Living overseas and the pension

It is possible to continue to receive the Age Pension for the whole time you’re overseas, whether you have left Australia on a temporary or permanent basis. If you remain outside Australia for longer than 26 weeks, your pension will be reduced to a proportional rate based on your ‘Australian working life residence’. This is the number of years you have resided in Australia since age 16 to Age Pension age.

To be eligible for the Age Pension you must meet certain criteria which is assessed by the Department of Human Services. This includes meeting age requirements, residency requirements and passing the income and assets test.

Qualification age

Date of Birth

Qualifying age at

1 July 1952 to 31 December 1953

65 years and 6 months

1 January 1954 to 30 June 1955

66 years

1 July 1955 to 31 December 1956

66 years and 6 months

From 1 January 1957

67 years


Residency requirements

When claiming the Age Pension, you must be resident in the country and must have lived in Australia as a citizen or permanent resident for a continuous period of 10 years, or for several periods which total over 10 years and include a continuous period of five years in total. There are certain exemptions and you can find out more at HumanServices.gov.au.

Claiming the Age Pension overseas
If you have lived in Australia for 35 years (420 months), then you are paid the full rate of Age Pension to which you are entitled. If, for example, you have only resided in Australia for 20 years, then you will be paid 241/420 of the Age Pension (20 x12 plus an extra month). If you leave Australia permanently, the rate of Pension Supplement you receive will reduce on departure or, if leaving on a temporary basis, it will be reduced six weeks after departure. the Energy Supplement will cease when you leave Australia to live in another country.

For those who were granted an Age Pension and left Australia prior to 1 July 2014, the 25-year Australian working life residence will be applied. Should you return to Australia and then depart (after 1 July 2014), the new 35-year rule will be applied.

As long as you remain eligible, your Age Pension will continue to be paid fortnightly. If you are moving long term (over 12 months) or permanently, your Age Pension will be paid every four weeks.

However, if you returned to reside in Australia within the last two years and were transferred to or granted an Age Pension within that time, your pension will be stopped when you go overseas.

International Social Security Agreements
Certain countries have International Social Security Agreements in place to assist people who migrate between countries to more easily claim social security benefits listed in the agreement. 

Under these agreements responsibility for social security may be shared between the countries where you have lived and in some instances, you may be able to receive pensions from both countries, with each agreement country paying a part pension to you. This can also help should you decide to reside in such a country once you have been granted an Age Pension. The list of countries Australia currently has agreements with are:

Austria
Belgium
Canada
Chile
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
India
Ireland
Italy
Japan
Korea
Latvia
The former Yugoslav Republic of Macedonia
Malta
The Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Slovenia
Spain
Switzerland
United States of America

What if you already live overseas?
You must be an Australian resident to make a claim for the Age Pension. If you are currently living overseas you have to return to Australia to claim the Age Pension. You should be aware that the process can take several months and you may not be granted an Age Pension depending on your income and assets.

Any income you earn will be subject to the income test to assess whether or not you will be granted an Age Pension. Currently you can earn $172 per fortnight for singles before your Age Pension is affected. If you chose to work past Age Pension age, the Work Bonus will be applied and $250 of income from wages will be excluded from assessment.

Your claim for an Age Pension will also be subject to an asset test and should you exceed the asset disqualification limit, you will not receive an Age Pension. There are certain exemptions from the asset test, such as your main residence if owned. The current asset disqualification limits for a single, full Age Pension applicant are $258,500 for a homeowner and $465,500 for a non-homeowner.

Should you be granted an Age Pension, you have to remain in Australia for two years, otherwise your Age Pension will be cancelled.

When you move overseas after the two years, your Age Pension will be paid at the ‘outside of Australia’ rate and will be subject to the work-life residency rule. This means that if you have lived in Australia for less than 35 years between the ages of 16 and 65, you will be paid a pro rata rate.

Case study 1
Trevor returned to Australia after residing in China. As there is no social security agreement between Australia and China, Trevor must return to Australia to make a claim for the Age Pension.

After submitting his claim in Australia, Trever returns to China to get his things in order in preparation for receiving the Age Pension overseas. As a result, Centrelink deemed him to be a non-resident as he had left Australia and his claim for the Age Pension was rejected.

Trevor returned to Australia and re-submitted his claim and was then granted an Age Pension.

Portability of the age pension requires an initial residence within Australia of at least two years while in receipt of the age pension. Therefore, if Trevor leaves Australia within two years of being granted the age pension, he will lose the eligibility for the payment and will then need to re-apply upon returning to Australia.

Two years later
After residing in Australia for two years, Trevor’s Age Pension payment is now deemed ‘portable’. Trevor’s Australian Working Life Residence (AWLR) is 27 years. A person is able to continue receiving the full amount overseas that they are eligible for within Australia if they have an AWLR of 35 years of more.

Trevor was receiving the maximum base rate of the Age Pension ($826.20 per fortnight for a single at September 2018) plus the pension supplement in Australia. When Trevor leaves to go and live back in China, his pension supplement will decrease to the basic amount.

After 26 weeks out of Australia, Trevor’s Age Pension amount is paid to him at a proportional rate based on an AWLR of 27 years. His 27 years equates to 324 months plus one month, meaning he will be paid 325/420ths of the full rate of the Age Pension ($639.32 at September 2018).

Case study 2
Olivia has been living in Australia for 45 years. Olivia is 69 and started receiving the Age Pension in Australia when she was 65.

Olivia has decided to travel overseas to Portugal to live with family for a few years. Because Olivia has an AWLR of more than 35 years, after 26 weeks overseas she will continue to receive the full amount of Age Pension that she is eligible for while she is living in Portugal.

If Olivia had an AWLR of less than 35 years she would be paid a proportion of her age pension after 26 weeks overseas.

How does Centrelink make payments to pensioners living overseas?
Payments outside Australia are normally made by direct deposit straight into your bank account. This can be a bank account held in or outside Australia. In exceptional circumstances you may be able to be paid by cheque.

If you don’t get your payment within 10 days of Centrelink issuing it, contact your local bank before notifying Centrelink. If you are being paid into an Australian bank account, Centrelink will pay you in Australian dollars.

Currency
If you are being paid in a bank account outside of Australia, Centrelink will make your payment in local currency or US dollars, depending upon the country in which you currently live. You just need to fill in the correct international bank account form for your country.

If you arrange to be paid by cheque, the cheques will be in local currency for most countries, or in US dollars. You should get it in the post 14 to 20 days after Centrelink issues it. Centrelink uses international and local mail systems to send your cheque and there can sometimes be delays.

If you don’t get your cheque within 20 days of Centrelink issuing it, Centrelink can cancel the cheque and send a new one. If a cheque arrives after it has been cancelled by Centrelink, don’t cash it or put it into your account as your bank may charge you a fee.

When you deposit your cheque into your bank account it will need to clear before you can access the funds. This could take around two weeks if the cheque is in local currency, or four weeks for cheques in US dollars.

If you are outside Australia on a long-term absence or live in another country, you will receive 13 regular four-weekly payments of your pension each year.

Written by Ben



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