Can you claim a UK pension and the Australian pension?

June wants to know how her UK Pension will affect her application for the Age Pension.

Can you claim a UK pension and the Australian pension?

June is preparing for retirement and wants to know how her UK pension will affect her application for the Age Pension in Australia.

•••

Q. June
My husband and I are looking to retire when we are 66. We are 64 now. We are from England but have been working here for more than 14 years. We have a full English pension of £160 a week. We will have a small amount of super maybe $40,000 about $20,000 in shares and $50,000 in the bank. Do you think we will get a part Australian pension?

A. Centrelink will assess your UK pension as income and if this takes you over the income limit, your pension will be reduced by 50 cents for every dollar you exceed the limit. For example, the current limit for couples combined is $308 per fortnight. 

The income from your combined UK pension will be roughly $1200 per fortnight, but the first $308 will not be assessed.

The remaining $892 will reduce your pension by $446 per fortnight. Therefore, based on a couples combined full Age Pension of $1396.20, you would receive $950.20 per fortnight. These figures are for guidance only, based on the current limits (which you can view here) and do not include the other investments you mentioned which will be deemed to be earning income.

When you advise Centrelink of your income and assets from overseas, it will convert the value into Australian dollars. 

Once you have been granted a UK pension, the amount will stay the same – it is not indexed. This means that the only fluctuation in the value of your payment will be due to the exchange rate. 

Centrelink currently uses the Commonwealth Bank buy rates that apply on the fifth business day before the first of each month.

Centrelink will update your income details on the first of each month and apply this rate of income to your Age Pension payment.

This is only a guide to what you may be entitled to. You can make an appointment to speak to a Centrelink Financial Information Services Officer on 132300. This is a free service, which you can access at any time, whether a customer of Centrelink or not, and will help you to better understand your entitlements based on your individual financial position.

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    TREBOR
    13th Sep 2019
    10:44am
    Shouldn't be a problem - all that is required is for UK pension to be treated as income and calculated appropriately. If it falls below the earnings limit, no reduction in OzPen... if it does - same rules apply.

    Why make it complicated? You'll confuse Centrelink staff even more... I mean .. many of them are 'flexible' workers = part-timers etc... you can't expect them to be capable of dealing with the realities of the job....
    loadmaster
    13th Sep 2019
    11:34am
    I have a part UK pension and an age pension here. As a hint for anyone with an overseas pension, I ask Centrelink to tax some tax out of my age pension to basically cover the tax I will owe for getting a UK pension. Saves the risk of a tax debt from the overseas income.
    inextratime
    17th Sep 2019
    4:40pm
    Not sure what you are talking about here loadmaster. I get a part pension from the UK and there has never been a mention of any tax owing to anybody. I submitted the amount I get to centrelink and they include it my assessment.
    loadmaster
    22nd Sep 2019
    3:00pm
    What I'm talking about inextratime is in reply to the question. I get mostly a full UK pension plus an Australian pension. As a reminder/hint, I mentioned that the UK pension is taxable here so I took an action to avoid the possiblity of having a tax debt.

    Centrelink have always known the amount of my UK pension, but the tax office needed the total figure in my tax return. Each month it's a slightly different amount, depending on the exchange rate. Centrelink and the ATO treat it differently.

    Hope that makes it more clear.
    Pooh!
    13th Sep 2019
    11:41am
    If a person/couple has a small mortgage and only a pension as income - with the interest rates so low it might be possible to continue the payments. If the interest rate rises (as it will eventually) it might make morgage repayments very difficult. Question: does anyone know if it is possible to change your mortgage to interest only? I know, or I think I know that as a pensioner we are not elligible to take or re mortgage... but can it be changed?
    GrayComputing
    13th Sep 2019
    3:46pm
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even the UK and poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.
    inextratime
    17th Sep 2019
    4:44pm
    Well said GC but don't let common sense get in the way of political skullduggery and virtual signalling to the electorate, oh and in the increase of the unemployable unemployed.
    kram
    22nd Sep 2019
    2:33pm
    Yes, remove the assets test.
    Australia used to lead the world in looking after its elderly but as you mention, not any more.
    Over the last 50 odd years, it has been dramiticaly reduced. We even lagg behind (shock) America now.

    But let's not twist things just to suit the story.
    A pension is still welfare.
    Elizzy
    13th Sep 2019
    4:40pm
    The information in the article is correct for countries with which Australia has a social security agreement. Where no agreement exists with a given country I don't know how the calculation is done. Loadmaster has taken a sensible approach to the matter of tax.
    Justsane
    14th Sep 2019
    11:38pm
    Elizzy,
    Australia does not have a social security agreement with the UK. https://www.humanservices.gov.au/individuals/services/centrelink/international-social-security-agreements/which-countries-have-agreements-us

    It ended because of the UK's refusal to index their pensions.
    bobm
    13th Sep 2019
    6:26pm
    Every one gets a pension although it may be a little less that at the moment. No asset testing. No restrictions for part time work.UK and NZ are examples of such.
    The BEST part most of centre link, lawyers and financial advisers are gone. Not needed as there are not anything to off load and work the system. Very simple to run. Save on the overheads which can now be paid to those who need the extra to live
    marls
    13th Sep 2019
    7:22pm
    Bobm
    No asset test in Italy or Germany either I know in Italy if one partner dies the surviving partner receives a portion of the deceased only Australian is mean enough to assert test the aged pension
    Farside
    14th Sep 2019
    12:03pm
    and yet the Global Retirement Index ranks the Australian system sixth in the world for 2018, which is above UK, Germany and Italy. The top five countries are Switzerland, Iceland, Norway, Sweden and NewZealand. Must be easy to cherry pick factors to complain about.
    DELboy
    13th Sep 2019
    9:41pm
    I lived in NZ for ten years prior to Australia, therefore I was entitled to a part NZ pension. If you think centre link move slowly when it has to pay you, see how quick they are when they realise you can reduce their amount you are allowed by the NZ amopunt!!


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