Adding or updating a defined benefit or military invalidity pension income stream 108-05060060

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

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

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

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

The schedule can be:

• the one page Defined Benefit Income Stream Schedule, see the Resources page
• a provider issued schedule with the same information as the Details of Income Stream Product (SA330)

The customer may not know if their income stream has a tax free component (deductible amount). The income stream schedule issued by the provider will contain this information. Other documents, (for example, letters), may not have the tax free component and cannot be accepted.

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 assets updates the customer would like to make during their contact (for example income stream, 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.

Note: if the customer advises of a reduced assessment of Special Rate Disability Pension (SRDP) due to their Commonwealth Super income stream, e.g. Defence Force Retirement and Death Benefits (DFRDB) Scheme and the Military Superannuation and Benefits (MSB) Scheme, they need to provide supporting documents from DVA as to the calculation of the reduction amount. The Commonwealth Super used to reduce the SRDP is exempt income for the Income Support assessment.

Has the customer provided the income stream schedule and all income and asset changes?

• 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).

• Use Mail Forms to issue the Defined Benefit Income Stream Schedule, or tell the customer verbally to ask their provider for an income stream schedule
• 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 request the information directly from the provider.

Procedure ends here until documents returned.

If the customer or their partner is advising:

• commutation of the income stream, see Commutation of asset test exempt (ATE) income streams
• changes to the gross income from an existing income stream, go to Step 5
• a Successor Fund Transfer (SFT), where all fund members move to another fund, the income stream will have a new provider and/or a new product reference number. Refer to the FINS Bulletin for a listing of SFT/IFTs. See Table 2, Step 1
• new income stream details, see Table 3, Step 1
• suspension or restoration of income stream payments, go to Step 9

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?

The product type code should be DEF - DEFINED BENEFIT.

• Yes, go to Step 6
• No, see Table 3, Step 1

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 update in the last 12 months. If the most recent update is not ISP, check all updates in the last 12 months.

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
• 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
• Go to Step 7

Check the Inc Ded Amt Calc Method field. If it is:

• 'I - Calculated under NEW proportional method' the amount of the tax free component will be in the TFC New Method field
• 'S - Applies if the customer meets the criteria for savings provision' the tax free component will always be displayed in the TFC Old Method field and the tax free component under the new method reported on the income stream schedule must be added in the TFC New Method field

If the schedule provides a tax free component that has not previously been recorded, check with the provider before updating.

Select Cancel to close the Superannuation Payment Details.

Use the Income and Assets Task Selector for updating 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 details are correct

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

• Event Date:
• Date of the change
• Cannot be coded with a future date. If a customer advises of a future increase in gross income due to anticipated indexation, create a review to code the change. Include the details of the change in the review
• 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
• Super Child Amount:
• Code the amount of additional income received for children
• The system will subtract this amount from the gross income amount when determining the assessable income for the customer
• TFC New Method:
• Code the tax free component calculated using the new proportional method as stated on the schedule
• If this field has a value and the Inc Ded Amt Calc Method field is 'I' or 'S' (for more information on values, see Step 7 in Table 3), the amount recorded in this field must also be changed when changing the gross income amount as a result of the indexation
• From 1 January 2016, the deductible amount is capped at 10% of the gross income received from the income stream. If the income stream has a TFC amount greater than 10% of the gross income, the system will cap the deductible amount at 10%. Exception: the 10% cap does not apply to the MSB and DFRDB defined benefit income streams
• Recipients of SRDP may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. E.g. DFRDB and MSB defined benefits. 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. Add the amount of super used to reduce the SRDP (See Resources for calculating the reduction amount from DVA documents) to the TFC and code in the TFC New Method field. Create a Display on Access DOC advising of the reduced assessable income
• Select Save once updates made
• Update Receipt Date and Channel, select Save
• Check the payment outcome on Entitlements (ELD) and select Finish
• If the Service Officer has used the Process Direct Income and Assets workflow, 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 NOTES replicate to the Document List (DL).

Procedure ends here.

