29th Oct 2015

Pension payments overseas

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Pension payments overseas
Debbie McTaggart

Amanda and her husband are considering making the move back to the UK when they retire, but are unsure which pension they will be able to receive.

Q. Amanda

My husband is 55 years old and was born in Scotland, but has lived in Australia for 15 years and has dual citizenship.

I am Australian and lived and worked only part-time in the UK for four years when we first married, but I only ever had permanent residency and not citizenship. I don’t think I would be entitled to any British pension due to not living there long enough and contributing enough tax!

There is a possibility that in a few years time we may move back to Scotland to be with our only family members, and so we were wondering what the situation would be regarding receiving the Australian and/or British pensions – in either country.

It is undecided whether we would move back as retirees or before then, where my husband would take up work over there again.

A. Your husband would most certainly be entitled to a state pension as, assuming he worked during his time in the UK, he would have paid class 1 National Insurance (NI) contributions. To find out his national insurance history, he should contact Her Majesty’s Revenue and Customs (HMRC). Once he receives his history, he will be able to find out how much pension he will receive and whether or not it is worthwhile making additional contributions to boost the amount of pension he will receive.

In regards to your own situation, legislation will change in April 2016 whereby you will have to have your own qualifying NI contributions before you can claim a state pension. It may be worthwhile checking your own contributions before the legislation changes as you may be able to pay additional contributions.

In regards to your Australian Age Pension, if you leave Australia before you are eligible to claim an Age Pension, then you will not be able to do it from the UK. You must be resident in Australia to make a claim for the Age Pension. As the Australian Age Pension is means tested, any income, including UK pension, you receive will be assessed to determine how much pension payment you receive.





COMMENTS

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PIXAPD
2nd Nov 2015
9:20am
Australia? the best country.....nuff said.
Emps
5th Nov 2015
9:12am
Heard that before, in UK, USA, Canada, France, Spain, bla bla bla.
MICK
2nd Nov 2015
9:47am
Come to Oz, work here, build up assets and then at end of life take it all back to your real homeland. This is not the sort of immigrants we need and the government should introduce legislation which prevents people doing this. Not right. And then they want to take a pension with them as well. Give me a break!
robbo
2nd Nov 2015
9:57am
Yes I fully agree with that comment. spot on.
stan
2nd Nov 2015
10:04am
Go to England, work there, build up assets and then at the end of it all take it back to your real homeland, sound familiar?
MICK
2nd Nov 2015
10:50am
No John. Your post defies what seems to be the case.
stan
2nd Nov 2015
4:15pm
Mick. Whether it's a lot or a few, some people will go back to the UK on retirement and some Aussies will return here, sauce for the goose is sauce for the gander.
Sceptic
2nd Nov 2015
4:22pm
and the post from mick - is this the same mick who recently had a series of posts about himself seeking another country to live in as being more advantageous for his lifestyle than continuing to live in Australia?
stan
2nd Nov 2015
5:42pm
Well said Sceptic, that mick does put his foot in his mouth a few times.
marls
2nd Nov 2015
9:04pm
mick if a person has paid their taxes they should be able to choose where every they want to live. it works both ways in case your not aware
Oars
5th Nov 2015
8:07am
Another point of view is that they paid taxes here and are getting out as they see the low lifes pouring into Oz. I wish I had their guts, but I have nowhere to go so I'll put up with being sneered at by some drop-kick from the North who has crawled in under cover late at night and lowering our living standards. I say good on ya for leaving, but it's a pity as you sound like a nice person.
Emps
5th Nov 2015
9:45am
Mick, check out the millions of UK pension money pouring into the Australian economy every 3 months. Expat poms like myself receive their UK pension paid every 3 months. Australian pensions sent over there is a mere pittance compared. BTW, Australia is definately not the best country in the world.
Precious 1
5th Nov 2015
10:44pm
pensions or part pensions thatcome here (I may be wrong but I was reminded of this years ago) are in Oz a month before we actually get them..think of all that revenue coming into Oz each month..many many countries in Europe too
Eileen
2nd Nov 2015
11:24am
Why would you want to go back to the UK to retire? We are ex -poms, aussie citizens, came here in 1981, would never go back, been for a few visits, our relatives especially the younger ones are doing it tough over there, better to stay here and retire, love Australia
MICK
2nd Nov 2015
11:54am
Welcome. You are right of course. GB might be nice but who would want the climate.
adbob
2nd Nov 2015
5:31pm
@Eileen

It's not possible to be an ex-Pom unless you go somewhere else.

