Retiring overseas: Can I take my age pension with me?
WITH some older Australians choosing to make their retirement home overseas, the question is often raised by them whether the Age Pension can still be paid if they aren't living in Australia.
International Living Australia's editor Janet Nisted says you can take your age pension overseas indefinitely. "It will not be cut off unless there is a change in your circumstances, such as a change in your income and/or assets, that disqualifies you for the pension. Same as if you were in Australia," she adds.
However, Ms Nistend says there are some things you need to be aware of.
"After six weeks overseas, your Age Pension will switch to the 'outside Australia rate'," Janet notes. "All this means is that your Pension Supplement stops. The Pension Supplement is a combined payment of Pharmaceutical Allowance, Utilities Allowance, GST Supplement and Telephone Allowance. If you receive the Energy Supplement, that will stop also.
"The Pension Supplement is around $80 per fortnight for a couple and is designed to help age pensioners living in Australia cope with the high cost of these services. You don't continue to get the supplement if you're not living in Australia. Although, keep in mind, that in many low-cost retirement destinations overseas you can pay your utilities, phone and pharmaceuticals with your spare change.
"The Australian Working Life Residency (AWLR) rule is another one to note. If you've lived most of your life in Australia, the AWLR will probably not affect you. If, however, you migrated to Australia during your adult life or spent a substantial proportion of your adult life overseas, a move overseas may mean that your Age Pension amount is reduced after you've been gone for 26 weeks."
How it works
"The AWLR measures the number of years you've lived in Australia between the ages of 16 and 65," Janet says. "Note that you do not have to have worked any or all of this time; simply living in Australia is enough.
"If you have 35 years or more living in Australia between the ages of 16 and 65, you are entitled to the full amount of Age Pension as determined by the income and asset tests.
"And if you haven't, then after 26 weeks overseas, your pension amount will be proportional to the number of years of your working life you lived in Australia. For example, if you have, say 20 years of Working Life Residency, then you'll be entitled to 20/35ths of your current Age Pension after 26 weeks."
This all means age pensioners can go overseas for 26 weeks and still receive their regular Age Pension, less the supplement. The majority of these pensioners can stay overseas indefinitely and continue receiving their current Age Pension into either an Australian bank account or foreign bank account.
But before you pack your bag, Ms Nistend says you should get financial advice from an independent qualified financial advisor and take advantage of the free information services offered by Centrelink.
For more information, go to What You Need to Know About Taking Your Age Pension Overseas