Has the customer and/or their partner contacted to advise of suspension or restoration of payments from a defined benefit or 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 5

In the income stream owner's record:

• go to the Income Streams (SUPS) screen
• the product type code will be DEF - DEFINED BENEFIT

Has the customer provided a current one page Defined Benefit Income Stream Schedule, SA330 or similar schedule from the income stream provider?

• Yes, go to Step 3
• No, the customer must provide an income stream schedule, go to Step 2

Customer or partner must provide the one page Defined Benefit Income Stream Schedule, an SA330 or similar schedule from their provider before the provider name and product reference number can be changed.

Request documents.

• Issue SA330 using Mail Forms, or
• Tell the customer verbally what is needed
• Issue the one page Defined Benefit Income Stream Schedule. See Resources for links to the Schedule and SA330. See Requesting information (CLK)
• Record a NOTE detailing what the customer has been asked to provide
• 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 request the information directly from the provider.

Procedure ends here until documents are returned.

For current customers

From the income stream owner's record, 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 to initiate the workflow
• Select Edit against the income stream product to access the Change Income Streams (SUPS/SUPI/SUPV) screen

For New Claims: all updates are done within the new claim activity.

Change the following Income Stream Details fields as needed:

• Provider or SMSF/SAF Name:
• Select the correct option
• If a defined benefit superannuation fund does not appear in the provider/fund name list, contact the Financial Industry and Network Support (FINS) Level 2 Policy Helpdesk via the Online Query Form to request the provider/fund to be added to the list
• The provider name must be correct to enable bulk updates and indexation reviews
• Provider or SMSF/SAF ABN:
• Leave blank
• Product Name:
• Leave blank
• 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
• Ensure 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
• Select Save once updates made
• Update Receipt Date and Channel, select Save

• Check the Income Streams (SUPS, SUPI, SUPV) table displays the updated income stream details
• Select Assess
• Check the payment outcome on Entitlements (ELD) and select Finish
• If the Service Officer has used the Process Direct Income and Assets workflow, 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 NOTES replicate to the Document List (DL).

Procedure ends here.

Schedule needed for a defined benefit or military invalidity pension income stream

Has the customer and/or their partner provided a SA330 or the Defined Benefit Income Stream Schedule or a similar schedule providing details for each income stream?

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

• Use Mail Forms to issue the Defined Benefit Income Stream Schedule, or tell the customer to ask their provider for an income stream schedule. See Requesting information (CLK)
• The customer must provide a schedule for each income stream they own
• Record what has been requested on a NOTE
• Select Information to be supplied within 14 Days + Delivery

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 request the information directly from the provider.

Procedure ends here until documents returned.

Note: until a system release is available, military invalidity pension income streams must be coded as defined benefit 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 'DEF - DEFINED BENEFIT' for a defined benefit or military invalidity pension income stream
• Income stream from SMSF/SAF?
• Select No
• Provider or SMSF/SAF Name:
• Select the provider name
• If a defined benefit superannuation fund or military invalidity pension does not appear in the provider/fund name list, contact the Financial Industry and Network Support (FINS) Level 2 Policy Helpdesk via the Online Query Form to request the provider/fund to be added to the list
• The provider name must be correct to enable bulk updates and indexation reviews
• Only Military Superannuation and Benefit Scheme (MSB) or DFRDB (DFB) are valid providers for military invalidity pensions
• Provider or SMSF/SAF ABN:
• The ABN will auto populate based on the Provider or SMSF/SAF name
• Product Name:
• Leave blank
• 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 attached guide document
• Event Date/Commencement Date:
• Code the start date
• If a defined benefit income stream is acquired by a reversionary partner, code the start date of the original income stream that is, when the primary partner started the income stream
• Purchase date:
• Leave blank
• 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 Ind:
• Select 'Yes'
• Defined benefit and military invalidity pension income streams are 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
• If the product is cancelled, it stops being assessed under income and assets test
  If the product is being cancelled, use Edit to access the Change Income Stream (SUPS/SUPI/SUPV) options and code the cancellation reason. This will generate an automatic '0' date of event on the Income Stream Details item line. Edit this line to adjust the Event Date field to the correct date of event (DOV)

Go to Step 4.

