Foreign pension coding 106-08030000

Item

Description

1

Foreign lump sums

A deemed date of event rule applies to all assessable foreign lump sums.

Different assessment rules apply for lump sums arrears of foreign pension representing periods in the past, and other foreign lump sums that are not considered to be a foreign pension, for example, lump sum refunds of contributions See Comparable foreign payment lump sum arrears debts and Treatment of lump sums.

In these cases, the date the customer received the lump sum is used as FRPD and the exchange rate on that date is used to convert the foreign currency.

Some countries pay backdated CPI increases as a lump sum. If the customer advises within the notification period, we disregard these small arrears payments and code the Date of Event, (DOV) of the CPI increase as Date of Receipt, (DOR).

If the customer advises outside the notification period, we code the CPI increase from the date it occurred, Date of Event, (DOV).

For example:

Italian pensions have a CPI increase in January, but the customer is not notified until around May with small arrears paid from January.

If the customer advises of this within the notification period, we disregard the small lump sum and code the new CPI rate from deemed DOV = DOR.

If the customer advises outside the notification period, then we code the new CPI rate from DOV, January.

Consider waiver provisions, including if caused by significant delays.

Other countries have backdated CPI increases, for example China, and Croatia has two backdated CPI increases in April and October each year.

2

Legend

DOP = Date of Print of the foreign pension notice.

DOI = Date of Issue of the foreign pension notice.

DOCR = Date of Customer Receipt of the foreign pension notice.

FRPD = Date of receipt of first ongoing payment of the customer's ongoing regular pension payments (that is, not an arrears payment) or the date the non-arrears lump sum was received.

DOR = Date of Receipt in Services Australia.

DOV = Actual Date of Event, that is, date of grant, date of the change in rate or date lump sum received.

APSD = Arrears Period Start Date.

APED = Arrears Period End Date.

BPED = Bereavement Period End Date.

3

Date of event

The date of event used for coding takes into account if Services Australia was advised of the event within the customer's notification period. The date the customer became aware of the event must first be determined and is then compared to the DOR.

The date the customer became aware of the event is taken to be the earlier of the DOCR or FRPD.

The general rule is, if the DOR is:

• outside the customer's notification period - the DOV is used
• within the customer's notification period - the earlier of the DOCR and the FRPD is used

The exceptions to this are if:

• arrears are paid - the date coded cannot be on or before the APED
• a customer is granted a foreign pension as a survivor or receives an increased rate due to the death of their partner - the date coded cannot be on or before the BPED

4

Date of effect

Once the deemed date of event is coded, the date of effect of any rate reductions will also depend on the date the information is processed and if the customer has been paid since the date of event that is coded, see Using the correct date of effect when raising debts.

Notes:

• Small rate variations, such as regular increases for cost-of-living (CPI), are generally invisible to customers as they already receive irregular foreign pension payments due to the different exchange rates used to convert the foreign currency each time a payment is made. In these cases, the FRPD is ignored
• If the DOCR is unknown, a deemed date may be derived by adding 10 days to either the DOI or, where unknown, the DOP. If day 10 falls on a weekend or public holiday, an extra day is added. The adding of an extra day continues until the deemed DOCR falls on a working day in Hobart. For example, if notice dated 1 January, assume customer received advice 11 January
• Some countries (for example, Italy) may stockpile letters so discretion should be used when deciding when the customer should have received the letter

Item

Description

1

Future date of event (DOV)

Example

French pension authorities issued a notice dated 1 October 2013 (DOP) to a customer in Australia.

The date of issue of the notice (DOI) is unknown.

The notice indicated grant of French Old Age Pension effective from 1 January 2014 (DOV) but the first regular payment would be 20 January 2014 (FRPD) and no arrears were payable.

Customer received notice on 20 October 2013 (DOCR) but only notified Human Services on 1 December 2013 (DOR).

Result

French AGE coded from 1 January 2014 (DOV).

