Comparable Foreign Payment (CFP) lump sum arrears debts 107-04040000

Information is received indicating a customer is entitled to arrears of a CFP. The grant of an ongoing foreign pension or revision of an existing foreign pension must be coded from correct date before considering an arrears debt.

Note: When the start date of the ongoing pension is too far in the future to code, the arrears must be coded first on the Foreign Pension Details (FPD) screen.

Has the ongoing rate of foreign pension been coded or is the date of effect of the ongoing rate too far in the future?

• Yes, if appropriate, check a review date is set for coding of a future date. Go to Step 2
• No, see Foreign Pension coding. Procedure ends here

If the person who is entitled to the CFP is deceased at the time the overpayment is calculated, no arrears debt exists for either a person or their partner.

Is the person who is entitled to the CFP now deceased?

• Yes, no debt exists for either the person or their partner. Record all details in a DOC. For arrears from:
• New Zealand, record and send a liaison indicating the death. See Table 2 in New Zealand embargoes. Procedure ends here
• another agreement country, record and send a liaison indicating the death. Procedure ends here
• any other country, procedure ends here
• No, go to Step 3

Access to tools to help in converting Australian dollar amounts and coding arrears periods is available for staff in CIS through the International Services homepage. See the Resources page for a link.

New Zealand Agreement

Coding of foreign pensions may also require the coding of an Assumed Rate of NZ pension in the activity if the customer meets all the following:

• a Special Category Visa holder who is not 'protected'
• they or their partner are current on an Australian payment, and
• they already receive a NZ pension

Information needed:

If there is insufficient information to apply any of the following, clarify details with the customer. Information may be accepted over the phone but delegates must be satisfied the information being used is accurate and clearly documented.

Note: if needed, any missing changes in the periodic rates of a foreign pension for the arrears periods (for example, for indexation), may be derived from the CFP Rate Calculator.

Arrears period

In all cases, the arrears period must be obtained:

• Arrears Period Start Date (APSD). Foreign survivor payments are only assessed from the Bereavement Period End Date (BPED). In these cases, the APSD is adjusted to the BPED + 1
• Arrears Period End Date (APED). If the APED is unknown it can be assumed to be the end of the calendar month before the date of issue of the notice of grant (NOG)

Arrears amount or foreign pension rates

If available, the arrears period and lump sum amount in the source currency may be coded. However, there are situations where arrears amounts may not be used, for example, where:

• the country only provides rate information and not an arrears amount
• the arrears amount provided is not the gross amount, for example, tax has been deducted or amount reduced for debt recovery
• the arrears amount includes components that are exempt from the income test for that country
• there are significant variations in the rates of the foreign pension, or
• policy adjusts the arrears period being assessed, for example, foreign survivor payments

If the arrears amount cannot be used, the rates during the arrears period must be converted to Australian dollars and coded like an ongoing foreign pension for the arrears period.

Exchange rate

To make sure the debt reflects the value of foreign pension arrears the customer receives, policy is to use the exchange rate that was applicable at the date the arrears amount was received for the period of the arrears.

When coding an arrears amount, system processing will automatically use the exchange rate applicable as at the Date of Event (DOV) coded. Otherwise, rates during the arrears period must be manually converted according to the applicable exchange rate and coded in Australian dollars.

Exchange rates are available on the Foreign Exchange Summary (RDFXS) screen.

If the date of receipt of the arrears is unknown it can be deemed to be:

• the month of issue of the notice of grant (NOG), or
• the following month if the notice is issued within 5 days of the end of the month and it is in the customer's favour, or
• the end of the arrears period +1 for future grants, for example, Germany

Can the arrears amount be used?

• Yes, go to Step 4
• No, go to Step 5

Note: if the customer receives a payment in the Newstart System (NSS), for example JobSeeker, go to Step 5.

