Pension Bonus Top-up Payment (PBTP) 065-07010040

A customer who has received a Pension Bonus payment may be entitled to a PBTP if their Age Pension rate has increased within the 13 week period after the start day of Age Pension, and the increase was due to a qualifying event.

The customer does not need to apply for the PBTP. In most cases, the assessment will be automatic and the customer notified if entitled and PBTP paid. No rejection letter will be sent to the customer if the review is automatically actioned and it is found the customer has no entitlement.

If a customer wants to apply for a formal review about not receiving a PBTP, they should apply for a formal review of the original amount of PBP paid.

Note: a recipient of Pension Bonus Bereavement Payment (PBBP) is not entitled to PBTP.

The automatic PBTP may be paid at week 16 if a customer or their partner is paid employment income for longer than one entitlement period (LOP) and it is assessed for 13 weeks or more. Refer these cases to the retirements helpdesk when processing the claim.

The following details the action required if automatic calculation for PBTP did not occur. If unsure whether payment has been made, see PBS Top-up Details (PBTD) screen.

Was the customer's Age Pension granted on or after 1 January 2008?

• Yes, go to Step 2
• No, there is no entitlement to PBTP. Procedure ends here

The customer must have a qualifying event. That is they have had an increase in their rate of payment within 13 weeks after the start day of Age Pension due to a reduction in Centrelink's assessment of their income and/or assets. This does not include any of the following:

• a change due to a Consumer Price Index (CPI) change to the rate of payment
• changes to allowable income and assets thresholds
• child free thresholds
• a change to the amount of Direct Deduction assessed

A qualifying event occurs when the customer's pension rate increases in the 13 week period because of a decrease in Centrelink's assessment of their income and/or assets which can be due to:

• a decrease in the customer's income and/or assets as notified by the customer
• a change in the exchange rate used to assess the customer's foreign income
• a change in the deeming rate used to assess a customer's financial investments
• a change in the deeming thresholds at which the different deeming rates come in

Has the customer had a qualifying event for payment of PBTP within 13 weeks after being granted Age Pension?

• Yes, go to Step 3
• No, there is no entitlement to PBTP. Procedure ends here

In most circumstances, the system will automatically assess whether the customer is entitled to a PBTP 16 weeks after the start day of Age Pension. The review will be on the Future Activities (FAL) screen with the review reason 'PBT'.

Check PBTP calculations for customers with reporting requirements.

If the record is suspended, when the 16 week review matures, the review activity will be completed. The top-up payment is to be made automatically at the next available opportunity for example, when payment is restored or cancelled.

A review cannot be manually deferred.

A Manual Follow-up (MFU) will be produced for the following circumstances when a manual calculation will be required:

• the customer has a change in marital status within the 13 week period after Age Pension start day
• a customer has previously received a PBTP but has since had a reassessment backdated to a date which falls within the 13 week period after Age Pension start day and a second PBTP will need to be calculated
• where the initial PBS claim is processed more than 16 weeks after the Age Pension start day
• when Age Pension is cancelled in the top-up period for a customer with reporting requirements

The Resources page contains a list of the MFU keywords.

Is there an MFU on the customer's record to manually calculate any PBTP entitlement?

• Yes, go to Step 6
• No, go to Step 5

• the customer may have an entitlement to PBTP but for some reason a review or MFU was not produced. In certain circumstances, a manual trigger can be entered on the Pension Bonus Payment (PBP) screen
• first check the PBP screen to see if there is a valid rejection reason, see Rejection Reason: field

A manual trigger is permitted if the:

• original Pension Bonus has been paid, the PBTP has not yet been determined and the 16 week top-up review is not on the Future Activity List (FAL) screen
• Pension Bonus claim was not lodged/processed within 16 weeks of the Age Pension start day

To activate the manual trigger go to the PBP screen and enter 'Y' in the Pay Pension Bonus Top-up?: field. This will automatically calculate the PBTP.

Procedure ends here.

Transfer the MFU to the Senior Processing Centre - region code 'PCT' to investigate if the customer is entitled to PBTP

The following steps are for PCT action only:

Check if the customer had a qualifying event for payment of PBTP.

The PBTP is calculated as the difference between the new notional Pension Bonus amount that has been calculated and the original Pension Bonus amount paid to the customer taking into consideration the customer meeting any reporting requirements.

Notional Pension Bonus amount

The notional Pension Bonus amount at each date of effect is calculated using the existing formula for Bonus calculation. However, for each calculation date of effect the notional Age Pension rate is used in place of the actual Age Pension rate used in the original bonus calculation. Care should be taken when there is a CPI increase in rate of Age Pension or a change in the income and assets thresholds within the 13 weeks after the start day. The notional Age Pension rate to use will always be based on the income and asset thresholds and pension rates payable at the start day.

See the customer's PBS Top-up Details (PBTD) screen for information in the Calculation Date: field, Annual Notional Pension Rate: field and Notional Pension Bonus Amount: field.

For customers who have multiple changes in their rate of pension within the 13 week period the system will calculate a notional Pension Bonus amount for every change and show the date and amount on the PBTD screen. The highest amount will be used for the calculation of the PBTP.

