Working life residence explained

Marcy is confused about how living overseas affects her Age Pension, particularly the working life residence rules. So today, we explain how it works.

Q. Marcy
I have heard different versions on this topic so I am hoping you can clarify this for me. I am currently on an Age Pension, and I am spending a lot of time in Indonesia. Am I only allowed to stay out of Australia for six months at one time?

Will it affect my pension if I stay out of Australia for longer than six months at a time? If so, how will this affect my pension?

Thank you for any information you can give me.

A. You can remain outside of Australia for longer than six months; however, your payment rate may change.

Your payment will be subject to the working life residence rules. This will depend on:

  • how long you’re away
  • whether your income and assets change
  • whether your pension is through a social security agreement with another country.

Once you’ve been overseas for six weeks, your payment rate will change depending on the number of years you lived and worked in Australia beforehand.

Under this rule, your Age Pension is paid at a pro rata rate that depends on how many years you have lived in Australia as a resident between the age of 16 and pension age. If this is 35 years or more, then you will be paid the full rate of Age Pension, subject to the outside of Australia payment rules. If you have been resident for less than 35 years, for example, 30 years, then you will be paid 30/35ths of the rate applicable to your circumstances.

If you left Australia before 1 January 2017, you can remain absent for 26 weeks before your pension rate is adjusted. If you left Australia after 1 January 2017, this period will decrease to six weeks. The changes to your payments will take effect on the day you left the country. You should advise Centrelink of any plans you have to leave Australia for more than six weeks, or if you wish to leave permanently.

Also, from 1 January 2018, the Pension Supplement will stop if you have been outside of Australia for more than six weeks.

Find out more about the working life residence rules at www.humanservices.gov.au as well as details about the Age Pension rates payable to people outside Australia.

 

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 Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances. 

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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