Payments are generated when the primary client is found to be eligible for a case component and the case is activated. Deductions and payments are processed at the same time.
When the case is activated, the system creates a financial component which defines the amount, delivery method, frequency, and period for which a payment or bill is issued as well as the nominee who will receive the payment or bill. During this processing, a total deductible amount is calculated for each nominee who is to receive a payment on the case. This is the total amount that can be deducted from a payment issued to the nominee. This calculation excludes case components that cannot be deducted from, any minimum client payments, and the maximum deduction rate configured for the product at administration.
The system retrieves any active deductions set up against the case and processes each deduction in turn. Each deduction is processed against the reducing balance of the total deductible amount calculated for the nominee.
Deduction amounts are calculated for percentage-based deductions and validated against the limits that were set for the deduction during system administration. If the limits are exceeded, or there is insufficient benefit to cover a particular deduction, the appropriate action is taken based on the processing action specified for the deduction type at administration. Deductions that cannot be processed are skipped. Processed deductions are deducted from the payment issued to the nominee. A deduction history record is created every time a deduction is processed or skipped.
For more information on financial processing, see the Cúram Financials Guide.