Note: customers who had a non-payment period during the 13 week period due to suspension of Age Pension (not due to cancellation), the whole 13 week period should be used for the purposes of determining the highest (notional) rate of Age Pension payable in that period. Prior to 20 September 2008 the system ignores any period after the restoration (from suspension) of Age Pension. From 20 September 2008, the system will auto check the full 13 week period.

Illness separated customers

A change in circumstances such as illness separation would not be a qualifying event for a top-up calculation. While an illness separated event has occurred in the top up period, their changed circumstances alone will not trigger a top up calculation. Only if a qualifying event occurred after their separation would their illness separated status be taken into account when calculating the notional Age Pension rate. The calculation of the notional rate of Age Pension is treated in the same manner as occurs for the standard calculation of an illness separated rate for example the illness separated rate is calculated using the partnered income/asset free area amount to calculate the relevant income/asset reduction amount.

This amount is subtracted from the maximum illness separated rate to establish the notional (illness separated) Age Pension amount which is then used in the calculation of the notional Pension Bonus amount.

Calculation of Pension Bonus Top up Amount

The highest notional Pension Bonus amount calculated is then compared to the original Pension Bonus amount and any positive difference is paid as a PBTP.

If a negative difference is found, no overpayment is raised.

• Yes, go to Step 8
• No, cancel MFU. Record details on a DOC. Issue rejection letter if the customer has requested PBTP. A rejection letter is not required if part of the automatic review process. Procedure ends here

• Yes, where the maximum rate of Age Pension was paid at the start day then no top-up is payable. Record details on a DOC. Procedure ends here
• No, go to Step 9

• Yes, check Pension Bonus Top-up Payment (PBTP) calculations for customers with reporting requirements. See Step 1 in the Calculating the Pension Bonus Top-up Payment table
• No, see Step 1 in the Calculating the Pension Bonus Top-up Payment table

The top-up period commences from Age Pension start day +1. Refer to the Effect Date: field of the first Age CUR line on the Pensions Status History (PNSH) screen and this ends on the 91st day. For example, Date of grant (start day) of Age Pension is 30 January 2012, Day 1 of the 13 week period is 31 January 2012 and day 91 is 30 April 2012.

See Daily Rate: field on the Pensions Rate Calculation (PRC) screen for the highest rate payable and check that the rate is not due to an increase in CPI or the income and assets thresholds.

Take note of the appropriate reduction amount details.

Did the rate increase due to CPI or the income and assets threshold?

• Yes, recalculate the reduction amount if affected by an increase in the income and assets thresholds or child deduction thresholds - using the thresholds applicable at the start day. Go to Step 3
• No, go to Step 3

Determine the maximum basic rate of Age Pension payable at the start day (basic and supplement only, not including Pharmaceutical Allowance (PhA)) by checking the Maximum Basic Rate: and Basic Pen Supplement: fields on the PRC screen as at the start day.

This is done by subtracting the reduction amount from the maximum basic rate.

Compare the notional rate calculated in the previous step with the total bonus amount already paid (including the original bonus and any additional top-ups paid). To see if a top-up (one or more) has previously been paid, check the following screens:

• Annual Notional Pension Rate: field on the PBTD screen
• One Off Payments (OOP) screen
• Payment Summary (PS) screen

Is the notional rate calculated in the previous step higher than the total bonus amount already paid?

• Yes, a further top-up is payable, go to Step 6
• No, No further top-up is payable. Record details on a DOC. Procedure ends here

Obtain the number of Pension Bonus Years from the Pension Bonus Payment (PBP) screen.

Are there any days in both the No. of Days Partnered: and No. of Days Unpartnered: fields?

• Yes, there were changes in relationship status during the accrual period, go to Step 7
• No, there were no changes in relationship status:
• calculate the Pension Multiple by multiplying the number of Pension bonus Years by 0.094. Round to three decimal places
• multiply the Annual Notional Rate (Step 14 answer) x Pension Multiple x number of Pension Bonus Years and round the result to the nearest 10 cents. See the Resources page for an example
• go to Step 8

As there were changes in relationship status during the accrual period (or last 5 years if more than 5 years), the period for each relationship status will need to be calculated separately, the Notional Pension Rate determined and calculations for each relationship status made.

Pension Multiple

The Pension Multiple remains the overall qualifying period multiplied by 0.094 round to three decimal places.

Notional Pension Rate

The notional rate will depend upon the marital status at the start day. If single at the start day then the Notional Partnered Pension rate will need to be calculated. If partnered at the start day then the Notional Single rate of pension will need to be calculated.

The Resources page contains examples of calculations.

Subtract all previous Bonus Payments (for example initial bonus and any subsequent top-ups) from Step 16 calculations. Check the OOP screen and PBTD screen.

The Resources page contains an example of this calculation.

• select the MFU
• go to the OOP screen and code as required:
• Effect date: field, enter date of effect, usually the date of processing
• Payment Type: field, enter PBT
• Source: field enter INT
• Date of Receipt: field enter Date of action
• Navigate to AR, enter 'O' on the PBT/OOP line and navigate to the OOP screen
• Amount $: field, enter manual calculation amount
• navigate to the AR screen which will now display the PBT/OOP line with the manually entered amount
• complete Source: and Date: fields
• finalise activity and record details on a DOC