessment Act 1997, if it were assumed that the military invalidity pension income stream is a superannuation income stream within the meaning of that Act. The income stream schedule issued by CSC will contain this TFC information for the special reduction amount and social security purposes.

It is not the TFC for taxation purposes. Other documents, (for example, CPI indexation advice letters from CSC may advise the TFC for taxation purposes only and the amount on that letter cannot be accepted as the special reduction amount.

If the customer has supplied a physical copy of an income stream schedule to a service centre, upload a copy of the schedule to the customer's record.

If the customer is responding to an indexation review, see Income stream indexation review.

Discuss all the income and asset updates required (for example other income streams, shares, foreign income).

Only proceed with the coding if all updates needed can be completed.

If there are concerns with the legitimacy of the customer's information, see Coding income and assets for Centrelink payments and services.

If the customer advises they are entitled to a Special Rate Disability Pension (SRDP) from DVA, even if at a Nil rate, check if they were granted SRDP. SDRP may be reduced due to Commonwealth Super income streams including military invalidity pensions. The customer must provide supporting documents from DVA that shows the calculation of the reduction amount. The Commonwealth Super used to reduce the SRDP is exempt income for the Income Support assessment.

Check the Document List (DL) for a DVA clearance DOC to confirm if the customer has been granted SRDP.

Note: where a full clearance is not required, the DVA Clearance Team will place either a ‘DVA SRDP Clearance not required’ or ‘DVA MRCA clearance not required' DOC on the record.

SRDP clearance DOCs

If a DOC titled ‘DVA Full clearance’ advising SRDP has been granted and the Veteran Affairs Pension Summary (DVAS) screen has been coded:

• request further information from the customer to provide SRDP assessment/reassessment letter/s issued by DVA

If a DOC titled ‘DVA Clearance not required’ advising SRDP has been granted:

• send a request for a full DVA clearance for SRDP and include the following text, 'SRDP request full clearance'. See Payments from the Department of Veterans' Affairs (DVA) and referrals to the DVA Clearance Team. Further information will be required from the customer to provide SRDP assessment/reassessment letter/s issued by DVA

No SRDP clearance DOC found

• Contact the customer to confirm if they receive SRDP. Follow the Genuine attempts to contact by phone process
• If customer advises that they receive SRDP (even at zero rate):
• send a request for a full DVA clearance for SRDP and include the following text, ‘SRDP request full clearance’
• See Payments from the Department of Veterans' Affairs (DVA) and referrals to the DVA Clearance Team. Further information will be required from the customer to provide SRDP assessment/reassessment letter/s issued by DVA
• If contact is unsuccessful:
• do not request SRDP information from the customer
• DOC the record for each phone contact attempt
• Contact the FINS Helpdesk for escalation to obtain the required details

If details are required for SRDP, the customer must provide SRDP assessment/reassessment letter/s issued by DVA from ISP, RCA or LIC claim grant date or grant of SRDP, whichever is later.

Has the customer provided the income stream schedule and all other required information?

• Yes, go to Step 4
• No, go to Step 3

Tell the customer all information is needed before any change can be made to make sure they get the correct entitlement. See Requesting information (CLK):

• The customer must provide a schedule for each income stream they own
• Ask for the information to be returned within 14 days

Note: where the customer or partner is unable, or unwilling, to provide information due to Family and domestic violence, escalate to AISR support. AISR support will escalate to arrange the request of the information directly from the provider.

Procedure ends here until documents returned.

If the customer or their partner is advising:

• of a commutation of the income stream, see Commutation of asset test exempt (ATE) income streams
• of a new income stream, see Table 2, Step 1
• suspension, restoration or medical reassessment of their income stream payments, go to Step 9
• gross income or other changers to an existing income stream, go to Step 5

While in the income stream owner's record, go to the Pension/Annuities Summary (SUPS) screen.

Are there details for the income streams recorded?

The product type code should be MYP – MILITARY INVALIDITY PENSION but may not have been converted from DEF - defined benefit.