If you stay in Australia you're either a Pom or you're not - you can't suddenly stop being one.

How can you become an ex-Pom? Do you have part of your brain removed (as in the old joke) or go through some ceremony of rebirth in a small swimming pool, as some religious factions do?
Emps
5th Nov 2015
9:49am
Mick. Typical,as an Australian you can never imagine how some people love the fresh, cold climate of say .. the Scottish isles. But,then again, that makes Australians, ermm?? different.
johnp
2nd Nov 2015
12:18pm
I married an Aussie girl in 1988 and immediately chose to live in Australia rather than ask her to live in UK. We are both professionals who could have got work easily in either country. But I'm not stupid. Why would I choose to live over there when I can live in the magnificent South West of Western Australia in one of the best climates and lifestyles in the world. Plus Bali on the doorstep - beats having the French next door anytime! I'm just coming up to retirement but you won't be finding me going back over to England to live, thanks very much!
Oars
5th Nov 2015
8:10am
You forgot to mention Margaret River plonk- one of the best drops around they tell me. Stay on- drink Margaret River plonk- be happy. Who likes France anyway- snails for breakfast !!!! yuk
Emps
5th Nov 2015
9:54am
Johnup. France is a beautiful country, every much as beautiful as anywhere in this country. I am not French, but know the country well, as i do Spain, Germany, generally the whole of the European continent. WA as other states are very nice, but oh! so! far away from the rest of the interesting world.
Precious 1
5th Nov 2015
10:51pm
Each and every country has much to offer some.more than others..some mentioned to me the other day we sjould rum away to Italy ( I said Tuscany) still here..my family here snd have no one else as was adopted in UK..i have travelled.....
if
jam
2nd Nov 2015
4:06pm
What happens if one goes for a 9 week trip away?
We were told the pension stops after 6 weeks and one needs to re-apply. Is this correct?
robbo
3rd Nov 2015
7:31am
Yes sure is you can check that on the websight.
johninmelb
3rd Nov 2015
10:07am
The pension does not stop after 6 weeks.

What does stop is the Pension Supplement and the Energy Supplement. You continue to get your basic pension payment.

Once you return to Australia, they recommence.

I really wish people would stop writing garbage on this site, and check the facts first with Centrelink. I have just come back from a trip overseas lasting almost 6 weeks. I specifically checked this with Centrelink before I left, and they gave me the exact date I had to be home by, so I didn't lose the Supplement payments.

They know when you leave and return as they automatically get the passport information from Border Protection.
Precious 1
5th Nov 2015
10:54pm
yep above is correct ..you should get citizenship you guys...then no probs...
adbob
2nd Nov 2015
5:10pm
The advice to get a statement from HMRC is correct. At 55 hubby would most likely have already qualified for most or all of an age penison. If an ordinary employee he would have had Class 1 NI paid by the employer - if self-employed Class 2 paid by himself. If he was registered as unemployed or at university for any time he would be credited with NI for that period. There are changes coming through so the exact age is critical. Unlike Australia changes in the UK tend to favour pension recipients rather than rip them off.

If it turns out that his contribution record is incomplete (30 or 35 years worth - depending on age) you then have to consider whether (if it's possible) it's worth buying extra years. If he qualifies for class 2 that's quite cheap to do - class 3 (class 1 top-ups) would need a bit more thought.