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 (deceased spouse or partner), which is the date the customer (reversionary) is entitled to the income stream payment
• 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
• 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 result 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 Resources page for a link
• All of the conditions included 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 a 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

The Event Date will be the:

• date the income stream started where the:
• customer has a partner who is current on an income support payment, Residential Care Assessment (RCA) or Low Income Health Care Card (LIC) before the start date, or
• income stream started after the date of grant of the payment
• income stream was purchased after the lodgement of an early claim
• lodgement date for an early claim
• the start date of the 8 week assessment period for LIC
• payment grant date in all other cases

Start of new income stream by existing customer

Invalidity or TPD pension

• If lump sum arrears were paid, go to Step 5
• If no lump sum arrears were paid, the Event Date will be the start date of the ongoing payments

Non-invalidity or TPD pension

• If lump sum arrears were paid, the Event Date is the first date included in the arrears
• If no lump sum arrears were paid, the Event Date is the start date of the ongoing payments

Go to Step 6.

Did the customer have notification obligations during the period of the arrears?

• Yes, the Event Date will be the date of the notification obligation, e.g. upon notice of approval from the superannuation fund the person's Invalidity or TPD pension was approved. It is not the date they applied for this pension
• No, the Event Date will be the start date of the ongoing payments.

Note: the lump sum payments for the period prior to the Event Date will be assessed as ordinary income from the date of receipt, for a number of days equal to the period which the arrears represent, up to a maximum of 52 weeks. For example, if the lump sum arrears period is 4 months, the lump sum amount is treated as income over the following 4 months from the date the amount was received. See Income from personal injury insurance schemes and disability benefits for coding instructions.

Go to Step 6.

• Channel Type: After saving the update 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
• Gross Income Amount:
• Code the fortnightly gross income amount
• It must include any additional amount a customer or their partner receives for their child
• Income Frequency:
• Select 2WE - fortnightly
• 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
• Super Child Amount:
• Code the amount of 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
• Super Child Number:
• Code the total number of children for whom additional payments are received

Undeducted Purchase Price field

Use this field to record the undeducted purchase price (UPP) of the income stream product. This field is needed in the following 2 situations:

• The provider has answered YES to 'Is the Tax Free Component calculated using the old method based on UPP'. This will happen when:
• the start date is before 1 July 2007, and
• the customer is under 60, or the customer is over 60 and the income stream is from SA Super, SA Police or GESB WA
• The income stream started before 1 July 2007 and savings provisions apply

The UPP appears on the schedule. If the amount is not provided, it can be calculated in some cases.

• If the product provider or customer has not provided the UPP amount but has provided the fortnightly tax free component amount calculated using the old method based on UPP, the UPP can be calculated using the following formula:
• UPP = tax free component x 26 x relevant number
• For single customers, the relevant number is the life expectancy of the person at the start date of the product
• For partnered customers, the relevant number is the longest life expectancy of either partner at the start date of the product

Note: the Relevant Number Calculator can be used to determine:

• the UPP from the relevant number on the SUPS screen, and
• the TFC amount

Note: recipients of SRDP may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. For example, DFRDB and MSB defined benefits. The entitlement to SRDP is reduced at 60% by an offset for the Commonwealth superannuation received.

The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes.

Care needs to be taken to determine if the DVA information is displaying the full amount of the Superannuation used or the reduction amount that needs to be adjusted by multiplying it by 10/6), and/or if only a partial amount was required to reduce the SRDP to zero. See Resources for examples to calculate the reduction amount from DVA documents.