• Yes, and it is:
• already MYP go to Step 7
• still DEF go to Step 6
• No, see Table 2, Step 1

To cancel the product:

• 'S'elect the appropriate product from the SUPS screen
• Select OTH – Other in the Product Cancellation Reason field
• Complete the Source, DOR, and Action fields.
• Select Continue to go to the Pension/Annuities Details Variable (SUPVD) screen.
• Update the Date of Event (DOV) in the table:
• If updating for a CPI date or claim on or after 7 December 2024, use the date of the CPI or grant
• If converting from DEF to MYP use Today
• Note: the DOV and existing data to recode as MYP
• Select Continue and then return to the SUPS screen to add the product as MYP

See Table 2, Step 3

Go to the SUPS screen. Select the income stream product to go to the Superannuation Details Variable (SUPVD) screen.

If the income stream can be updated automatically, the channel type (Chnl Type) field on the SUPVD screen will be income stream provider (ISP) for any previous update in the last 12 months. If a recent update is ISP and correct, and the customer only wants to update the income, they can await the provider to supply the next update.

Is there an update with channel type ISP within the previous 12 months?

• Yes:
• Tell the customer the system will update their income stream. The provider will supply this information directly to Services Australia for the review
• If the customer wants to await the provider data. Procedure ends here
• No:
• Check the provider name and product reference number on the customer record match the income stream schedule. An error will prevent bulk updates

To update manually:

• 'S'elect the appropriate product from the SUPS screen
• check details on the Pension/Annuities Identification (SUPI) screen are correct. Select Continue

Update the Superannuation Details Variable (SUPVD) screen.

Event Date.

• Use the date of the change
• Examples:
• CPI date for a current customer/partner
• Claim date if old SUPS coding exists but it hasn’t been on Income Support Payments for some time
• Multiple dates if period required covers a period before and after a CPI is applied. Both Military & Benefits Scheme (MBS) and Defence Force Retirement and Death Benefits Scheme (DFRDB) are increased twice a year. The increases are applied December/January and June/July each year.
• The date cannot be in the future

Gross Income:

• Record the new fortnightly gross income amount, include any additional income amount a customer or their partner receives for their child
• If the gross income amount is annual or monthly, calculate the fortnightly amount. If annual, divide the annual amount by 26. If monthly, multiply the monthly amount by 12 and divide the result by 26

Income Frequency:

• Select 2we – fortnightly. Income frequency must be fortnightly to enable bulk updates and indexation reviews

Super Child Amount:

• Record the amount of any additional income received for children
• The system will subtract this amount from the gross income amount when determining the assessable income for the customer
• Leave blank if Nil

Super Child Number:

• Record the total amount of children for whom additional payments are received
• Leave blank if Nil

Inc Ded Amt Calc Method:

• Use M for special reduction amount which is only valid for military invalidity pensions

Special reduction rmount:

• Record the special reduction amount as stated on the schedule. The amount on indexation letters cannot be accepted as the special reduction amount

Other ded amount method:

• Possible codes:
• Blank – use if no other deductions allowed
• ‘F’ – Family Law Split (FLS)
• ‘S’ – Special Rate Disability Pension (SRDP) – Only for Commonwealth Superannuation account-based pensions and only if approved by Level 2 helpdesk
• ‘B’ – Code if customer has both SRDP and FLS reductions

Other Ded Amount: Leave blank if no other deductions apply:

• Special Rate Disability Pension (SRDP):
• Recipients of SRDP from Department of Veterans' Affairs (DVA) may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. E.g. DFRDB and MBS
• The SRDP is reduced at 60% by an offset for the Commonwealth superannuation they receive. The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes. The amount shown as Superannuation Offset on the SRDP letters can be used to determine the fortnightly amount used as an offset and exempt
• Exception: If SRDP has reduced to NIL – then only the amount required to reduce it to NIL is exempt, see Resources for calculating the fortnightly reduction amount from DVA documents. This information needs to be included in the DOC when updates are finalised
• Family Law Split (FLS):
• Depending on the agreement/court order involved, it is possible the superannuation fund has split the gross income and is only paying the customer their remaining share. For those cases no additional reduction is required
• However if the superannuation fund was unable to split the payment, then the fortnightly amount the customer must legally pay to the other party can be coded here to reduce the gross income assessed. For example: The payment may be a set amount of $200 a fortnight, or could be 20% of the gross
• See References for link to relevant instructions. This information needs to be included in the DOC when updates are finalised
• Both SRDP & FLS:
• Add together both fortnightly deduction amounts and code the total. This information needs to be included in the DOC when updates are finalised.