No contravention debt exists.

No arrears debt exists.

Explanation

DOCR is earlier than FRPD so is compared to the DOR.

The customer failed to declare the event within the notification period (14 days).

DOV is used but future date means no contravention debt.

2

Use of arrears period end date (APED)

Example

Chinese pension authorities issued a notice dated 1 September 2013 (DOP) to a customer in China.

The date of issue of the notice (DOI) is unknown.

The notice indicated grant of Chinese Old Age Pension effective from 1 January 2013 (DOV) but the first regular payment would be 20 October 2013 (FRPD) and arrears for the period 1 January 2013 (APSD) to 30 September 2013 (BPED) were payable.

On review, Human Services first found out about the event on 1 March 2014 (DOR).

Customer stated they did not recall when they received the notice (DOCR).

Result

Chinese AGE coded from 1 October 2013 (APED + 1).

A contravention debt exists from 1 October 2013.

Arrears debt exists for the period 1 January 2013 to 30 September 2013.

Explanation

DOCR and DOI are unknown and DOP + 10 days is earlier than FRPD so is compared to DOR.

The customer failed to declare the event within the notification period (28 days).

DOV would normally apply but APED +1 is used as cannot be earlier than this date.

3

Use of first ongoing payment (FRPD)

Example

Swedish pension authorities issued an undated notice to a customer in Australia.

The date of issue (DOI) of the notice is unknown.

The notice indicated grant of Swedish Old Age Pension effective from 1 March 2013 (DOV) but the first regular payment would be 20 November 2013 (FRPD) and arrears were payable for the period 1 March 2013 to 31 October 2013.

Customer notified Human Services on 1 December 2013 (DOR) but stated they did not recall when they received the notice (DOCR).

Result

Swedish AGE coded from 20 November 2013 (FRPD).

No contravention debt exists.

Arrears debt exists for the period 1 March 2013 to 31 October 2013.

Explanation

DOCR, DOP and DOI are unknown, so FRPD is used which is compared to DOR.

The customer declared the event within the notification period (14 days).

FRPD is used.

4

Use of date of receipt (DOR)

Example

Human Services received a liaison from Maltese pension authorities on 11 August 2013 (DOR).

The notice indicated grant of Maltese Invalidity Pension effective from 1 February 2013 (DOV) but the first regular payment would be 20 August 2013 (FRPD).

Arrears were payable but no period was specified.

Result

Maltese INV is coded from 11 August 2013 (DOR).

No contravention debt exists.

Arrears debt exists for the period 1 February 2013 to 31 July 2013.

Note: unknown APED may be deemed to be end of month before DOR, see Comparable foreign payment lump sum arrears debts.

Explanation

DOCR is unknown so FRPD is compared to DOR.

DOR is earlier than FRPD.

DOR is used.

5

Use of date of customer receipt (DOCR)

Example

Norwegian pension authorities issued a notice dated 10 July 2013 (DOP) to a customer in Australia.

The date of issue of the notice (DOI) is unknown.

The notice indicated increased rate of Norwegian Old Age Pension effective from 1 May 2013 (DOV) but the first regular payment would be 20 July 2013 (FRPD).

Arrears were payable but no period was specified.

Customer received notice on 15 July 2013 (DOCR) and notified Human Services on 20 July 2013 (DOR).

Result

Norwegian AGE increase is coded from 15 July 2013 (DOCR).

No contravention debt exists.

No arrears debt exists.

Note: arrears debts that may exist as a result of small back-payment of regular increases in foreign pensions are too small to be recovered and investigation is not cost effective, see Comparable foreign payment lump sum arrears debts.

Explanation

FRPD is ignored for small rate increases so DOCR is compared to DOR.

The customer declared the event within the notification period (14 days).

DOCR is used.

6

Use of date of event (DOV) - failed to notify

Example

Italian pension authorities issued a notice with no date (DOP) to a customer in Australia.

