Claims 

Purpose

This component enables the processing of claims submitted by an employee. Employees are eligible for certain monetary and non-monetary benefits, as a part of their compensation package. Employees submit a claim based on their eligibility, to avail these benefits.

Reimbursement allowances can be of the following types:

●      Amount (monetary) – Monetary claims are reimbursements against a particular eligibility amount. For example, a medical reimbursement, subject to a maximum amount of Rs.15,000/-, in a given assessment year.

●      Unit or a number (non-monetary) – Non-monetary claims are those claims that an employee typically makes for the purpose of company work. Claims of non-monetary nature are made in whole units. For example, protective clothing, briefcases, calculators, and number of litres of petrol. Claims of non-monetary nature are made in whole units.

●      Amount, subject to a number limit on the number of times that you can claim the allowance – For example, a stitching allowance eligibility of Rs.1000/- per financial year, for which the employee can submit a claim only twice in that financial year.

Slab based claims

Some types of reimbursements have a validity period that is greater than a year, and are called Long Term Reimbursements. In this case, the employee is eligible to a certain amount, and you pay this amount to the employee across several financial years. The validity period of such reimbursements can be either a fixed block of years, or may be dependent upon some event or action.

For example, an employee is eligible for a car maintenance allowance with a validity period of four years. The validity period starts from the date of purchase of the car. For the first and second year, the employee is eligible for a car maintenance allowance of Rs.5000. In the third year, the eligibility is Rs.7,500 and in the fourth year, the eligibility is Rs,10,000.

●    You maintain slab based claims using the Long term reimbursements infotype (0590). For more information, refer to Long Term Reimbursements.

●    While submitting a claim, an employee must also submit a proof of expense (monetary benefit), or a proof of entitlement (non-monetary benefit). Some reimbursable allowances are exempt from tax for a certain limit. The employee can claim the tax exemption by submitting a proof of expense or a proof of entitlement.

Features

Reimbursement for Employeestransaction (PC00_M40_REMP)

You can process claims using the Reimbursement for Employees transaction (PC00_M40_REMP). In this transaction, you can disburse claims through a:

●      Regular payroll run – The system updates the Additional Payments infotype (0015) with the information that you enter in this report, and disburses the claim along with the regular payroll.

●      Off-cycle payroll run – The system updates the One-Time Payments Off-Cycle infotype (0267) with the information that you enter in this report. The approved claims can be disbursed through an off cycle payment process. For example, claims may be disbursed on the same day, or all claims submitted during the week may be disbursed on one particular day of the week.

Processing of Claims

The Pay Scale Grouping for Allowances determines the Reimbursement Types for which an employee is eligible. You define the different Reimbursement Types through Tax Codes.

For more information, on Tax Code configuration, refer to the IMG under Payroll India ® Tax ® Tax Liability on Reimbursements, Allowances and Perks ® Assign Tax Code Limits to Wage Types.

The following criteria determine the processing of a claim:

·         Eligibility

The system determines whether an employee is eligible for a particular reimbursement or not, using Pay Scale Grouping for Allowances. A reimbursement can be either monetary or non-monetary in nature. If the reimbursement is:

○       Monetary in nature, the system determines employee eligibility through the Indirect Evaluation of a particular Reimbursement Type. If an Individual Reimbursements infotype (0589) exists for an employee, the system will determine the eligibility for that employee using the infotype instead of through Indirect Evaluation. You can also restrict the number of times that a claim is made within a validity period.

If there is a change in the eligible amount for the employee, the system prorates the same accordingly.

For more information, refer to Indirect Evaluation and Salary Packaging for India.

○       Non-monetary in nature, the system determines employee eligibility using Pay Scale Grouping for Allowances. If an Individual Reimbursements infotype (0589) exists for an employee, the system will determine the eligibility for that employee using the infotype instead of through Pay Scale Grouping for Allowances.

You can configure the eligibility for the non-monetary reimbursements in the RAP no field of the table view Reimbursement Allowances Perks - eligibility and calculations (V_T7INA9).

