25.04.2018 – West Country Farmer – New Entitlement Transfer Status Complication
The RPA online computer system is transferring entitlements without knowing if they can be used in 2018.
The system has to cope with huge amounts of data, and has built within it rules which enable it to process certain transactions automatically, easing up on staff workloads and enabling most transactions to happen (in theory!) quickly and easily. However no computer programme designer can foresee every possible scenario, and each year new issues arise that no-one has considered. We are now used to entitlements not automatically transferring when a farmer has not yet been paid for his 2017 claim or where a Post Payment Amendment [PPA] query is being investigated for 2017 (both of which result in the farmer’s entitlements being put on hold, and any transfer applications then going into “pending” on the seller’s entitlement screen, ready to move to the transferee once the 2017 claim is complete).
However this year we are also seeing some instances of entitlements that are not yet confirmed for 2018 use (i.e. with outstanding PPA queries), being automatically transferred when an application is submitted online (rather than going into “pending transfers”). When this happens the transfer confirmation message sent to the transferor and transferee will look correct except it may display an incorrect use by date of 2017 or even 2016. Not 2018 or 2019. The RPA have however confirmed that entitlements that do transfer may show as being available for 2018 on Part H of the BPS 2018 claim form, no matter what use by date is showing on the confirmation of transfer message.
This anomaly occurs where a farmer has been paid the 2017 claim, but has an outstanding PPA query on payments received/areas claimed in 2015 or 2016, or where the RPA are re-examining claims in those years as is often the case for commons’ claimants (many of whose queries from 2015 still remain unresolved). Where this happens the RPA computer automatically puts the entitlements for the year of the query on hold and reverts the start of the “use by” date period for the claimant’s entitlements to the previous year, until the query is resolved. However the computer’s automatic entitlement transfer process only checks the previous year’s entitlement register to ascertain whether the entitlements are available to transfer. As in this particular scenario the 2017 entitlement register shows the transferor was paid and the entitlements were activated, the computer therefore automatically transfers the entitlements, however with an incorrect use by date.
Where this happens, the RPA cannot amend the incorrect use by date manually, and the advice is the transferor should continue to submit transfer applications, and that all being well the computer will simply update once the PPA is complete. As we know, the “use by” history of entitlements should relate only to the SBI and not the entitlements, and therefore if the computer transfers them (as they were claimed on successfully in 2017) to a new SBI, the use by date relating to the transferor’s SBI should be irrelevant. However the RPA system relies on the entitlement register being updated and, in this scenario, being used in 2017, but having PPA queries on 2015 or 2016, and therefore the entitlement register can only show a use by date of 2017.
It is important to understand that in most cases PPA queries relate to underpayments, not overpayments, and therefore it is likely an SBI will have MORE entitlements, not less, once a query is resolved. However the RPA are unable to give any written assurances of this, or speed up the resolution of any outstanding PPA queries or the processing of outstanding 2017 (or before) claims. Given the RPA workload as most farmers prepare to submit their 2018 BPS claim, it is now highly likely that most of these issues will remain unresolved by the 15th May claim and transfer deadline. The RPA have however confirmed that they will aim to resolve all outstanding PPA queries before they start processing the 2018 BPS claims.
Therefore those buying entitlements should be aware that transferred entitlements may not always show on their SBI before the deadline, but as long as they have a screenshot of the submitted transfer application, or a transfer confirmation message (even with the wrong use by date) they should proceed to make their 2018 BPS claim on the assumption that the transferred entitlements will be showing on their SBI for 2018 before the RPA start to process the claims this November. Although this may feel uncomfortable, in essence it is no different to what happened up until 2016, when all transfer applications were on paper RLE1 forms which were rarely processed before the 15th May deadline.
If buying entitlements make sure the selling agent is not paying out to the vendor until the RPA has subsequently confirmed an updated “use by” date of 2018 for the transferred entitlements and that they have not been clawed back. This will be after the RPA’s initial standard confirmation.
An unfortunate and messy legacy created by the RPA being unable to keep up with the work load and complexity created by the BPS scheme.