• Add the amount of super used to reduce the SRDP to the TFC amount and code in the TFC New Method field
• Create a Display on Access (DOA) DOC advising of the reduced assessable income

In the Inc Ded Amt Calc Method field, code the method that will apply for the calculation of the tax free component as follows:

O - Calculated under the OLD method based on undeducted purchase price

• Use the code O when:
• the start date is before 1 July 2007, and
• the provider has indicated on the income stream schedule the tax free component is calculated using the old method based on UPP, and
• the customer is under 60, or the customer is over 60 and the income stream is from SA Super, SA Police or GESB WA
• The tax free component is calculated under the pre-1 July 2007 rules using the old method based on the undeducted purchase price (UPP)
• If this code is used the TFC New Method field should be blank or zero

S - Applies if the customer meets the criteria for the savings provision

• This will only apply if the customer meets the criteria for the savings provision
• Code the tax free component supplied by the income stream provider in the TFC New Method field. Use this code when all of the following apply:
• the Inc Ded Amt Calc Method has defaulted to 'O'
• the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method
• the fortnightly deductible amount on the customer's record calculated using the UPP is greater than the tax free component reported on the schedule
• The tax free component calculated is under the old method using the undeducted purchase price (UPP)

I - Calculated under NEW proportional method, changes with indexation

• Code the tax free component supplied by the income stream provider in the TFC New Method field. Use this code when:
• the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method, and
• the Provider Name is not 'CSS' (Commonwealth Superannuation Scheme)
• The tax free component is calculated using the new proportional method and will change when the gross income amount changes as a result of indexation
• If this code is used, do not code the UPP in the Undeducted Purchase Price field

F - Calculated under NEW proportional method, applies to Provider CSS

• Code the tax free component supplied by the income stream provider in the TFC New Method field
• Use this code when the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method, and
• the Provider Name is 'CSS' (Commonwealth Super Scheme)
• The deductible amount is calculated using the new proportional method and will not vary with the changes in the gross income amount
• It will remain the same permanently
• If this code is used, do not code the UPP in the Undeducted Purchase Price field

Z - Tax Free Component (Deductible amount) is Zero

• Use this code when the provider has indicated on the income stream schedule that there is no tax free component. The tax free component or deductible amount is zero
• When a new product is coded on the system, this field will default to 'Z' and must be changed if there is a tax free component reported on the schedule
• If this code is used, the Undeducted Purchase Price field and the TFC New Method field should be blank or zero

• TFC New Method field- code the tax free component calculated by the income stream provider using the new proportional method. This amount will be reported on the income stream schedule
• Code this field if the Inc Ded Amt Calc Method is an 'I', 'F', or 'S'
• Update this field if the gross income amount is changed as a result of indexation and the Inc Ded Amt Calc Method field is 'I' or 'S'
• TFC Old Method field – displays the tax free component under the old method. The amount in this field will display when the Undeducted Purchase Price field has a value recorded
• Deductible Amt (Income) field - the system calculates and displays the capped deductible amount (if the actual deductible amount is greater than 10% of the gross income amount) or the actual deductible amount (if 10% or less of the gross income amount). This amount is reduced from the gross income amount to determine assessable income
• Assessable Income Amount field - system calculated: gross income amount - deductible amount = assessable income
• Assessable Asset Amount field - will be blank as no asset value assessed
• Product Category field - automatically displays the category of the income stream for assessment purposes. System displays either:
• 4 - Assets Test Exempt Defined Benefit Income Stream
• 5 - Assets Tested Defined Benefit Income Stream. Note: although this category displays as assets tested, the income stream is 100% asset-test exempt due to the indefinite Ministerial exemption
• Select Save once updates made
• Update Receipt Date and Channel and select Save

• Check the Income Streams (SUPS, SUPI, SUPV) table displays the updated income stream details
• Select Assess
• Check the payment outcome on Entitlements (ELD) screen and select Finish
• If the Service Officer has used the Process Direct Income and Assets workflow, 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 NOTES replicate to the Document List (DL).

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

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

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

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

The schedule can be:

• the one page Defined Benefit Income Stream Schedule, see the Resources page
• a provider issued schedule with the same information as the Details of Income Stream Product (SA330)

The customer may not know if their income stream has a tax free component (deductible amount). The income stream schedule issued by the provider will contain this information. Other documents, (for example, letters), may not have the tax free component and cannot be accepted.