If you want to go straight away I wonder whether shifting to eg the Republic of Ireland first would work - there is a Social Security agreement with that country - theoretically it should but I wonder if anyone who's actually done it can say if it really does or not. Germany has one too. Sadly France does not. France is reserved for Australian MPs to go to on study tours at our expense. They don't want to bump into the hoi polloi from back home when living it up over there at our expense.

I left the UK in 1976 and after buying 5 years class 2 contribution I qualify for 50% UK age pension - which is more than I get from rip-off Australia after the best part of a lifetime of paying eye-watering income tax - 48.5% including medicare levy once on the top slice of a fairly modest salary.

Still - I couldn't go back to the UK now - I'd miss all those power lines dangling from rusty poles and all the lovely people endlessly here crowing about how lucky I am to live in this earthly paradise (mainly people who've never been anywhere else) and what an amazing favour they did by letting me in.
Oars
5th Nov 2015
8:12am
adbob- you haven't lost your pommy sarcasm but !
Emps
5th Nov 2015
10:08am
Adbob, i echo the last paragraph. I was always endlessly hearing the same sentiments on how grateful i should be for enjoying the aussie lifestyle after living in the old country,as though i lived like a peasant over there. I came in 72, and was asked how did i like OUR steaks, assuming it was something i could never buy in England. On settling into the first house, was told, get a tele,everyone has one in Australia. They had only B and W, i had a Hitachi Colour Tv for a year before emigrating. Had to leave it over there,because it was not even heard of here yet. Yes Oars, some of this stuff has and still does invite some sarcasm. BTW, i have trips to the states, where the sentiment is so opposite. I am told England is so beautiful, all want to visit, and why did i leave, to go to Australia. They also love our royal family.
adbob
2nd Nov 2015
5:24pm
Further to the above - you can see that they really want to make this as difficult as possible.

From a practical point of view the obvious thing to do is sell up - put your dosh somewhere safe - rent - but only buy when you're sure you've found somewhere you're happy with.

Unfortunately after 6 months they'll count the proceeds of you house sale against you - goodbye Aussie pension - even if you hold onto your Aussie house - after 6 months away AFAIK it's no longer you principal residence - so it's an investment asset - goodbye Aussie pension.

One thought which may console you - in many countries so-called high fliers - high earners at least - feel their spirit of enterprise is dampened by high rates of personal tax - and these are (so we are told at least) the folk who drive our economy. Some (our new PM for example) are driven to shift their dosh to the Cayman Islands to avoid this.

What of those who after a lifetime of aggressive tax avoidance want to reside right here in this earthly paradise with their millions intact? Well it's OK - no need to worry. Whilst those undeserving ordinary Australians (and immigrant types who thought they could just join the club simply by spending their entire working lives here) get zilch (or a pittance) Australian multimillionaires in retirement get a "world-leading" tax break - yes - irrespective of how much they've got tucked away in their SMSF and what multiple of the average person's wage the income from it is - they don't pay a penny in tax - not a penny.

I bet you fell a lot better now.
Old Silver Fox
2nd Nov 2015
9:06pm
You'd have to be from West Yorkshire adbob.
rglarking
3rd Nov 2015
10:06am
I think you need a fact check on your allegation that the PM doesn't pay tax on the income from funds that are 'managed' from the Cayman Islands!
adbob
3rd Nov 2015
1:52pm
@rglarking

The check you need is at Specsavers since I didn't write what you attempted to rebut - however if you think that Turnbull parked his dosh in the Cayman Islands because it's handy for central Sydney you might like to try a reality check too.
Caz
2nd Nov 2015
9:07pm
One crucial difference is that in the UK, you pay into the pension system throughout your working life so benefits are guaranteed for everyone who's worked.

In Australia we don't pay into a national insurance scheme. We have our own personal super accounts.

The Australian pension has only ever been intended for those who haven't built up enough of their own assets in super over their working lives. It is not an entitlement.
adbob
2nd Nov 2015
10:07pm
Completely wrong.