Complete the updates:

• Source, DOR, and Action fields
• Select Continue to return to the SUPS screen
• Check the SUPS screen displays the updated income stream details
• Check the payment outcome is as expected
• When the outcome is determined to be correct, complete the activity on the Assessment Results (AR) screen
• Record details on a DOC as per Online Document Recorded (ODR)

Procedure ends here.

Has the customer and/or their partner contacted to advise of suspension, restoration or medical reassessment of payments from a military invalidity pension income stream?

• Yes, refer to FINS Helpdesk who will seek advice from the Income Support Means Test team on assessment and coding. Procedure ends here
• No, see Table 1, Step 4

Schedule needed for a military invalidity pension income stream.

Has the customer and/or their partner provided

• a Details of Income Stream Product (SA330) or Schedule, and
• advice of the approval of the military invalidity pension, and/or
• evidence of any lump sum payment received, as required

For requirements see Table 1, Step 1.

• Yes, go to Step 3
• No, go to Step 2

• See Requesting information (CLK)
• The customer must provide a schedule for each income stream they own
• Lump sum arrears evidence must include:
• the gross amount paid
• date paid
• dates payment relates to
• use of the funds
• Ask for the information to be returned within 14 days

Note: where the customer or partner is unable, or unwilling, to provide information due to Family and domestic violence, escalate to AISR support. AISR support will escalate to arrange the request of the information directly from the provider.

Procedure ends here until documents returned.

Note: before a system release in December 2024, military invalidity pension (MYP) income streams were coded as defined benefit (DEF) income streams.

For new claims:

• All updates are done within the new claim activity

For current customers:

Go to the Pension/Annuities Identification (SUPI) screen and complete the following fields:

• Product Type Code:
• Use MYP for a military invalidity pension income stream
• Income stream from SMSF/SAF?:
• Use N for no. SMSF or SAF providers cannot pay a military invalidity pension
• SMSF/SAF Actuarial Cert Provided:
• Defaults to N for no. SMSF or SAF providers cannot pay a military invalidity pension
• Provider or SMSF/SAF Name:
• Select the 3 letter code for the provider’s name
• It will be either MBS for Military & Benefit Scheme or DFB for DFRDB
• These are the only 2 valid income stream providers for military invalidity pensions. The provider name must be correct to enable bulk updates and indexation reviews
• Income Stream Provider ABN:
• Leave blank
• Product Name:
• Record ‘Invalidity Pension’
• Product Reference Number:
• The product reference number is unique to each income stream and may be shown as the product reference number, account number or policy number on the schedule
• Make sure the correct product reference number is recorded exactly as it appears on the schedule
• Do not code the provider ABN or product name as the product reference number
• The number must be correct to enable correct bulk indexation updates
• For information on recording Commonwealth Super Reference Numbers in the correct format, see the Resources page for the attached guide document Note: the schedules will have either ‘MS’ or ‘DF’ in the last 3 characters of the product reference number (PRN) to assist identifying these.
• Purchase date:
• Leave blank, this field must not be used
• Commencement Date:
• Record the commencement date
• If a military invalidity pension income stream is acquired by a reversionary beneficiary, code the commencement date of the original income stream that is, when the primary beneficiary started the income stream
• Term or Relevant Number:
• Leave blank to allow the system to calculate the correct relevant number
• The system will insert the life expectancy of the customer at the start date of the income stream. For partnered customers, the system will insert the life expectancy of the partner who has the longer life expectancy. Note: the relevant number is not needed for income streams started from 1 July 2007
• Section 9A/B/BA Compliant Indicator:
• Select Y for yes
• Military invalidity pension income streams are all s9BB compliant and 100% asset-test exempt (ATE) regardless of start date
• Note: field title unable to be updated in Customer First to include S9BB – this is a display issue only
• Start Date Original Commuted Product:
• Leave blank
• Product Cancellation Reason:
• Leave blank when adding a new income stream
• Complete the Source, DOR, and Action fields
• Select Continue to go to the Pension/Annuities Details Variable (SUPVD) screen.