The date of issue of the notice (DOI) is unknown.

The notice indicated increased rate of Italian Old Age Pension effective from 1 January 2014 (DOV) but the first regular payment would be 20 January 2014 (FRPD).

No arrears were payable.

Customer received notice on 15 April 2014 (DOCR) but only notified Human Services on 5 June 2013 (DOR).

Result

Italian AGE increase is coded from 1 January 2014 (DOCR).

A contravention debt exists from 1 January 2014.

No arrears debt exists.

Explanation

FRPD is ignored for small rate increases so DOCR is compared to DOR.

The customer failed to declare the event within the notification period (14 days).

DOV is used.

7

Use of bereavement period end date (BPED)

Example

Customer's partner date of death was 10 July 2013.

Human Services received a liaison from Austrian pension authorities on 10 September 2013 (DOR).

The notice indicated grant of Austrian Survivor Pension effective from 10 July 2013 (DOV) but the first regular payment would be 25 September 2013 (FRPD).

Arrears were payable for the period 10 July 2013 to 30 August 2013.

Result

Austrian SUR coded from 17 October 2013 (BPED + 1).

No contravention debt exists.

No arrears debt exists.

Explanation

DOCR is unknown so FRPD is compared to DOR.

DOR is earlier than FRPD.

DOR would normally apply but BPED +1 is used as cannot be earlier than this date.

8

Lump sum date of event (DOV)

Example

Human Services received a liaison from Swiss pension authorities on 15 February 2014 (DOR).

The notice indicated grant of Swiss Old Age Pension but that a lump sum in lieu of the small rate would be paid on 10 March 2014 (FRPD).

Result

Lump sum coded as Swiss 'AGE' from 10 March 2014 (DOV).

No contravention debt exists.

No arrears debt exists.

Note: lump sum assessable for 12 months from date received. Manual review set for 10 March 2015 to remove Swiss AGE from assessment.

Explanation

DOCR is unknown so FRPD is compared to DOR.

DOR is earlier than FRPD.

DOV is used.

Note: DOV for lump sums is taken to be date received by the customer, that is, start of assessable period.

9

Lump sum date of event (DOV) - failed to notify

Example

Korean pension authorities issued undated notice to customer in Korea.

The date of issue (DOI) of the notice is unknown.

The notice indicated grant of lump sum refund of contributions to be paid on 20 August 2013 (FRPD).

On review, Human Services first found out about the event on 1 March 2014 (DOR).

Customer stated they did not recall when they received the notice (DOCR).

Result

Lump sum coded as Korean 'OIN' from 20 August 2013 (DOV).

Note: lump sums that are not considered to be foreign pensions are coded on Foreign Income Details (FID) screen). See Treatment of lump sums.

A contravention debt exists from 20 August 2013.

No arrears debt exists.

Note: lump sum assessable for 12 months from date received. Manual review set for 20 August 2014 to remove Korean OIN from assessment.

Explanation

DOCR, DOP and DOI are unknown, so FRPD is used which is compared to DOR.

The customer failed to declare the event within the notification period (28 days).

DOV is used.

Note: DOV for lump sums is taken to be date received by the customer, that is, start of assessable period.

Item

Description

1

Open the Calculator

Open the NZ Assumed Rate Calculator.

2

How to calculate a NZ Assumer Rate (ASR)

The NZ Assumed Rate (ASR) needs to be applied where a customer:

• comes to Australia long-term (claiming Australian pension or RTA) while in receipt of a ‘domestic’ direct deduction rate of NZ pension, or
• is a non-protected SCV holder long-term in Australia (Rate Calc B) and a third country pension is granted or adjusted significantly

Remember that we are calculating the rate of NZ pension that NZ will pay in NZ dollars. Australian pension rules do not apply.

