Using the correct date of effect when raising debts 107-03010010

Arrears may arise when:

• the customer has notified a change of circumstances and their rate is adjusted using the date the customer notified as the date of receipt (DOR) on the update transaction
• there is a customer-initiated review

Do not:

• raise arrears as a result of a department initiated review, unless the original decision that caused the underpayment was incorrect
• remake favourable determinations if the customer did not provide the correct information at the time of the decision

The NSS, PEN and PGA payment systems each have a limiting date if a customer record for that system exists. When a reassessment has a date of event/effect prior to a limiting date the payment system will:

• not calculate an adjustment (either arrears or debt) on that record for any period before the limiting date (BLD)
• add a BLD line to the Assessment Results (AR) screen that shows:
• the code BLD under the heading Sts-Rsn for the service reason being reassessed
• dates under the heading of Adj From and Adj To for the period the system is unable to calculate an adjustment. These dates will be prior to the most recent date on the Limiting Date (LMTD) screen

The system is unreliable in reassessing entitlements before limiting dates. The separation of a couple or a new payment type being granted may prompt a limiting date.

Use debt calculation tools to calculate the debt.

If debt relates to Income Compliance Remediation, go to Item 3.

Where a remediation action DOC is coded on the Documents List (DL) screen, it is has been previously identified that the customer may be in scope for remediation due to the removal of averaged ATO income information.

Where a Host System, Bulk or REM limiting date exists on the LMTD screen, manual action may be required when updating the customer's record.

Has a remediation DOC or limiting date been identified?

• Yes, investigation and manual remediation may be required. See Income compliance remediation initial assessment
• No:
• If the debt is impacted by income averaged ATO information, see Income compliance remediation initial assessment
• If the debt is not impacted by income averaged ATO information, go to Item 4

The date of effect rule for non-stimulus based payments depends on:

• whether a decision is:
• favourable, and results in a rate increase or resumption after cancellation/suspension, or
• unfavourable, and results in a rate reduction or cancellation/suspension
• whether the determination is:
• automatic, or
• non-automatic

The DOE will then depend on:

• the date of event (DOV) of the change
• the date of receipt (DOR) of the change, and
• the date the change was actioned

A notification reporter may incorrectly have a debt raised with the automatic reason code IEA from 6 December 2020. See the Resources page for an example.

Note: for ABSTUDY customers (statement and notification reporters), see Reporting requirements for students and Australian Apprentices.

For more information, see:

• Determining the Date of Event for employment income for debts being raised due to employment income
• Reporting overview

Statement reporters must notify all changes that occur in a specific period. In general:

• the DOE will be the Date of Event (DOV) except for when employment income is recorded as 'IOP'
• when employment income is recorded as 'IOP', the income is assessed over the whole entitlement period this means
  that the date of effect will be the Entitlement Period Start Day (EPSD)

Working Credit and Income Bank can modify the DOE, subject to a customer's circumstance.

For more information, see:

• Determining the Date of Event for employment income for debts being raised due to employment income
• Reporting statements for job seekers

Apply these principles when making a decision:

• identify the issues
• find the rules
• investigate facts and gather supporting evidence
• decide by applying the law to the facts
• document the decision, and
• advise the customer

Record significant decisions directly affecting a customer's entitlement on a DOC. Include:

• the decision itself
• the Act/Guide reference upon which it is based, and
• the reason for making the decision

See Online Document Recording (ODR).

MultiCal excludes entitlement periods showing:

• arrears before the first period overpaid, and
• after the last period overpaid

The Notification Handler (NOHL) rules will usually exclude arrears from the debt explanation (ADEX). Add any arrears ADEX shows that are not legally payable at the start or end of the calculation back to the debt.

The Period Rate Component (RAC) screen cannot be changed for periods between 2009 and 2013 for negative adjustments in the PGA, PEN or NSS systems unless:

• the action is mandatory, including Before Limiting Date (BLD) lines and Compensation (CMM) adjustments
• the activity is a cancellation of benefit and the cancellation reason is:
• Customer on Precluding Payment (CPP), or
• Benefit Transfer (BTR)

Gather the start and end dates of debts from the system or MultiCal. The Modify/Assess Debt (OPMA) screen:

• populates automatically when the debt was created by a reassessment, or
• is coded after finalising the assessment

Where MultiCal does not accurately replicate system calculations, use the:

• Entitlement Period Start Day (EPSD) of the first period overpaid
• Entitlement Period End Day (EPED) of the last period overpaid

MultiCal provides the range of the debt calculation on the debt summary sheet. This is broken into financial years.

See Using the MultiCal debt calculator.