If there is a change in the Pay Scale Grouping for Allowances of the employee, the system prorates the employee eligibility to a rounded up value, as per configurations.

○       Monetary in nature, but with a limit on the number of times the employee can make a claim. The system determines the eligibility through a combination of Indirect Evaluation (monetary) and Pay Scale Grouping for Allowances  (non-monetary).

If you want to configure your own eligibility criteria, you may do so through the user exits provided in the system. For more information, refer to the IMG under Payroll India ® Reimbursements Allowances and Perks ® User Exit: Save and Retrieve Claims Data.

For more information, refer to Pay Scale Grouping for Allowances.

 

·         Validity Period

You can configure the validity period of a reimbursement through Pay Scale Grouping for Allowances and Reimbursement Types. For a Reimbursement Type, you can define different kinds of validity periods, such as monthly, quarterly, semi annually, or annually.

For more information on configuring reimbursement wage types, and specifying their validity periods, refer to the IMG activity under Payroll India ® Reimbursements, Allowances and Perks ® Calculate Eligibility for RAPs.

·         Period end treatment

At the end of the validity period of a particular Reimbursement Type, you can configure the system to treat the unclaimed balances in the following ways:

○       Balance disbursement – The system pays the unclaimed balance to the employee.

○       Balance carry forward – The system carries forward the unclaimed balance across one or more validity periods.

○       Lapse – The system neither disburses the unclaimed balances of a validity period, nor does it carry it forward to the next validity period.

For more information, see Period End Treatment of Claims.

Reports

You can generate the following reports using the Claims functionality:

○       Status for Claims report (HINCREMS) – To check the balance and the status of claims made by employees.

○       Claims Carry Forward Balance report (HINCREMC) – To carry forward the unclaimed balances for a reimbursement wage type. You can run this report only once during validity period and it is advisable that you run it at the end of the validity period.

○       Claims Balance Disbursement report (HINCREMT) – To disburse the balance at the end of the validity period.

○       Claims Balance upload program (HINUUPCF) – To upload employee Claim status/balance from a local database file into the SAP system.

You typically use this report to upload Claims Balance information from a legacy system. In the event of your company going live in the middle of the financial year, or if there are any carry forward balances that need to be carried forward to the year of going live, you can use this report and upload the data.

For example, you are going live on 1st April, and there are balances of the Medical reimbursements for the previous financial year, which needs to be carried forward into the current year. You can upload this legacy information into the SAP system using the Claims Balance upload program (HINUUPCF).

User Exits

For customization purposes, you have been provided with user exits for:

●      Saving and printing additional claims information – Using the screen enhancements provided in the Reimbursement for Employees transaction (PC00_M40_REMP), you can record additional claims information which is specific to your organization. For more information, refer to the IMG under Payroll India ® Reimbursements Allowances and Perks ® Claims ® Capture Additional Claims Disbursement Information ® User Exit: Save and Print Claims additional information.

●      Determining the Carry Forward Dates – You can create your own company specific dates for carrying forward the unclaimed balances at the end of their validity period. For more information, refer to the IMG under Payroll India ® Reimbursements Allowances and Perks ® Claims ® User Exit: Determine Carry Forward Dates.

●      Saving and retrieving claims data – You have an option to save the claims data generated using the Reimbursement for Employees transaction (PC00_M40_REMP) in customized tables and infotypes. For more information refer to the IMG under Payroll India ® Reimbursements Allowances and Perks ® Claims  ® Badi: Save and Retrieve Claims Data.

●      Calculating the eligibility – The standard SAP system determines the employee eligibility for a Reimbursement Type based on factors such as the Pay Scale Grouping for Allowances, Personnel number, and Tax code. You also have an option to create customized eligible amounts, or numbers, for a Reimbursement Type. For more information, refer to the IMG under Payroll India ® Reimbursements Allowances and Perks  ® Claims ® User Exit: Save and Retrieve Claims Data.