Select the date for the Event Date field using the following information.

Reversionary beneficiary:

• The event date is the day after the date of death of the primary beneficiary (usually the deceased partner), which is the date the customer (reversionary beneficiary) is entitled to the income stream payment. The PRN will usually have another character at the end e.g. MSA or DFA if it is a reversionary income stream.
• It can include lump sum arrears plus the regular ongoing payments
• Normally lump sum arrears are paid for the period from day after date of death to the date regular payments starts. Lump sum arrears are assessed as income from an income stream
• If it was the partners the income stream is assessed from this date even though other income and assets are assessed at the end of the 16 week bereavement review where the customer does not advise the changes before the review
• Waiver provisions are effective from 9 May 2018:
• If the assessment of lump sum arrears results in a debt during the bereavement period for the surviving spouse, give consideration to waiver provisions contained under Class of Debt, Section 1237AB(1) of the Social Security Act 1991. See the References page for a link
• All conditions in the legislation must be met
• These waiver provisions cannot be used to waive debts outside the 14-week bereavement period, or debts which occurred before 9 May 2018
• If it is possible to waive the debt, record the information on a DOC. Debt Staff will make a decision
• Note: if the date of reversion is before a CPI date that has passed, historical schedules will need to be requested. See Requesting information (CLK)

New claim and existing customers

• The Event Date will be the:
• date the income stream was approved where the:
• income stream was approved after the customer’s grant date, or
• if the partner was in receipt of an income support payment, Residential Care Assessment (RCA) or Low Income Health Care Card (LIC) before the customer’s grant date, the income stream was approved after the grant date of the partner
• the customer’s grant date where the:
• the income stream started was approved before the customer’s grant date, and
• a partner was not in receipt of an ISP, RCA or LIC before the customer’s grant date
• the partner’s grant date where the:
• the partner was in receipt of an ISP, RCA or LIC before the customer’s grant date, and
• the income stream was approved before the grant date of the partner

Note: the date the income stream was approved will be the date the person was notified by Commonwealth Superannuation Corporation about the approval of their invalidity or TPD pension. It is not the date they applied for this pension or a backdated commencement date.

Converting a defined benefit to a military invalidity pension

The Event Date will be the:

• CPI date if updating the gross income
• Grant date if updating upon reclaiming after 7 December 2024 or
• Today If converting from DEF to MYP

Note: there may be multiple date of events (DOV) required if period required covers a period before and after a CPI is applied. Both Military & Benefits Scheme (MBS) and Defence Force Retirement and Death Benefits Scheme (DFRDB) are increased twice a year. The increases are applied December/January and June/July each year.

If lump sum arrears were paid, go to Step 5

Otherwise, Go to Step 6

After approval of a person’s military invalidity pension, they will usually receive arrears of periodic payments for periods before the approval. This can include years of back payment to the date of discharge. These arrears are treated as ordinary income.

The lump sum payments for the period before the approval are assessed as ordinary income from the date of receipt. This is assessed for the number of days equal to the period of the arrears. For example, if a customer received a payment back of 4 months, this is assessed for a period of 4 months, and up to a maximum of 52 weeks. This includes payments received before claiming where the period of assessment continues after the grant date, such as payments received within 12 months before the grant of a payment or concession.

Note: before 7 December 2020, these arrears were assessed as income in the fortnight of receipt only.

