Over 80,000 pensions to be cut

Each year Australian taxpayers pay nearly $800 million to support over 81,000 pensioners living overseas, but changes to criteria could see their Age Pensions reduced or cut altogether.

Over the last two decades, the number of Australians living overseas who receive Age Pensions has tripled. Currently, more than 81,000 full- or part-age pensioners live offshore, with a further 6500 disability support pensioners (DSP) in the same situation.

In 1993 around 23,000 age pensioners and 8455 disability support pensioners lived overseas. In 2013, that number rose to a total of 87,791 being supported.

Most of these pensioners live in New Zealand, Italy, Greece, Portugal, Ireland, Britain and Spain.

According to The Australian, Social Services Minister Christian Porter wants to enforce the “residency-based nature of Australia’s welfare system” but, so far, his wish has been blocked in the Senate by Labor.

“The annual combined cost of these is $765.4m,” said Mr Porter. “$660.8m from the Age Pension and $104.6m from the DSP.”

In response to this, the Government has proposed to reduce the period that the means-tested Age Pension, as well as some other payments, can be paid to people living outside of Australia. It plans to reduce this period from 26 weeks to six weeks.

Currently, Australians who receive a full Age Pension must have worked in the country for at least 35 years.

However, the proposed changes to residency criteria, will see pensioners have their rates adjusted according to how long they’ve worked in Australia. So if someone has worked in country for 13 years but move overseas one they retire, they will receive 13/35ths of the Age Pension they’d receive if they stayed here.

“This measure will provide savings of $168.4m over the forward estimates, which Labor has opposed. This change reinforces the strong residency based nature of Australia’s welfare system,” said Mr Porter.

A Labor spokesperson has said that the proposed changes would affect 190,000 “migrant pensioners”, such as those who want to travel overseas for more than six months at a time, as well as close to 90,000 who live permanently overseas.

Are the proposed changes fair? Will they affect you? Do you think they should apply to travellers overseas or just to permanent residents?

Related articles:
Pension portability under threat
Pension portability changes approved
How pension portability changes will affect real Australians

Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.
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