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What are the rules for age pension if you Aus citizen but retires overseas


ottg

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I spoke to someone the other day at work and he mentioned that they intend to retire in Indonesia but will still be eligible for Age Pension. So I asked what about his private property of residence in Australia. He said he will keep it. Surely that will be taken into account during the means test, as he will receive an income from it.

 

a. He was too sure about that so let me ask the question here? Are the rules the same if you want to retire in any other country?

b. For gov age pension your primary property of residence does not get taken into account if the means test gets's done. So let's say you have a property paid off in Aus, but you also have a residence somewhere overseas, how does that get to influence the means test for the age pension.

c. What if you buy another property now overseas for residency?

d. After retirement, what minimum period of time do you need to be resident in Aus per year? I assume it is the same if a person retires in Bali, Italy, RSA?

d. What are the options available if a person wants to make use of the Aus gov age pension in another country?

 

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Here are the two links you'll need

https://www.humanservices.gov.au/individuals/enablers/age-pension-if-you-travel-outside-australia/31171

 

and 

 

https://www.humanservices.gov.au/individuals/services/centrelink/parenting-payment/managing-your-payment/if-you-travel-outside-australia/pension-rates-payable-outside-australia

 

There are rules for allowable other income and assets while outside Australia. Looks like you can't get the exemption for owner-occupier home because you are not resident.

When you leave Australia for more than 26 weeks

Your rate 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 your rate normally won’t change
  • less than 35 years you’ll normally get a lower rate, for example, if you were a resident for 10 years you’ll get 10/35ths of your usual rate

 

There is a lot to consider and my advice would be to make an appointment to see a Centrelink financial counsellor. It's their job to help people find the best option (believe it or not! 😏)

 

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In 2013 you could live in Australia, reach 65 and put in for an old age pension. Once you'd applied in Australia for the pension, you were free to retire overseas and your pension didn't get reduced no matter how long you'd lived in Australia over 10 years.

You need at least 10 years of residence in Australia to qualify for the Australian old age pension.

Since then the law has changed and if you have an old age pension from Australia and retire overseas, Centrelink look at how many years' residence in Australia you've had. After 35 years, your pension isn't reduced, but if you've lived a shorter period, then your Centrelink payment is reduced pro rata.

If you came from South Africa 20 years ago and have applied for the old age pension in Australia, if that person retired back to South Africa they'd only get 20 / 35ths of an old age pension from Australia.

Also, old age pensioners get a top up to their basic old age pension called the "Pension Supplement". This is worth another $50.70 a fortnight on top of the basic pension.

It is made up of two parts . . . . one part is paid fortnightly along with your basic old age pension. This is worth $23.50 a fortnight.

The other part . . . . . to help supplement the payment for electricity bills and internet connection, etc. . . . . is only paid quarterly (four times a year) and is worth $27.20 a fortnight. This builds up over the three months and is paid in one big amount ($170 / $180) with your old age pension.

Now, when you go overseas for more than six weeks, or is you permanently retire overseas, this second part of the pension supplement stops. You are no longer paying electricity bills and internet in Australia so that part of the pension supplement ceases and you only get your basic pension supplement of $23.50 a fortnight together with your old age pension.

Edited by Bob
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