Take your Age Pension overseas when you retire – avoid the pension pitfalls and transfer your money hassle-free
Whether you’ve made the decision to retire overseas or just looking ahead to the future, it’s important to know your options about your Age Pension. If you are buying a property in which to retire abroad, you might want to take a look at our previous posts: the first about your options when buying foreign property , and the second about budgeting for an overseas purchase . Whether you are buying a house or not, you will want to make your money last and retire without hassle, the key to which is getting informed about your Age Pension.
Age Pension Eligibility Requirements
Eligibility for the Australian Age Pension can be hard to get your head around. For detailed information on conditions and eligibility requirements please refer to National Seniors’ Age Pension Portability factsheet. According to the Department of Human Services website, there is one rule that applies to everyone: between applying to take your Age Pension abroad and receiving it, there is a two-year waiting period.
In addition, the Department of Human Services website sets out that you must apply within Australia unless the government has an International Social Security Agreement with the country in which you wish to retire. The good news is there are 30 different countries on this agreements list, including:
- New Zealand
To see the full list of countries that have International Social Security Agreements with Australia click the link at the bottom of this post.
According to the Department of Human Services website, if your retiree’s paradise is on the list then you can apply to receive your pension without returning to Australia. But, you must still wait two years for your pension to port, so it’s wise to ensure you’re financially prepared for this period of exposure. If you have family in Australia (or anywhere else around the world) you could have them send you money to cover your expenses until you start receiving your pension.
Age Pension Overseas Conditions
The first condition of Age Pension portability relates to your length of time overseas. If you’re already receiving your pension, you can stay overseas for up to 26 weeks without your pension being affected.
After 26 weeks, your receipt of the Age Pension becomes dependent on how many years you’ve been an Australian resident. This is called your Australian Working Life Residency (AWLR). Your AWLR starts after 10 years of residential status in Australia and is only calculated between 16-65 years of age (although there are plans to increase this to 67 in 2023). Fortunately, it is not dependent on you receiving paid employment.
For detailed information on conditions please refer to the Age Pension when travelling outside of Australia section of the Department of Human Services website.
Changes To Age Pension When Overseas
You will continue to receive your full Age Pension after 26 weeks abroad if your AWLR totals 35 years. This was increased from 25 years in 2014 and still applies to those already living overseas before 1 July 2014. If your AWLR is less than 35 years but you moved abroad after 1 July 2014 then the amount you receive after 26 weeks abroad will fall accordingly.
For detailed information on entitlements please refer to the Eligibility basics section of the Department of Human Services website.
Things To Note For The Overseas Retiree
- Before you sell up and set sail for the next chapter of your life, here’s a list of things to consider:
- Pension Supplement – After 6 weeks this will be reduced to the basic amount regardless of where you retire. Be prepared for this with savings or help from family.
- Pensioner Concession Card – Upon leaving Australia your Concession Card is cancelled, however on a temporary trip, it remains active for 6 weeks.
- Commonwealth Senior Health Card – 19 weeks is the length of time your health card remains active while outside of the country, but it’s easy to reinstate if you contact Centrelink before leaving.
- Disability Support Pension – 6 weeks after leaving Australia your DSP will be stopped unless you meet certain conditions. Look into this with the Department of Human Services.
- Health Supplies – Ensure you are well stocked up on health supplies before leaving for your home in the hills. If not, a return trip may be necessary, which can bring added stress.
- Family Support – If you plan to complete your pension portability application at home in Australia, or retire within one of the Social Security Agreement countries, you’ll be subject to a 24-month wait. Be sure to make sufficient financial arrangements to tide you over until activated.
a. With OFX, you can set up regular payments and we’ll take care of the rest. Like international automatic payments, regular payments give you one less thing to worry about during your retirement.
b. We also offer forward contracts, which allow you or a loved one to take advantage of a favourable market exchange rate and continue paying at that rate throughout the year.
c. When sending AUD, most transfers can be completed the next working day, giving you security and peace of mind, even in an emergency.
Find out more information about Australia’s International Social Security Agreements.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.