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 assets updates the customer would like to make during their contact (for example income stream, 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.

Note: if the customer advises of a reduced assessment of Special Rate Disability Pension (SRDP) due to their Commonwealth Super, e.g. Defence Force Retirement and Death Benefits (DFRDB) Scheme and the Military Superannuation and Benefits (MSB) Scheme, they need to provide supporting documents from DVA as to the calculation of the reduction amount. The Commonwealth Super used to reduce the SRDP is exempt income for the Income Support assessment.

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

• 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.

• Use Mail Forms to issue a Defined Benefit Income Stream Schedule, or tell the customer verbally to ask their provider for an income stream schedule. 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 request the information directly from the provider.

Procedure ends here until documents returned.

If the customer or their partner is advising:

• commutation of the income stream, see Commutation of asset test exempt (ATE) income streams
• changes to the gross income from an existing income stream, go to Step 5
• a Successor Fund Transfer (SFT), where all fund members move to another fund, the income stream will have a new provider and/or a new product reference number. Refer to the FINS Bulletin for a listing of SFT/IFTs. See Table 2, Step 1
• new income stream details, see Table 3, Step 1
• suspension or restoration of income stream payments, go to Step 9

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 DEF.

• Yes, go to Step 6
• No, see Table 3, Step 1

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

If the income stream can be updated automatically, the channel type (Chnl Type) field on the SUPV screen will be income stream provider (ISP) for any update in the last 12 months. If the most recent update is not ISP, check all updates in the last 12 months.

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
• 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
• Go to Step 7

Check the Inc Ded Amt Calc Method field on the SUPV screen. If it is:

• 'I' the amount of the tax free component will be in the TFC New Method field
• 'S' the tax free component will always be displayed in the TFC Old Method field and the tax free component under the new method reported on the income stream schedule must be added in the TFC New Method field

If the schedule provides a tax free component that has not previously been recorded, check with the provider before updating.

Select Continue to return to the SUPS screen.

Use the Income Stream Update guided procedure for updating the income stream unless processing a new claim. Those updates are completed inside the new claim activity.

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 (SUPV) screen:

• Event Date field
• Date of the change
• Cannot be coded with a future date. If a customer advises of a future increase in gross income due to anticipated indexation, create a review to code the change. Include the details of the change in the review
• Gross Income field
• 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
• Super Child Amount field
• Code the amount of additional income received for children
• The system will subtract this amount from the gross income amount when determining the assessable income for the customer
• TFC New Method field
• Code the tax free component calculated using the new proportional method as stated on the schedule
• If this field has a value and the Inc Ded Amt Calc Method field is 'I' or 'S' (for more information on values, see Step 7 in Table 3), the amount recorded in this field must also be changed when changing the gross income amount as a result of the indexation
• From 1 January 2016, the deductible amount is capped at 10% of the gross income received from the income stream. If the income stream has a TFC amount greater than 10% of the gross income, the system will cap the deductible amount at 10%. Exception: the 10% cap does not apply to the MSB and DFRDB defined benefit income streams
• Recipients of SRDP may have a reduction to their SRDP entitlement due to their Commonwealth superannuation. E.g. DFRDB and MSB defined benefits. The SRDP is reduced at 60% by an offset for the Commonwealth superannuation. The amount of Commonwealth superannuation used to reduce the SRDP is exempt as income for Social Security purposes. Add the amount of super used to reduce the SRDP (See Resources for calculating the reduction amount from DVA documents) to the TFC and code in the TFC New Method field. Create a Display on Access DOC advising of the reduced assessable income
• Source, DOR, and Action fields
• Select Continue to return to the SUPS screen

Check the SUPS screen displays the updated income stream details.

• Complete the activity on the Assessment Results (AR) screen
• Record details on a DOC

Procedure ends here.

Has the customer and/or their partner contacted to advise of suspension or restoration of payments from a defined benefit or 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 5

In the income stream owner's record:

• go to the Pension/Annuities Summary (SUPS) screen
• the product type code will be DEF

Has the customer provided a current one page Defined Benefit Income Stream Schedule, SA330 or similar schedule from the income stream provider?