Process Direct

• Go to the Foreign Income (FIPS) screen
• On the Foreign Pension Details (FPD) table, select Add New Row
• On Create Foreign Pensions Details, update:
• Country of Payment: Same as for main pension
• Currency: Same as for main pension
• Type: Same as main payment
• Description: ARREARS LUMP SUM
• Event Date: The date of receipt of the arrears lump sum
• Arrears From: Arrears Period Start Date (APSD)
• Arrears To: Arrears Period End Date (APED). In the first field (for example, Basic Rate, NZ Actual), key the Arrears lump sum amount in source currency
• Select Save
• Enter Receipt Date and Channel
• Go to Step 9

Customer First/Customer Record

Go to the FPD screen. In the following fields:

• Country of Payment and Type as for the main pension
• Description 1: key Arrears Lump Sum
• Currency: key the source currency of the lump sum
• Date of Event: key the date of receipt of the arrears lump sum
• Arrears From: key the Arrears Period Start Date (APSD)
• Arrears To: key the Arrears Period End Date (APED). In the first field (for example, Basic Rate, NZ Actual), key the Arrears lump sum amount in source currency
• Source and DOR: key as applicable
• Press [Enter]
• Go to Step 9

Are the arrears because of a new grant of a foreign pension?

• Yes, go to Step 6
• No, for rate revisions go to Step 7

Process Direct:

• Go to the Foreign Income/Pensions Summary (FIPS) screen.
• On the Foreign Pension Details (FPD) table
• Expand: select at relevant row
• Select Add New Row
• On Create Foreign Pensions Details update:
• Event Date: key the Arrears Period Start Date (APSD) or Bereavement Period End Date (BPED) + 1 as appropriate
• Currency: select AUD Note: where the determined exchange rate to be used is within 5% of the existing rate, use UK currency (GBP)
• Exchange Rate: key the determined exchange rate (from Step 3)
• Frequency: select relevant option, according to ongoing foreign pension
• Basic Amount: as provided on notice of grant/customer advice/ liaison
• Social/Welfare Amt: as provided on notice of grant/customer advice/ liaison
• Enter Receipt Date and Channel
• Select Save
• Select Assess and address any errors/warnings. Note: ignore the warning about the incorrect currency/exchange rates
• Return to the relevant foreign pension record off the FPD table again and code all rate variations during the arrears period
• If there is a gap between the end of the arrears period and the date of effect of the original NOG coding, code:
• Event Date - Arrears Period End Date (APED) + 1
• Enter '0' in the relevant income field (for example. Basic Rate, Soc/Welfare Amount)
• Go to Step 9

Customer First/Customer Record:

• Go to the Foreign Income/Pensions Summary (FIPS) screen.
• 'S'elect the relevant foreign pension record to navigate to the Foreign Pension Detail (FPD) screen. In the following fields:
• Event Date, key the Arrears Period Start Date (APSD) or Bereavement Period End Date (BPED) + 1 as appropriate
• Currency, key as 'AUD'. Note: where the determined exchange rate to be used is within 5% of the existing rate, use UK currency (GBP)
• Exchange Rate, key the determined exchange rate (from Step 3)
• relevant income fields (for example, Basic Amount, Social/Welfare Amt), key the rate of foreign pension
• Frequency: according to ongoing foreign pension
• Source and DOR, key as applicable
• press [Enter]. Note: ignore the warning about the incorrect currency/exchange rates
• On the FIPS screen, 'S'elect the relevant foreign pension record
• code all rate variations during the arrears period. If there is a gap between the end of the arrears period and the date of effect of the original NOG coding, in the:
• Event Date, key the Arrears Period End Date (APED) + 1
• relevant income fields (for example. Basic Rate, Soc/Welfare Amount), key '0'

Go to Step 9.

Due to system limitations, only the difference between the existing rate and the new rate is coded separately. Care must be taken to make sure any concessional treatment of foreign pensions is applied manually before coding, see International Social Security Agreements.

Determine:

• rates of foreign pension for the arrears period, taking into account any concessional treatment
• difference between the existing rate of foreign pension and the new rates for the period of the arrears

Note: if the period of arrears for the rate revision applies for a period where no rate was applicable due to previous date of effect and arrears debt calculations, policy is to assume that the rate of foreign pension continued to apply for that period.

