Foreign pension coding 106-08030000

Note: if the customer is only querying the exchange rate and not a new grant or change in the rate of a foreign pension, see Foreign currency and exchange rates.

Centrelink International Services (CIS) is responsible for:

• new grants of foreign pensions or coding foreign pensions for the first time for example, in a new claim, and
• foreign pension rejections, cancellations and suspensions, and
• updates to existing foreign pensions :
• paid under an agreement, or
• previously updated by an automated process (Channel code of DEX or CPI)

Service centre or smart centre call staff are responsible for coding :

• foreign earnings, private superannuation, income and assets updates, see Foreign income and assets
• changes to existing foreign pensions, such as CPI updates, for autonomous customers where the automated foreign pension update process (Channel code is either DEX or CPI), has not been applied

Note: if a foreign pension has been updated via DEX or CPI in the last 12 months, the pension is considered up to date. The Last confirmed date field on the Foreign Pension Details (FPD) screen shows the date the pension was last updated by the automated process. No referral to CIS for further update is required.

Foreign pensions are coded on the Foreign Pension Details (FPD) screen. There are specific rules about the date of event to use when coding foreign pensions. The Resources page has examples of determining the date of event to use for coding. The Foreign Pension Script will help staff to code foreign pensions correctly and is mandated to be used when available.

Information is available on known foreign pensions from agreement countries and some non-agreement countries. To help identify foreign payments, sample foreign documents may be available through the Agreement Country Document Catalogue (ACDC) and the Non-Agreement Country Document Catalogue (N-ACDC) Country Index on the Resources page of Eligibility and coding of foreign pensions from non-agreement countries.

Note: generally, all foreign pensions should be coded in the source currency. Foreign currency amounts are converted to Australian dollars using an appropriate exchange rate. See Foreign currency and exchange rates. Where genuine circumstances or difficulties prevent the customer from providing an official statement, staff should code what the customer has provided. This will avoid any ongoing overpayment or delays to processing. This can include details from the customer claim, bank statements or a customer declaration. See Process page for instructions.

Foreign pensions should be identified and coded correctly to make sure that the payment is assessed properly:

• old age or retirement pensions are usually coded as Type: 'AGE'
• disability or invalidity pensions are usually coded as Type: 'INV'
• pensions for survivors (widows, orphans, parents) are usually coded as Type: 'SUR'
• military service pensions (that is, employed by army, navy, air force) are usually coded as Type: 'SER'
• payments made for reasons arising from conflict (injury or internment) are usually coded as Type: 'WAR'
• other foreign pensions are generally coded as Type: 'OPN'
• restitution payments (for persecution during wartime) must be coded as Type: 'RSP'
  Note: in some cases, AGE/INV/SUR pensions from Germany or Austria may include deemed periods of insurance due to National Socialist (Nazi) persecution. These payments must be recorded as Type: 'RSP'.

Note: staff must not create a Foreign Pension Details (FPD) record just to record a foreign pension reference number. Only record a foreign pension reference number on FPD if rate information has been received for a foreign pension. Otherwise, foreign pension reference numbers should be recorded on the Foreign Claim Detail (FGD) screen. For example, Work and Income New Zealand (WINZ) may ask staff to update records with a New Zealand (NZ) reference number (SWN) so they can access the International Verification Facility (IVF, the portal). The SWN should be recorded on FGD unless:

• an FPD record already exists
• an Assumed Rate is being recorded (see New Zealand Agreement and foreign pension information), or
• to process a NZ Service Decision (NZ notice of grant)

Many foreign pensions are made up of the main pension, generally coded in the Basic Amount field and supplementary benefits may be added, generally coded in the Social/Welfare Amt field.

However, there are specific coding requirements for several known foreign pension types and there may be individual components of pensions or supplements that must be recorded separately or, in some cases, cannot be coded at all.

Some foreign pension entitlements may be separate pensions rather than components. The basic principle is that the income is assessable against the person who is entitled to the payment, even if received by another person. For example:

• US Spouse or Child Pension are entitlements of the spouse or child and, if assessable, should be coded on the spouse's or child's record, or
• Swiss child benefit is an entitlement of the Swiss Old Age or Invalidity pensioner and is added to the Old Age or Invalidity pension rate

In all cases, the gross rate of foreign pensions and components is assessable even if there are deductions for tax, health insurance or even other pension insurance, for example, old age insurance paid by invalidity pensioners. However, care must be taken with some reductions for which the pensioner receives no value, such as some of the Greek austerity reductions, that reduce the gross rate payable.