3

Using the ASR Calculator

The Calculator has separate tabs for:

• Main
  • This tab is where you input the customer data needed to calculate the ASR.
• NZS/NZI Calcs
  • These tabs shows the calculations for each NZ payment type based on the data in the Main tab
• Rates
  • This tab has all the maximum NZ Rates used in calculation since 1 April 2008

4

Using the Main tab

Top section

You should input the CUS and PTR names and CRNs in the top section. Once all the data is input correctly, the ASR for CUS and PTR will display in the ASR fields.

Data fields

• Notes:
  • Relevant date means the date field entered at the bottom
  • Valid values are provided
  • The calculator will display an ERROR where data is missing or incorrect
• Partnered?
  • Enter ‘Y’ if the CUS has a PTR or ‘N’ if not
  • If ‘Y’ is entered, the Need ASR for PTR? field will display
  • Enter 'Y' if you also need an ASR for the PTR or ‘N’ if not
  • Note: The non-qualified spouse (NQS) rate of NZS is not paid long-term in Australia so can be ignored
• NZ Payment Type
  • Enter ‘NZS’ for NZ superannuation or NZ veterans pension and ‘NZI’ for NZ supported living payment
  • If ‘NZI’ is entered, the Is PTR NZI NQS? field will display
  • Note: The non-qualified spouse (NQS) rate of NZI is paid long-term in Australia and must be calculated
  • Enter ‘Y’ if the PTR is not qualified for NZI in their own right or ‘N’ if they are qualified for NZI in their own right. You can check if the PTR is also claiming DSP
  • This determines whether the PTR rate is the same as CUS or uses their own data
• Dependent child(ren)?
  • Note: If CUS is not partnered and the payment type is NZI, then a different rate applies is CUS has dependent children
  • Enter ‘Y’ if CUS has dependent children or ‘N’ if not
• Non-protected SCV?
  • Enter ‘Y’ if CUS is not protected and ‘N’ if not
  • If ‘Y’ is entered, the 3CP field will display. If CUS or PTR has a third country pension, code the AUD amount for the relevant date in ANN frequency or enter ‘0’ if not
  • Note: The FPD screen will show the converted AUD amount
• AWAR/NZWAR
  • Enter CUS/PTR data from the NZI screen for the relevant date.
  • AU Notional Rate
  • Enter the Australian Notional Rate for the relevant date in ANN frequency. See Table 4 > Step 1 on the Resources page for how to code the Australian Notional Rate
  • Note: The PRC screen will show the annual Australian Notional Rate
• XCH Rate
  • Enter the AU to NZ exchange rate for the relevant date
  • Note: The RDFXS screen will show the exchange rates
• Date
• Enter the date for which the ASR calculation is required
• Note: You will need to enter more dates and change the data for any change points for example NZ CPI on 1 April or if the Australian Notional Rate changes

Note: ASR for PTR is required even if one member of couple is not eligible for AU pension.

Item

Description

1

Coding ASR in Australian new claim (NCL) or Return to Australia (RTA)

For coding ASR in an:

• Australian NCL, code the ASR from the start date of the Australian NCL
• RTA, code the ASR from the date of lodgement of the NZ claim

For all claims, regardless of whether assessed under an agreement or not (autonomous), to determine the Australian Notional Rate to use in the calculation of the ASR, depending on the income support payment type:

• For PEN system payments, go to the Pensions Rate Calculation (PRC) screen and check the NOTIONAL RATE field, or
• For NSS system payments, go to NSS Period Rate Explanation (NREX) screen and calculate the total of all components less the AFF.INC/Affecting Income in the Amount per fortnight fields and multiply the result by 26

2

Coding ASR in grant of 3CP for non-protected SCV holder long-term in Australia

For grant of third country pension (3CP) for non-protected special category visa (SCV) holder long-term in Australia, if the 3CP is:

• less than the NZ pension and NZ has:
  • already adjusted the NZ pension because of the 3CP, code the 3CP from date the NZ pension changed
  • not adjusted the NZ pension because of the 3CP, code the 3CP and the ASR from 'T' for today
• more than the NZ pension, code the 3CP and arrears as normal and zero the NZ pension from 3CP arrears period start date (APSD). See Comparable foreign payment arrears debts

Note: when updating a foreign pension to zero, staff must also update the Foreign Claim Details (FGD) screen to FIN-NOM from the same date.