• Yes, go to Step 3
• No, the customer must provide an income stream schedule, go to Step 2

Customer or partner must provide the one page Defined Benefit Income Stream Schedule, an SA330 or similar schedule from their provider before the provider name and product reference number can be changed.

Request documents.

• Issue SA330 using Mail Forms, or
• tell the customer verbally what is needed
• issue the one page Defined Benefit Income Stream Schedule. See Resources for links to the Schedule and SA330. See Requesting information (CLK)
• Record a DOC detailing what the customer has been requested to provide
• 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 request the information directly from the provider.

Procedure ends here until documents are returned.

• 'S'elect the income stream product from the SUPS screen
• Select Continue to open the Pension/Annuities Identification (SUPI) screen

Change the following fields as needed:

• Provider or SMSF/SAF Name field
• Use field help (?) to see the list of defined benefit provider names with their 3 letter codes
• Code the three letter code for the name of the income stream provider
• The system will auto populate the correct provider name
• If a defined benefit superannuation fund does not appear in the provider/fund name list, contact the Financial Industry and Network Support (FINS) Level 2 Policy Helpdesk via the Online Query Form to request the provider/fund to be added to the list
• The provider name must be correct to enable bulk updates and indexation reviews
• Provider or SMSF/SAF ABN field
• Leave blank
• Product Name field
• Leave blank
• Product Reference Number field
• 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
• Complete the Source and DOR fields
• Action field
• Code 'C' (system will not accept 'I')

• Select Continue
• On the Warning screen, change the N to Y
• Select Continue to open the Pension/Annuities Details Variable (SUPV) screen
• Event Date field - date of change
• Select Continue to return to the SUPS screen
• Check details on the SUPS screen are correct
• Complete the activity on the Assessment Results (AR) screen
• Record details on a DOC

Procedure ends here.

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

Schedule needed for a defined benefit or military invalidity pension income stream

Has the customer and/or their partner provided a SA330 or the Defined Benefit Income Stream Schedule or a similar schedule providing details for each income stream?

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

• Use Mail Forms to issues the Defined Benefit Income Stream Schedule, or tell the customer to ask their provider for an income stream schedule
• The customer must provide a schedule for each income stream they own
• Record what has been requested on a DOC
• Select Information to be supplied within 14 Days + Delivery

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 request the information directly from the provider.

Procedure ends here until documents returned.

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

Use the Income Stream Update guided procedure unless processing a new claim. Those updates are completed inside the new claim activity.

To update manually, go to the Pension/Annuities Identification (SUPI) screen and complete the following fields:

• Product Type Code field
• Code 'DEF' for a defined benefit or military invalidity pension income stream
• Income stream from SMSF/SAF? field
• Code 'N' for no
• Provider or SMSF/SAF Name field
• Code the 3 letter code for the name of the income stream provider. The system will auto populate the correct provider name. Use field help (?) to see the list of defined benefit provider names with their 3 letter codes
• If a defined benefit superannuation fund or military invalidity pension does not appear in the provider/fund name list, contact the Financial Industry and Network Support (FINS) Level 2 Policy Helpdesk via the Online Query Form to request the provider/fund to be added to the list
• The provider name must be correct to enable bulk updates and indexation reviews
• Only Military Superannuation and Benefit Scheme (MSB) or DFRDB (DFB) are valid providers for military invalidity pensions
• Income Stream Provider ABN field
• Leave blank
• Product Name field
• Leave blank
• Product Reference Number field
• 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 attached guide document
• Purchase date field
• Leave blank
• Commencement Date field
• Code the start date
• If a defined benefit income stream is acquired by a reversionary partner, code the start date of the original income stream, that is, when the primary partner started the income stream
• Term or Relevant Number field
• 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 field
• Code 'Y' for yes
• Defined benefit and military invalidity pension income streams are 100% asset-test exempt (ATE) regardless of start date
• Start Date Original Commuted Product field
• Leave blank
• Product Cancellation Reason field
• Leave blank when adding a new income stream
• If the product is cancelled, it stops being assessed under income and assets test
  If the product is being cancelled, use 'C'orrect in the Action field and code the cancellation reason
  The Pension/Annuities Details Variable (SUPV) screen will display so the Event Date field can be coded

Complete the Source, DOR, and Action fields.

