Automation of income stream reviews

08 February 2018

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Hank Jongen

Hank Jongen is General Manager at the Department of Human Services.

From 1 January 2018, the Department of Human Services is introducing a new one-step electronic data transfer process for income stream reviews.

Many providers already provide Centrelink with information electronically for income stream reviews using a two-step process.

An income stream is a series of regular payments: this can be from accumulated superannuation contributions, or purchased using superannuation or other funds.

Each financial year, Centrelink reviews certain types of income streams to ensure it assess people’s payments correctly.

It does this by sending recipients a letter in August and February each year asking them to advise the amount of income they receive from their income stream products. Centrelink also asks them to confirm their account balance and any commutations that have been made.

For income stream providers and administrators, these reviews may mean an increase in enquiries. Recipients and their financial advisers may contact them to obtain these details.

The change means providers and administrators can easily provide Centrelink this information on behalf of its mutual recipients and card holders.

It’s a more efficient way to do the reviews and there’s no change to how the Department of Human Services assesses income streams.

However, your clients will still need to inform Centrelink about changes as they happen. Recipients must always tell Centrelink within 14 days of any changes to their income stream, including if they take a lump sum other than their normal payment.

Providers other than self-managed superannuation funds and Small APRA Superannuation Funds can register for the new process in 2018. Registration becomes mandatory from 1 January 2019.

Reviews usually occur in August, but Centrelink may also review people again in February each financial year. The income streams reviewed are:

  • account-based pensions or allocated pensions;
  • account-based annuities or allocated annuities;
  • market-linked pensions or term-allocated pensions;
  • lifetime or life expectancy income streams that are:
    • from a self managed super fund or small Australian Prudential Regular Authority (APRA) fund; or
    • fully or partially exempt from the assets test.

Centrelink also reviews account balances and commutations.

Electronic data transfers between Centrelink will save providers time and money. It limits the need for recipients to contact their provider to confirm their income stream details during the reviews.

This means fewer recipient contacts and may reduce the letters or income stream schedules sent during the review.

It will also improve customer service. The electronic transfer replaces a letter based review system. This gives providers more time to focus on the things that are most important to their business.

To help providers transition, the Department of Human Services is holding regular information sessions. For further details or to register, email income.streams@humanservices.gov.au

Information about the collection and use of personal information under the new process is available by reading the Income Stream Reviews on the Department’s website – www.humanservices.gov.au/individuals/privacy#privacynotice

More information is available at humanservices.gov.au/incomestreamreviews

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