The schemes were quite similar until the national pension pot was poured into consolidated revenue under Menzies and the contributions were combined with income tax. Since then over time different governments have nibbled away at it.

Until 2007 the retail super funds ran products whose capital value was 50% exempt from the assets test and provided on their websites advice and examples of the best way to combine state and private pensions - that was the idea - state pension as of right - top it up with private pension/super.

It's only recently that the spin was been to con people into thinking that it's welfare and only for the "needy".

The biggest con of all is the notion that the Australian Liberal Party is some sort of moderate centre party compared with he right-wing UK Tory party. That's nonsense - the so-called Labor Party here is to the right of the UK Tories. Even though the latter are posher their policies are less extreme and they certainly wouldn't have the gall to steal the age pension form ordinary folk.

Still - lets keep giving the super tax breaks to the super rich - maybe that's why it's called super.

BTW the superannuation guarantee is just a payroll tax paid by employers - don't be fooled that there's an account in your name - you're not allowed to touch it until retirement time when its principal effect will be to disqualify you from age pension and you'll be lucky if the returns on it make the same amount as the age pension you've been disqualified from.

In the meantime that money's taken out of circulation so the economy slows down. Read Brian Toohey on this subject in the Fin - one of the few talking sense and with no vested interest to protect.
Oars
5th Nov 2015
8:21am
It looks like adbob has a free platform- this blog page. I wonder if he would be so scripty if back in "Anglind" ?????
johninmelb
3rd Nov 2015
9:56am
If Amanda worked in the UK then it is very likely she can get some UK Pension. Residency status is not relevant.

In my case, I lived and worked in the UK for a year back in the 60's (the obligatory working holiday!) When I turned 65 this year, I emailed the UK Dept of Pensions with my National Insurance number, not expecting to be entitled to anything. They sent me the forms to fill in and I now get the princely sum of 7 pounds a week paid monthly into my bank account. About $60 a month on current exchange rates. A bit extra with my Oz pension!
whatsupdok
4th Nov 2015
7:20pm
I know I'll get some criticism on this but in a way I feel screwed. I was born in America, served in the Air Force 4 years during Vietnam. I worked in the USA til I was 40 when my family immigrated to Australia. I retired last year at 65. I am e3ntitled to Social Security from the USA and I also have a 401K in the USA. All the rules state that my Australian pension reduces as I take either of the benefits from the USA. That part in general is fine. But, because the 401K was a pre tax investment it is declared as income earned today instead of when it was actually earned. I earned this money 40 years plus ago and it means that no matter what I take I end up losing the full pension if I want to have a life style better than the $20,000 I get from my Australian pension. It means all my money just keeps me down at the poverty level. Thats life I guess.
Oars
5th Nov 2015
8:15am
Go to New Zealand where they are all getting a pension. Names drop your an American and you will be placed at the top of the list. Also mention your time in Vietnam ( which side were you on ???) and that could qualify you for a fruit store in Mangere- near the airport. Go there Yank .
whatsupdok
5th Nov 2015
6:00pm
Oars, not sure if you were trying to be funny, make a jap at me or being helpful? In Australia we call that pissing In my pocket! But, thanks for the advice!
Bones
6th Nov 2015
11:58am
Gotta love reading these posts lol. Aussies n poms having a go at each other worried about pensions and how we all got here etc etc.
Meanwhile 5000 refugees are on there way here and the statistics of their education standards and work ethics are, so I read, questionable! I think we might be very lucky to get a pension in a couple of years.
If you are any race of person, if you contribute in any country and the rules day you can have a pension then OK. Who cares where you get it. Chase the pollies about theirs and stop the rot with them.
Just saying
Pepe La Pew(aka Rad)
6th Nov 2015
8:41pm
more than 5,000 coming our way Bones.
It is going to be 12,000 in total.
Plenty of taxpayers money to be spent then.
The "conservative" estimate of the cost of this will be $700 million over the forward estimates.


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