Select Continue to go to the Pension/Annuities Details Variable (SUPV) screen.

Go to Step 4.

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 (deceased spouse or partner), which is the date the customer (reversionary) is entitled to the income stream payment
• 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
• 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 result 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 Resources page for a link
• All of the conditions included 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 prior to a CPI date that has passed, historical schedules will need to be requested. See Requesting information (CLK)

New claim

The Event Date will be the:

• date the income stream started where the:
• customer has a partner who is current on an income support payment, Residential Care Assessment (RCA) or Low Income Health Care Card (LIC) before the start date, or
• income stream started after the date of grant of the payment
• income stream was purchased after the lodgement of an early claim
• lodgement date for an early claim
• the start date of the 8 week assessment period for LIC
• payment grant date in all other cases

Start of new income stream by existing customer

Invalidity or TPD pension

• If lump sum arrears were paid, go to Step 5
• If no lump sum arrears were paid, the Event Date is the start date of the ongoing payments
• See Resources page for an example

Non-invalidity or TPD pension

• If lump sum arrears were paid, the Event Date is the first date included in the arrears
• If no lump sum arrears were paid, the Event Date is the start date of the ongoing payments
• See Resources page for an example

Go to Step 6

Did the customer have notification obligations during the period of the arrears?

• Yes, the Event Date will be the date of the notification obligation. E.g., upon notice of approval from the superannuation fund the person's Invalidity or TPD pension was approved. It is not the date they applied for this pension
• No, the Event Date will be the start date of the ongoing payments

Note: the lump sum payments for the period prior to the Event Date will be assessed as ordinary income from the date of receipt, for a number of days equal to the period which the arrears represent, up to a maximum of 52 weeks. For example, if the lump sum arrears period is 4 months, the lump sum amount is treated as income over the following 4 months from the date the amount was received. See Income from personal injury insurance schemes and disability benefits for coding instructions

Go to Step 6.

• Channel Type (Chnl Type) field. 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 field. Automatically displays the category of the income stream for assessment purposes. System displays either:
• 4 - Assets Test Exempt Defined Benefit Income Stream
• 5 - Assets Tested Defined Benefit Income Stream. Note: although this category displays as Assets Tested, the income stream is 100% asset-test exempt due to the indefinite Ministerial exemption
• Gross Income Amount field
• Code the fortnightly gross income amount
• It must include any additional amount a customer or their partner receives for their child
• Income Frequency field
• Code 2WE (fortnightly)
• 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
• Super Child Amount field
• Code the amount of 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
• Super Child Number field
• Code the total number of children for whom additional payments are received

Undeducted Purchase Price field

Use this field to record the undeducted purchase price (UPP) of the income stream product. This field is needed in the following 2 situations:

• The provider has answered YES to 'Is the Tax Free Component calculated using the old method based on UPP'. This will happen when:
• the start date is before 1 July 2007, and
• the customer is under 60, or the customer is over 60 and the income stream is from SA Super, SA Police or GESB WA
• The income stream started before 1 July 2007 and savings provisions apply

The UPP appears on the schedule. If the amount is not provided, it can be calculated in some cases.

• If the product provider or customer has not provided the UPP amount but has provided the fortnightly tax free component amount calculated using the old method based on UPP, the UPP can be calculated using the following formula:
• UPP = tax free component x 26 x relevant number
• For single customers, the relevant number is the life expectancy of the person at the start date of the product
• For partnered customers, the relevant number is the longest life expectancy of either partner at the start date of the product

Note: the Relevant Number Calculator can be used to determine:

• the UPP from the relevant number on the SUPI screen, and
• the TFC amount

Note: recipients of SRDP may have a reduction to their entitlement to SRDP due to their Commonwealth superannuation, for example, DFRDB and MSB defined benefits. The entitlement to SRDP is reduced at 60% by an offset for Commonwealth superannuation received.