See specific agreement country Operational Blueprint (OB) files for assessment and coding information on known payments from agreement countries.

Centrelink International Services (CIS) is usually notified of a grant or rejection of a foreign pension from an agreement country. In some circumstances, customers will still be asked to supply a copy of their statement from the paying authority even though information has been received from the agreement country. Foreign pension statements presented by customers should still be accepted.

To avoid accruing overpayments, new foreign pensions advised by phone must be coded immediately even without official information. Where it is not possible to determine the correct date of event, use ‘T’ for today.

The date foreign pension coding is recorded on the Foreign Pension Details (FPD) screen may not be the date the payment commenced or changed. This is because, foreign pensions:

• are generally granted with an arrears period
• have a notification period
• have varied notification rules in other countries

To avoid accruing overpayments, new foreign pensions advised by phone must be coded immediately even without documentation. Where it is not possible to determine the correct date of event, use ‘T’ for today.

To calculate the correct date of event, the general rule is, if the Date Of Receipt (DOR) of the advice (whether it came from the customer or from the paying authority, for example, a liaison provided by an agreement partner):

• outside the customer's notification period - the actual date of change is used (coding DOV = actual DOV)
• within the customer's notification period - the earlier of the following dates is used:
• the date the customer received the advice (coding DOV = customer DOR), or
• the date the customer received the first ongoing payment (coding DOV = First Regular Pay Date (FRPD))

The exceptions to this are:

• if arrears are paid and the arrears period is known - the date will be the later of the date determined above, or the day following the Arrears Period End Date (APED) (coding DOV = APED+1)
• if arrears are paid and the arrears period is not known - the date will be the date the coding is processed (coding DOV = t for today), or
• if a customer is granted a survivor pension or receives an increase in rate to their own foreign pension because of the death of their partner - the date will be the later of the date determined above, or the day following the Bereavement Period End Date (BPED) (coding DOV = BPED+1)

In some circumstances, Services Australia know that the rate of NZ pension (NZS/NZI/NZV) paid will be reviewed and changed once NZ receive the necessary information. To avoid any negative effects on customers’ Australian rates, Services Australia calculate and code the rate that NZ will pay rather than what they are actually paying. This is referred to as the NZ Assumed Rate (ASR).

The ASR is coded when a customer:

• comes to Australia long term, is receiving an NZ Domestic Rate of NZ pension. NZ will pay their domestic rate for 26 weeks and then stop payment. When they process the NZ pension claim they calculate the NZ Proportional Rate that should have been paid and the difference between the NZ Domestic Rate and the NZ Proportional Rate is a debt for the customer. There may be some arrears of NZ Proportional Rate for the period where NZ stopped paying the NZ Domestic Rate.
  If the customer:
• lodges an Australian pension claim, the ASR is coded in the claim from the start date of the claim
• is already receiving an Australian pension, the ASR is coded from the date of lodgement of the NZ pension claim
  or
• is a non-protected Special Category visa (SCV) holder who is long-term in Australia, receiving both an Australian pension and an NZ pension and a third country pension (3CP) is granted or changes. Because the 3CP is directly deducted from both the Australian and NZ pension rates, Services Australia know that the NZ pension rate will be less when they reassess, so Services Australia apply this lower NZ pension rate (ASR) when coding the 3CP

Note: there are cases where the rate of 3CP is higher than the maximum NZ pension rate. In these cases, there may still need to be an adjustment of Australian pension rate and calculation of arrears debts for the amount of 3CP in excess of the NZ maximum rate. Calculations in these cases must take into account that the NZ pension rate would be reduced to zero.

To avoid this, when Services Australia code the 3CP, they also calculate and apply the reduced rate of NZ pension (NZ Assumed Rate (ASR)). By doing this there is no adjustment to the customer’s Australian rate at all and no need to calculate any arrears debt.