Assess arrears for the period on or after the date of approval as part of the ongoing periodic payments. Adjust any arrears to ensure that there is no double up of the amounts for the period on or after the date of approval.

These lump sum arrears may be assessed at the same time as ongoing periodic payments from the military invalidity pension. See Income from personal injury insurance schemes and disability benefits for coding instructions for lump sum arrears of the periodic payments prior to approval.

• Channel Type (Chnl Type). Automatically displays how the income stream was updated:
• CSO if manually updated by Services Australia staff
• ISP auto bulk updated with data sent by the provider, or
• WEB if updated using information provided online
• Product Category:
• Automatically displays the category of the income stream for assessment purposes
• System will display 12 - Assets Test Exempt Military Invalidity Pension Income Stream
• Gross Income Amount:
• Record the fortnightly gross income amount
• If the gross income reported by the provider is annual or monthly, calculate the fortnightly amount. If annual, divide the annual amount by 26. If monthly, multiply the monthly amount by 12 and divide the result by 26
• It must include any additional amount a customer or their partner receives for their child
• Income Frequency:
• Record 2WE (fortnightly). Income frequency must be fortnightly to enable bulk updates and indexation reviews
• Super Child Amount:
• Record the amount of any additional income stream payments received for children
• The system will deduct this amount from the gross income amount when determining the assessable income for the customer
• Leave blank if Nil
• Super Child Number
• Record the total number of children for whom additional payments are received
• Leave blank if Nil
• Inc Ded Amt Calc Method:
• Defaults to M for special reduction amount which is valid for military invalidity pensions only
• Special reduction mount:
• Record the special reduction amount as per the Tax-Free Component stated on the schedule. The amount on indexation letters cannot be accepted as the special reduction amount

Other ded amount method:

• Possible codes:
• Blank – use if no other deductions allowed
• ‘F’ – Family Law Split (FLS)
• ‘S’ – Special Rate Disability Pension (SRDP) – Only for Commonwealth Superannuation account-based pensions and only if approved by Level 2 helpdesk
• ‘B’ – Code if customer has both SRDP and FLS reductions

Other Ded Amount. Leave blank if no other deductions apply

• Special Rate Disability Pension (SRDP):
• Recipients of SRDP from Department of Veterans' Affairs (DVA) may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. E.g. DFRDB and MBS
• The SRDP is reduced at 60% by an offset for the Commonwealth superannuation they receive. The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes. The amount shown as Superannuation Offset on the SRDP letters can be used to determine the fortnightly amount allowed as an offset and exempt
• Exception: If SRDP has reduced to NIL – then only the amount required to reduce the SRDP to Nil is exempt, see Resources for calculating the fortnightly reduction amount from DVA documents. This information needs to be included in the DOC when updates are finalised
• Family Law Split (FLS):
• Depending on the agreement/court order involved, it is possible the superannuation fund has split the gross income and is only paying the customer their remaining share. For those cases no additional reduction is required
• However, if the superannuation fund was unable to split the payment, then the fortnightly amount the customer must legally pay to the other party can be coded here to reduce the gross income assessed. For example: The payment may be a set amount of $200 per fortnight or could be 20% of the gross. See References for link to relevant instructions. This information needs to be included in the DOC when updates are finalised
• Both SRDP & FLS:
• Add together both fortnightly deduction amounts and code the total. This information needs to be included in the DOC when updates are finalised

• Assessable Income Amount - system calculated:
• Gross income amount – (special reduction amount + other deduction amount) = assessable income
• Assessable Asset Amount:
• This will be blank as no asset value assessed
• Complete Source, DOR and Action fields

Select Continue.

Check details on the Pension/Annuities Summary (SUPS, SUPI, SUPVD) screen are correct:

• Check the payment outcome is as expected on Assessment Results (AR) screen
• When the outcome is determined to be correct, complete the activity on the Assessment Results (AR) screen
• Make sure the Future Activity List (FAL) screen is checked and any review for the return of the documents completed

Record details on a DOC as per Online Document Recorded (ODR)