3

Reviewing ASR for NZ Actual/Notional Rate equal to NZ ASR or not more than $500 per year higher

Zero the NZ ASR and code the NZ Actual/Notional Rate from ‘T’ for today if all the NZ Actual/Notional Rate advised on the Service Decision is/are either:

• equal to the NZ ASR that is on the record, or
• more than the NZ ASR but less than $500 per year higher,

In this case there is either no adjustment to the Australian rate, or it is not cost effective to investigate.

4

Reviewing ASR for NZ Actual/Notional Rate less than NZ ASR or more than $500 per year higher

If any of the NZ Actual/Notional Rate advised on the Service Decision is/are either:

• less than the NZ ASR that is on the record, or
• more than the NZ ASR and more than $500 per year higher

Then:

• go back to the earliest date the NZ ASR was coded and update the rates to the NZ Actual/Notional Rate for all dates of event and revaluations. For example, each DOV of the ASR that was coded, as well as the NZ Actual/Notional Rates on the Service Decision and any exchange rate changes (RVL)

In this case there may be an adjustment to the Australian rate.

If the result of the review is:

• favourable, any arrears due to the difference in the NZ pension rates can be paid to the customer as part of a Secretary initiated review based on the date the ASR was coded. See Secretary initiated review of decision
• unfavourable, any debt should be considered under waiver due to administrative error. See Administrative error waivers

5

Reviewing ASR if NZ ASR was zeroed

If the NZ ASR was zeroed due to hardship, go back to the earliest date the NZ ASR was zeroed and update the rates to the NZ Actual/Notional Rate for all dates of event and revaluations. For example, each DOV for the NZ Actual/Notional Rates on the Service Decision and any exchange rate changes (RVL).

Then follow Item 1 and Item 2 for the period the ASR was coded.

Note: this will result in a negative adjustment which should be raised as an ordinary debt.

6

Incorrect embargo for NZ ASR

Return all incorrectly embargoed funds to customer using vendor process.

Then follow Item 1 and Item 2 for the period the ASR was coded.

Item

Description

1

What can the script do?

The script can:

• record a new grant of foreign pension
• correct an existing record
• record an historical reassessment of an existing record
• transfer an existing record to a new payment type (for example, INV to AGE)
• process a foreign pension Consumer Price Index (CPI) review when one falls due

2

What letters are sent and in which circumstances?

There are 3 situations where the script may issue a letter.

• When processing a 'Due' CPI review. The user may choose to follow up the new rate of foreign pension by having the script issue a letter
• If the information being used to code the foreign pension is not from an 'official' source. In this case the script will allow the update of the foreign pension, but a letter will be issued asking the customer to provide their latest foreign pension certificate or statement
• If the currency of payment of the foreign pension is not considered an official currency for the country in question. In this case the script will allow the update of the foreign pension, but a letter will be issued asking the customer to provide their latest foreign pension certificate or statement showing how much they get paid in the currency in which it is paid

3

What are all of these activities generated by the script?

The script is controlled by Online Document Recording (ODR) DOCs and Manual Follow-ups (MFU). For each foreign pension to be added an ODR DOC and an MFU are created. The script is set up in such a way that if the update action fails, but the MFU remains on the record, the script can be re-run once the issue causing the failure is resolved. It will then 'read' the DOC and complete any outstanding coding.

4

How are problems to be reported?

If the script fails for any reason, Service Officers should report the failure through normal system support protocols. If an error message is displayed, then it should be included in (pasted into) the referral if possible.

Any issues relating to Policy or the Business Rules applied by the script should be sent to the Residence and International program.