A generic NOHL operates across all payment systems. The NOHL:

• applies the date of event (DOV) rules for a statement reporter or notification reporter
• evaluates:
• when an event occurred
• when an event was reported
• when the event was actioned, and
• whether an assessment is a review of decision

The Review of Assessment (ROA) screen provides information to the NOHL to enable it to apply the correct DOE to favourable or unfavourable determinations of entitlement for most changes in circumstance.

NOHL:

• offsets underpayments against overpayments within the debt period
• calculates a debt if overpayments exceed underpayments
• sets the debt to zero for a net underpayment
• will not pay arrears unless the customer would be normally entitled to those arrears (for example, separately to the debt calculation)
• offsets any arrears that are payable against any calculated debt amount, and pays the balance to the customer
• calculates the DOE where the correct DOV and DOR are used

When calculating a debt, NOHL:

• cannot apply a DOE before a limiting date
• may not include payments issued through a Payment Adjustment (PYAJ) screen

Once the debt shell has been created, any further updates made for the same period will not alter the amount in the potential debt. However, other actions that are offset against potential debts such as restoration may affect the debt shell amount. To identify any additional amounts, select Related activities on the ADEX screen.

For more information, see Notification Handler (NOHL).

The References page contains a link to detailed summary tables of the DOE rules for:

• favourable and adverse determinations
• determinations involving Working Credit/Income Bank customers, and
• determinations not involving Working Credit/Income Bank

Determine the debt period:

• start date using the date of effect (DOE) provisions contained in the legislation that applies to that payment
• end date as the last day the customer was overpaid

An underpayment means that a customer would have been entitled to receive a higher rate for a period, if they had notified correctly.

Do not use underpayments occurring outside of the debt to offset the debt amount unless the arrears are legally payable. Apply favourable determinations for an event that is not correctly notified from the date of receipt (DOR) not the date of event (DOV).

See Payment of arrears after reassessment and stopping a payment.

Underpayments that fall within the debt period form part of the debt calculation, and are used to offset the debt amount.

For further information on the correct debt start and end dates to use when applying legally payable arrears outside the debt period to offset a debt, see Step 8 in Actioning an undetermined debt in DMIS table, in Actioning an undetermined debt on the Debt Management and Information System (DMIS).

Family Tax Benefit (FTB) and Child Care Subsidy (CCS) customers must notify of any changes that reduce entitlement or affect eligibility as soon as possible.

The date of effect (DOE) is the date of the change for rate reductions that are not income related.

The family assistance and CCS reconciliation process determines income related debts.

Raise any FTB or CCS qualification debt that does not require verification of income immediately. Do not wait for the reconciliation process.

For more information, see Family Tax Benefit (FTB) dates of effect and Child Care Subsidy (CCS) debts.

ABSTUDY payees must advise any changes that would affect their entitlement or eligibility within 14 days.

ABSTUDY Student or Australian Apprentice's eligibility and/or entitlements are reassessed from the date of the change in circumstance, not the date of notification.

For further information, see Late payment charge and interest under Student Assistance Act 1973.

Average income across the entitlement period for customers who attract Student Income Bank. This includes:

• Austudy
• Youth Allowance (YA) students and apprentices
• ABSTUDY

Assess rate changes from the Entitlement Period Start Day (EPSD). Apply rate reductions from the start of entitlement period in which the Student Income Bank balance reduces to nil.

Where the Working Credit customer has lost qualification for payment due to employment, qualification extends to the day the participant's Working Credit balance/income bank is reduced to nil. Student access to the income bank finishes from the end of the fortnight in which the customer's course ends. This does not apply to ABSTUDY, where access to the income bank ceases when the student becomes ineligible for Living Allowance.

Note: Student Income Bank was implemented from 1 January 2000.

See Personal Income Test and Income Bank for ABSTUDY, Austudy and Youth Allowance (YA) students and Australian Apprentices.

Apportion income, including the application of the Work Bonus, over the whole entitlement period for pensioners of Age Pension age. Assess rate changes from the Entitlement Period Start Day (EPSD).

Customers paid under the transitional rules are not entitled to the Work Bonus. The Work Bonus is used in the comparison calculations and partners still benefit by the reduction in total income. From 20 September 2009 a pension customer of Age Pension age may be a statement or notification reporter. Customers with variable incomes are statement reporters.

See Work Bonus and balance for pensioners of Age Pension age.

Average employment income for customers eligible for Working Credit over the whole entitlement period. Assess rate changes from the EPSD, Working Credit depletion defers the DOE of the rate reduction to the day the Working Credit is reduced to nil. A further rate reduction usually occurs on the first day the Working Credit starts at nil.

For further information, see Working Credit.