The amount of Commonwealth superannuation used to reduce the SRDP entitlement is exempt as income for Social Security purposes.

Care needs to be taken to determine if the DVA information is displaying the full amount of the Superannuation used or the reduction amount that needs to be adjusted by multiplying it by 10/6), and/or if only a partial amount was required to reduce the SRDP to zero. See Resources for examples to calculate the reduction amount from DVA documents.

• Add the amount of Commonwealth superannuation used to reduce the SRDP to the TFC amount and code in the TFC New Method field
• Create a Display on Access (DOA) DOC advising of the reduced assessable income

In the Inc Ded Amt Calc Method field, code the method that will apply for the calculation of the tax free component as follows.

O - Old

• Use the code O when:
• the start date is before 1 July 2007, and
• the provider has indicated on the income stream schedule the tax free component is calculated using the old method based on UPP, and
• the customer is under 60, or the customer is over 60 and the income stream is from SA Super, SA Police or GESB WA
• The tax free component is calculated under the pre-1 July 2007 rules using the old method based on the undeducted purchase price (UPP)
• If this code is used the TFC New Method field should be blank or zero

S - Saved

• This will only apply if the customer meets the criteria for the savings provision
• Code the tax free component supplied by the income stream provider in the TFC New Method field. Use this code when all of the following apply:
• the Inc Ded Amt Calc Method has defaulted to 'O'
• the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method
• the fortnightly deductible amount on the customer's record calculated using the UPP is greater than the tax free component reported on the schedule
• The tax free component calculated is under the old method using the undeducted purchase price (UPP)

I - Indexed

• Code the tax free component supplied by the income stream provider in the TFC New Method field. Use this code when:
• the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method, and
• the Provider Name is not 'CSS' (Commonwealth Superannuation Scheme)
• The tax free component is calculated using the new proportional method and will change when the gross income amount changes as a result of indexation
• If this code is used, do not code the UPP in the Undeducted Purchase Price field

F - Fixed

• Code the tax free component supplied by the income stream provider in the TFC New Method field
• Use this code when the provider has indicated on the income stream schedule the tax free component is calculated using the new proportional method, and
• The Provider Name is 'CSS' (Commonwealth Super Scheme)
• The deductible amount is calculated using the new proportional method and will not vary with the changes in the gross income amount
• It will remain the same permanently
• If this code is used, do not code the UPP in the Undeducted Purchase Price field

Z - Zero

• Use this code when the provider has indicated on the income stream schedule that there is no tax free component. The tax free component or deductible amount is zero
• When a new product is coded on the system, this field will default to 'Z' and must be changed if there is a tax free component reported on the schedule
• If this code is used, the Undeducted Purchase Price field and the TFC New Method field should be blank or zero

• TFC New Method field. Code the tax free component calculated by the income stream provider using the new proportional method. This amount will be reported on the income stream schedule
• Code this field if the Inc Ded Amt Calc Method is an 'I', 'F', or 'S'
• Update this field if the gross income amount is changed as a result of indexation and the Inc Ded Amt Calc Method field is 'I' or 'S'
• TFC Old Method field. Displays the tax free component under the old method. The amount in this field will display when the Undeducted Purchase Price field has a value recorded
• Deductible Amt (Income) field - the system calculates and displays the capped deductible amount (if the actual deductible amount is greater than 10% of the gross income amount) or the actual deductible amount (if 10% or less of the gross income amount). This amount is reduced from the gross income amount to determine assessable income
• Assessable Income Amount field - system calculated: gross income amount - deductible amount = assessable income
• Assessable Asset Amount field - will be blank as no asset value assessed
• Complete Source, DOR and Action fields

Select Continue.

• Check details on the Pension/Annuities Summary (SUPS) screen are 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