Two-year residency rule

The two-year residency rule is causing Dale some confusion, so we have clarified the issues that surround the requirements, including what happens to your Age Pension.

Q. I’m a bit confused after looking at the Department of Human Services’ website.

Is there a waiting period of two years before you can travel extensively or live overseas and still receive the Age Pension or part Age Pension? For example, if you turn 65 and get an Age Pension do you have to wait until you’re 67 to leave the country? It appears they stop payments if you leave.

I understand that if you’re away longer than 26 weeks you lose benefits, but the two-year rule seems to confuse things.

Any clarity on this would be appreciated.

A. The two-year residency rule applies to those who have been residing outside of Australia and return to claim an Age Pension. If your principal residence has been in Australia prior to claiming the Age Pension, then you do not have to serve the two-year residency period should you wish to leave the country.

If you remain a resident of Australia, a temporary absence from Australia during this period would normally still be counted towards your two-year residence period.

If you plan to leave Australia permanently, your Pension Supplement payment rate will change and your Energy Supplement will cease. If it’s an extended temporary absence, this will happen after six weeks.

After six weeks absence, your pension will be paid at the Outside Australia rate and after 26 weeks absence, your pension depends on how long you have worked and lived in Australia. You can find out more about how your Australian working life residence is used to calculate your Age Pension payment here.

Written by Debbie McTaggart