Tax, super and pension: What you need to know about retiring overseas

Jul 04, 2020
Make sure you're getting paid what you're entitled to when retiring overseas. Source: Getty.

Packing everything up and living out your golden years abroad is the ultimate retirement goal for many Australians. But retiring overseas isn’t just sipping mimosas on the beach and lazing in the sun, in fact it requires a whole lot of preparation.

While organising finances and possible income streams, it can be confusing to know exactly what you’re entitled to. Luckily, moving overseas has been made easier thanks to the 31 international social security agreements Australia currently has with different countries which generally simplify government pensions and tax.

So, if you’re planning on jetting off for good and interested in finding out what you’re actually entitled to while living abroad, then have a read of the three big topics below.


The Australian Tax Office (ATO) says those who leave the country are still subject to the same rules regarding their super, even if you’re leaving for good. This means you can’t access super until you reach preservation age and retire or satisfy another condition of release.

If you’re an Australian citizen though, what happens to your super will be exactly the same as if you were living locally. This means if you’re of preservation age, you can access your super via income stream or lump sum which is transferred into your nominated Australian bank account no matter where you’re living.

To make sure you’re consistently on top of your funds, it’s always smart to go paperless and make the move online for faster delivery and regular updates. You can read more about the ATO guidelines here.

Age Pension

You can also get access to the Age Pension while living overseas but the rate depends on how long you’ve been away. Currently, when you leave to live in another country you’ll receive an outside Australia rate which means your Pension Supplement will drop to the basic rate and your Energy Supplement will stop all together.

Your rate will also depend on variables such as how long you’re away for, if your income and assets change and if your pension is through a social security agreement with another country. If you’re outside of Australia for longer than 26 weeks or six months, the pension will be reduced to a proportional rate based on your Australian working-life residence which is the number of years you resided in Australia from 16 to Age Pension age.

If you’ve lived in Australia for 35 years (420 months) then you’ll normally be paid the full rate to which you’re entitled to. If you’ve been an Australia for less than 35 years you’ll normally get a reduced rate. For instance, if you’ve been in Australia for 10 years, you’ll get 10/35ths of the usual rate. You can check the full details on the Services Australia website here.

Meanwhile, if you’re moving to one of the 31 countries Australia holds a social security agreement with, then that agreement sets out the amount you get while you’re outside of Australia.


Leaving Australia to live overseas could cause some tax implications. Even though your super income or lump sum payments might be tax-exempt in Australia, it might not be the case in other countries that levy a wealth tax on super balance or tax super earnings.

This can vary depending on the country you head off to so it’s always worth seeking professional financial advice to help navigate the capital gains tax and tax treatment of any income and assets in the country you’re retiring to. Some countries could have a double tax treaty with Australia which means tax will only be levied by one government but again, it always pays to check.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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