Foreign pension coding 106-08030000

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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 International Program homepage. The Resources page has a link to the International Program homepage.

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 a number of 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 actually 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 Greek austerity reductions, which actually reduce the gross rate payable.

Foreign pension lump sums may be arrears of a comparable foreign payment (CFP) that represents cumulative entitlement for a period in the past, usually associated with a new grant. 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 are covered in Comparable foreign payment lump sum arrears debts.

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.

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

International Services (CIS) is responsible for:

• coding all new instances of foreign pensions from any country
• coding or updating any foreign pensions for customers paid their Australian payment under a social security agreement
• updating any foreign pension that has been previously updated through an automated foreign pension update process

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

• foreign pension reviews and changes to existing foreign pensions in all other cases
• foreign earnings, private superannuation, income and assets updates, see Foreign income and assets

CIS are 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.

The Foreign Pension Script must be used when coding foreign pensions. The script will guide the user through the coding process. All foreign pension documents, such as Notice of Grant (NOG) or advice of the change of rate, must be scanned to the customer record.

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'.

The date from which coding is recorded on FPD may not be the date the payment commenced/changed. This is to allow for the fact that foreign pensions are generally granted with an arrears period, varied notification rules in other countries and our own notification period.

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) is:

• 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 (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 due to 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 (coding DOV = BPED+1)

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 notices to be issued. Multiple notices may also be issued 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.