What happens to your Age Pension payments if you go overseas

Retirement can provide the perfect opportunity to fulfil some of the dreams you may have put off in your younger years, but fulfilling those travel dreams of moving overseas or taking an extended trip can have implications on your Age Pension payments.

According to the Department of Human Services, you only have to be out of the country for a matter of weeks before your pension payments begin to be affected.

If you are out of the country for less than six weeks then there is no need to worry as your Age Pension won’t change and you don’t need to declare your trip to the government.

If you know that you are going to be out of the country for more than six weeks though – for example if you’re travelling temporarily – then current guidelines state that you will receive an ‘outside Australia’ rate and your Pension Supplement will be reduced to the basic amount. Your energy supplement will also stop.

However, subject to the passage of legislation, changes are soon expected to come into effect which will see the Pension Supplement Basic Amount cease entirely after six weeks overseas.

For those who decide to part with Australia for good and emigrate overseas, the criteria are different.

Firstly, you must let the Australian government know if you intend to move abroad permanently. You can do that by logging into your Centrelink account through the MyGov website or by calling the older Australians helpline or visiting your local service centre.

Once you leave your Pension Supplement Basic Amount, which includes Pharmaceutical Allowance, Utilities Allowance, GST Supplement and Telephone Allowance, will stop immediately, along with your energy supplement.

Your actual Age Pension rate, once you’ve been out of the country for 26 weeks, will depend on how long you were an Australian resident between the age of 16 and Age Pension age.

If you were an Australian resident for 35 years or more, which is classed as full working life residency, your rate normally won’t change. However, if you have been an Aussie resident for less than 35 years, you will receive a lower rate. For example, if you were a resident for 10 years you’ll get 10/35ths of your usual pension rate.

Your rate will also remain unchanged in the circumstance that you were an Australian resident for 25 years or more, and were also receiving the Age Pension or another Australian social security payment while living outside Australia on 1 July, 2014.

The rate of payment is then calculated under both the income and assets tests, with the rate decreasing for both singles and couples by $3 a fortnight for every $1,000 of additional assets above the allowable assets limit.

Things are different again if you return to Australia after a period of living overseas and plan to leave again.

The rules stipulate that if you come back to live in Australia from another country and start getting the Age Pension, your payment will stop if you go overseas during the next two years.

This is also the case if you got payments under a social security agreement with another country while you lived outside Australia.

If you leave Australia temporarily but stay an Australian resident, this normally counts as part of the two years. However, if you go to a country we have a social security agreement with, you may still get Age Pension during the two years.

The last thing to consider is that you will receive your payments on a different schedule if you are outside Australia on a long-term absence or live in another country. Rather than receiving the payments every two weeks you will instead receive 13 regular four-weekly payments each year.

Have you moved, or considered moving, overseas in retirement?

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.