Process Direct:

• Go to the Foreign Income (FIPS) screen
• On the Foreign Income/Asset Detail (FID) table, select Add New Row
• On Create Foreign Financials update:
• Country of Payment
• Currency: AUD- Australian Dollar (Note: if the determined exchange rate to be used is within 5% of the existing rate, use UK currency (GBP))
• Exchange Rate: Key the determined exchange rate (from Step 3)
• Type - OIN - Other Income
• Frequency: Select relevant option
• Reference/Description: 'XX YYY Rate Revision Arrears' where XX is the relevant 2-digit country code and YYY is the foreign payment type
• Start Date: dd/mm/yyyy
• End Date: dd/mm/yyyy
• Key any other relevant fields
• Select Save
• Enter Receipt Date and Channel
• Select Save
• Select Assess and address any errors/warnings. Note: ignore the warning about the incorrect currency/exchange rates
• Return to the relevant Foreign Income/Assets off the FID table again and code all rate variations during the arrears period
• Select the relevant Foreign Income/Assets off the FID table again and code:
• Event Date - arrears period end date + 1
• Income Amt - '0'

Customer First/Customer Record:

• Go to the Foreign Income Details (FID) screen, then code ad follows
• Country of Payment
• Type: key ‘OIN'
• Reference/Description: key 'XX YYY Rate Revision Arrears' (where XX is the relevant 2 digit country code and YYY is the foreign payment type)
• Event Date: key the arrears period start date
• Currency: key 'AU'. Note: if the determined exchange rate to be used is within 5% of the existing rate, use UK currency (GBP)
• Exchange Rate: key the determined exchange rate (from Step 3)
• Income Amt: key the difference between the existing rate of foreign pension and the new rates
• Source and DOR, key as applicable
• Press [Enter]. Ignore the warning about the incorrect currency/exchange rates.
• Update the FIPS screen:
• 'S'elect the relevant record
• code all rate variations during the arrears period
• 'S'elect the relevant record again and in the following fields:
• Event Date: key the arrears period end date + 1
• Income Amt: key '0'
• Go to Step 9.

Note: foreign pension arrears that are identified as being received before 1 July 2004 are treated differently. Arrears debts prior to this date can only be raised under an international social security agreement if the foreign pension was covered by an agreement in force at the time and only for the customer.

Negative adjustments of:

• less than $50.00 are automatically waived. However, adjustments before a limiting date must be manually calculated
• more than $50.00 should be reviewed to make sure there are no unanticipated adjustments during or outside the debt period

Process Direct

• Finalise the transaction by selecting Assess again
• The Entitlements (ELD) screen will display

Is there a recoverable debt of more than $50.00?

• Yes, go to the Assessment Consequences (ASC) screen and make sure the Debt Action field is coded as 'Investigation Required' before finalising the transaction. Go to Step 9
• No, finalise the activity. Select Finish. Record details of the update on Finalise. If the CFP was from:
• New Zealand, see Table 2 in New Zealand embargoes. Procedure ends here
• any other country, record all the details on a Note/DOC. Procedure ends here

Customer First / Customer Record

Go to the AR screen and check any negative adjustments.

Is there a recoverable debt of more than $50.00?

• Yes, the Dbt Act field on the Assessment Consequences (ASC) screen must be coded as 'INV' before finalising the activity. Go to Step 10
• No, finalise the activity. If the CFP was from:
• New Zealand, see Table 2 in New Zealand embargoes. Procedure ends here
• any other country, record all details in a DOC. Procedure ends here

Arrears debts for customers and partners from any country besides New Zealand are raised and recovered according to general debt procedures. Arrears debts because of the grant of a New Zealand may be recovered by embargo.

Is the arrears debt due to the coding of arrears of NZ pension from the grant of a NZ new claim and not a failed embargo?

• Yes, see New Zealand embargoes
• No, raise the debt(s) for the customer (and partner, if applicable) using the Debt Action script per normal debt raising procedures. Key the reason for the debt as 'CFP'