Note: where ASR is coded and a customer contacts Services Australia advising hardship after the NZ pension stops being paid, the ASR can be zeroed but the customer must be advised that they will then incur a debt from Services Australia when the NZ Actual Rate is determined. This must be noted on a DOC. When the NZ Actual Rate is received, an ordinary contravention debt must be calculated and raised for the period during which the ASR was zeroed.

The NZ Assumed Rate Calculator is available to Centrelink International Services (CIS) staff through the Residence and International program homepage. See the Resources page for a link.

Foreign pension lump sums may be arrears of a comparable foreign payment (CFP) that represents cumulative entitlement for a period in the past. Arrears are usually associated with a new grant, but can also be the result of a rate revision for a period in the past.

The ongoing rate of the foreign pension must be coded from the correct date of event first and then the arrears payment should be considered. The treatment and coding of CFP arrears is covered in Comparable foreign payment lump sum arrears debts.

• Note: staff must investigate any ordinary contravention debt and the arrears debt when investigating arrears debts following an update under the International Data Exchange program, or where the foreign pension was coded ‘T’ for today as advised over the phone

See Date of event for foreign pension coding (above) and International Data Exchange Program and auto indexation of foreign pensions.

Other lump sums may be:

• a separate entitlement or ad hoc payments with their own qualification criteria, such as, bereavement or funeral grants,
• bonus payments on top of the foreign pension, such as, annual holiday or Christmas bonuses,
• payments in lieu of pension, such as, if a customer's rate of pension is too small or if the provisions of the legislation allow commutation of a pension to a lump sum, or
• refund of contributions when a customer does not have enough insurance to qualify for a pension or other withdrawals

The treatment and coding of other foreign lump sums is covered in Treatment of lump sums. However, if the payment of a lump sum prevents any further entitlement to a foreign pension, the FPS status must be updated from the relevant date to reflect the customer is not entitled to a pension from that country (FIN-NOM), see Foreign Pension System (FPS) statuses and reviews.

In general, a person is notified of the grant of a foreign pension before any money is actually paid. In many cases, Services Australia may even be notified of the grant before the customer.

Policy advice is that, if a person who is entitled to a foreign pension is deceased at the time of processing the notice, it is unlikely that the person received the benefit of the income, so no further action is taken for either the person or surviving spouse. Similarly, if the person's partner is deceased at the time of processing, then there is no partner debt but may be a debt for the customer.

This does not apply to a person who simply failed to declare their pension and did receive the benefit of the income. In these cases, both arrears debts and debts for failing to notify Services Australia should be raised and recovery attempted.

If a customer is granted a survivor's (widow/er) pension or an increase in their own payment following the death of a partner, the survivor's pension income, or additional surviving spouse payment is not assessed during the bereavement period.

If the survivor (widow/er) pension is granted after the death of a partner who was receiving a Restitution payment made to victims of Nazi (Nationalist Socialist) persecution from Germany, Austria or the Netherlands, the survivor's (widow's) payment should also be recorded as type 'RSP'.

Customers who do not declare a grant or change in the rate of a foreign pension within their notification period may incur an overpayment. It is also common for customers to receive lump sum arrears of foreign pensions, which may also result in an overpayment. If the customer is a member of a couple, the partner may also have been overpaid.

Debts for failing to notify in time and for arrears lump sums are raised under different sections of the social security law. This means that customers will often have multiple debts, which need separate letters to be issued, including to the customer's partner.

Rejections, suspensions and cancellations

Some customers need to make a claim for a foreign pension. If the claim is rejected, it is necessary to first check if the customer took reasonable steps to complete the claim process or not, for example, rejecting for failing to provide details. See Assisting customers to claim a foreign pension.

Foreign pension authorities may need a customer to provide details to continue to receive an existing foreign pension, for example, life certificates. If a person who is receiving a foreign pension does not comply with a reasonable request by a foreign pension authority, they may be considered to have deprived themselves of income. See Assisting customers to maintain an existing foreign pension.

Reviews of foreign pensions

Foreign pensions are usually indexed for cost of living increases each year. Customers are obligated to notify of increases to their foreign pension. If the foreign pension is from a country that is covered by an automated foreign pension update process Services Australia will generally receive CPI increases automatically.

If a customer's marital status changes, for example becomes single or partnered, the rate of a foreign pension may change and should be reviewed.